Not Married? You are not alone-but you still need a plan.
Estate Planning for People Living Together, Bachelors, and Bachelorettes
I feel strange as I write this article. In two days (as long as I do not screw it up between now and then) I will celebrate 32nd years of marriage to my bride. But here I am discussing estate planning challenges of friends, clients, and hopefully, soon to be clients, who are not yet married, or are no longer married. Maybe it stems from a conversation over a game of dominoes this weekend with couple group of single people asking why it seemed like all I addressed were married couples. While they were not completely accurate, there was some reality to their perception. Traditional estate planning does tend to focus on the "traditional" married couple home. MEA CULPA, because I began doing estate planning to serve those of us who were traditionally under-served and under-represented with these very important estate planning services.
In fact, approximately half of America’s population over the age of 16 is unmarried.
This is because the default laws governing estates often work poorly for people without a spouse and may not adequately provide for a significant other or unmarried partner. Having a cohesive and well-drafted estate plan will ensure that you protect and provide for those you truly care about upon your death.
Evolving Estate Planning
It is important to understand your estate plan can change over time. You may eventually experience life changes like getting married, having children, or buying your first home that will necessitate changes to your estate plan. Although life is constantly changing, it is best to get in the driver’s seat early when it comes to estate planning.
If you die without a will--referred to as intestate--all of your possessions will be distributed according to the default laws of DC, Maryland, or whatever state you are a resident. While most state laws have a married person’s assets go to their surviving spouse and children, the same is not true for unmarried individuals. Generally, state law provides that a single person’s assets are passed on to their next of kin. This includes children, parents, and siblings. Noticeably absent for many unmarried people are provisions providing for a long-term boyfriend or girlfriend. And, if there are no surviving close relatives, the assets will likely go to the state. And without a will, under no circumstance will any of your estate be donate to a charity or similar organization. To avoid the state dictating what happens to your assets, it is vital that you have a properly drafted estate plan put together.
As an Unmarried Person, How You Own Things Is Very Important
There is an increasing number of couples that are not getting married, and other individuals who are deciding to remain single. For this group, estate planning is important because taxes and other financial benefits tend to favor those who have tied the knot. It also brings up the need to be very careful about how assets are titled.
How your assets are titled and how the beneficiary designations are prepared will impact how your assets will be distributed upon your passing. The most common ways to hold title to property is tenants in common ("TIC") and joint tenants with rights of survivorship (JTWROS). Before continuing, I cannot stress enough the importance of those last four words, "with right of survivorship." Property that is held as TIC means that each owner owns an interest in the property. At the death of one owner, that interest is transferred according to his or her estate plan, or intestate succession if there is no estate planning. This may or may not be an ideal way for unmarried couples to own property because at the death of one of them, the other person will end up as joint owner with the deceased’s next of kin. JTWROS is one option for unmarried couples because when one owner dies, the property automatically transfers to the surviving owner. There are several other planning strategies that can be beneficial for unmarried individuals--involving tax benefits, retirement plans, wills and trusts, and healthcare powers of attorney--if the right estate plan is carefully crafted.
Speak to an Estate Planning Attorney
If you do not have an estate plan yet, you should contact us today. Whether you are married, single, or cohabiting with a partner, we can help you craft a comprehensive financial plan that is tailored to your personal situation and assists you in protecting those you care for the most. Give us a call at 301.892.2713 today so we can help.
Live with Your Bags Packed!
P.S. - Early Happy Anniversary Sherryl! XOXO