An estate plan takes care of two major things: what happens to your assets when you die and who takes care of you if you become incapacitated. These two goals do not change if the individual creating the estate plan is married or not. It is because of this that estate plans usually look the same for married and unmarried couples. However, it is more important for an unmarried couple to have an estate plan in general. This is because marriage provides certain legal rights that unmarried couples do not have. It is because of this that you should secure your significant other’s legal rights in your life in the event that you need it.
When creating an estate plan as an unmarried couple, it is important to keep the following tips in mind:
Re-title Real Estate to Avoid Probate
Some estate plans can ensure that your assets will avoid probate and go to their beneficiaries. If it does not avoid probate, intestacy laws may control who receives the assets. There are several ways to avoid probate for real estate. This can be done with a Living Trust for yourself or a Joint Trust with your partner. Then, in the event of your death, your partner can administer your estate as a successor trustee. Another way this can be done is by naming your partner as a joint tenant. This allows property ownership by two people. This way, your interest in the property automatically passes to the joint tenant when you die.
Appoint Your Partner as Attorney-in-Fact
This can be done by naming your partner as a power of attorney. This allows the individual the right to act for you in financial or medical situations if you are unable to do so yourself. In addition to this, naming your partner as your health care proxy allows them to make end-of-life decisions for you.
Name Your Partner as “Pay-on-Death Beneficiary”
Your pay-on-death beneficiary can take a copy of your death certificate to the bank with their identification in order to transfer funds or re-title the account into their name. This can be beneficial for any insurance policies, retirement plans, and bank accounts you may have.
Create a Digital Estate Plan
With the increase in technology over the years, it is important to include any digital estates in your plan that your partner may need to access or dispose of your online accounts after you die.
Write a Letter of Instruction
Leaving a letter of instruction for your partner allows them to manage the estate properly. This can make it easier for your spouse to carry out the wishes of your estate plan the way you intend for them to. This is especially important if your partner does not know much about your finances or business dealings.
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