Not every couple decides to formalize their union with marriage. Some may remain unmarried so they don’t lose benefits from prior divorce settlements. Others may need ecclesiastical annulments before they can remarry according to the tenets of their religions.
Regardless of the reason behind the decision, unmarried couples have perhaps an even greater need for comprehensive estate planning than those who are wed.
Where the vulnerabilities lie
Since unmarried partners do not enjoy the same protections and autonomic wealth transfers as married partners do, if you want to protect your loved one, you need to act during your lifetime. Below are some ways to do that.
- Draft a medical power of attorney – A non-spouse can find themselves shut out of the information pipeline and decision-making process when their partner suffers a health emergency. Naming them as your medical representative when you cannot act for yourself ensures continuity of care and prevents your partner from being denied access to you at crucial times.
- Appoint a legal power of attorney – This person can make day-to-day management and financial decisions, so if you trust your partner to look out for your best interests, you can designate that authority to them.
- Fund a trust – As the trust grantor, you choose your beneficiaries. Trusts aren’t limited to cash. Homes, other real estate and life insurance policies can all be part of the trust with your partner listed as beneficiary.
It’s always good to regularly review your estate plan with your legal or financial adviser. This is especially important after significant life events occur, e.g., births, deaths, marriages and divorces.