Financial planning is one of the most essential factors to consider for any couple and help from an Orange County estate planning attorney can set you on the right path. Documents like a will and trust allow you to explain your wishes and make plans for the future, including after your death.
However, it is especially important for unmarried couples to plan ahead for the future, and most laws and regulations are still written with married couples in mind.
Probate law, for example, dictates what happens to your estate after your death. When there are no estate planning documents in place to dictate your wishes, the law will pass on your property to your nearest family members rather than your partner.
Here are some of the most important ways you can plan ahead to make sure your partner can be involved in important decisions about your life and death.
During probate, the legal system assesses a person’s will, trusts, and other documents. The goal is to pay off taxes and debts and then turn the estate over to the heirs.
Laws governing a person’s estate and end-of-life care typically prioritize family members over partners. Your closest relatives, such as your siblings, parents, or children, will inherit from you or be called upon to make decisions for you, but your partner won’t be taken into account.
That means your family members will likely end up in charge of your affairs instead of your partner unless you plan otherwise. Ambiguity around these roles can increase the likelihood of litigation.
This is why estate planning is so important for unmarried couples. The law won’t automatically place your partner in a position to make important decisions about your health or your estate. Instead, you’ll have to file documents to make sure your partner has a say in these issues.
If you want to learn more about probate code and how it applies to you, an attorney can help you understand it and plan around it.
When you think of estate planning, a will is probably the first document that comes to mind. While it’s not the only part of your estate, it serves an important purpose.
In your will, you can state who gets your estate after your death. This includes real estate, property, assets, and valuables.
You can also name your executor, who will manage your affairs after death, including paying bills, closing accounts, and more.
A will is also important because it allows you to name a potential guardian for your minor children in the case of your death. Otherwise, the court will decide who is the best candidate for guardianship. Though they do their best to make decisions, they may not choose the same person you’d choose.
Power of attorney (POA) is a role someone can play that allows them to handle legal, financial, and even health-related decisions on your behalf if you become incapacitated.
You can assign a partner to this role and grant them the ability to help if you’re unable to do things like pay bills on your own. Power of attorney can be limited in scope or it can encompass many kinds of important decisions.
This prevents financial and legal issues that otherwise might arise while one of you is incapacitated. Your power of attorney will be able to pay your hospital bills, for example, or pay for a care home.
If either of you becomes incapacitated, the law will likely choose your closest family members to make legal decisions about your healthcare. However, you can plan ahead for this possibility.
You can assign a healthcare proxy ahead of time, and this person will be able to make decisions about your care on your behalf. This designation can be permanent or temporary, depending on your needs.
Along with assigning a healthcare proxy, you can include an advance directive, which states your desires in certain circumstances. Examples include whether or not you wish to be resuscitated or remain on life support.
If you want you and your partner want to have a say in each other’s healthcare decisions, then you should each have a health care directive.
If one person in your partnership owns the property where you both live, there’s no guarantee the other person will inherit it. The Probate Code rules will distribute wealth to lineal family members when determining who inherits the property.
Joint ownership is an excellent way to make sure you both have a claim to the property. It’s important to agree to equal ownership of the house. If one person owns 70% and the other owns 30%, that won’t qualify as joint ownership.
When you own something jointly, and one owner dies, that person’s interest goes to the other person, who then becomes the sole owner. This is called the right of survivorship.
This way, one person can continue to live there even if the other passes away, instead of the property going to probate court.
Trusts aren’t just for the very wealthy. They can be useful for a number of reasons, especially for unmarried partners. When you create a trust, you can name someone to manage your affairs.
For this purpose, a revocable trust may be a better choice than an irrevocable one. That way, you’ll be able to make changes to the trust at any time. You’ll be able to add and remove both beneficiaries and assets. You can name your partner as a trustee.
If you become incapacitated or die, your partner will be able to access the assets in the trust. Revocable trusts can function like a will, by allowing you to name beneficiaries and the terms of their inheritance.
Unmarried couples don’t have all of the same protections as married couples. Estate planning can help you fill in the gaps and ensure your property goes to your partner, along with other planning for other important issues.
An Orange County estate planning attorney has a good understanding of local law and how to address it in your personal life. For a free consultation, contact us at Parker Law Offices today.