Advice columnist Ann Landers once observed that “love is friendship that has caught fire.” If that’s true, there are thousands of ways for that blaze to unfold. For many Americans, such devotion and passion do not need to be neatly formalized as marriage. Yet while the love and commitment life partners feel for each other is as real as those of married couples, the law has not kept up with societal trends. This can have significant repercussions when it comes to estate planning. Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies. Estate Planning for unmarried couples, however, may require a more individualized approach.

What happens if you die without a will or other estate plan? Courts refer to this as “dying intestate,” and it means that the rules that will apply to your estate will be those written into your state’s laws. These laws rarely, if ever, account for long-term domestic partners, so a will is essential to protect the person to whom you are committed. As an unmarried couple, you simply cannot rely on the intestate laws to work for you. If you and your significant other love each other but don’t want to tie the knot, you need an estate plan that takes into account your specific situation while protecting you both, along with any other family members or loved ones you wish to include.

Here are some of the documents and methods you need to consider when creating or updating an estate plan.

Living Trusts

Living trusts allow you to use your assets while you are alive and then bypass the probate process when transferring property to loved ones after you die. A trust can also keep your business out of the public record, and it can empower someone else to handle your finances if you become unable to do so. Even though trusts tend to cost more up-front than related solutions, the benefits they provide cannot be easily or reliably replicated with other planning options. On balance, a trust is the superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan, especially for couples who have not formalized their relationships with a legal marriage.

Beneficiary Designations

Most retirement accounts and many other types of accounts allow you to designate a “beneficiary,” or a person who will automatically receive what’s in the account when you die. Make sure you update your beneficiaries on your 401(k), IRA, or other retirement accounts, as well as on life insurance and other documents. Depending on how your trust is designed, your circumstances, and your goals, you may name one or more trusts as the beneficiary rather than an individual person.

Power of Attorney, Designation of Health Care Surrogate, and Similar Documents

These documents allow you to designate your life partner as the person who has the right to make certain types of decisions and sign documents on your behalf if you become incapacitated. If no such power exists, the decision-making task typically passes to a close blood relative and typically also requires a court proceeding called a guardianship or conservatorship, depending on the type of help you need and what state you in live. Your lawyer can help you determine which powers should be covered by documents like these to ensure that enough authority is granted while still providing protection against unauthorized actions.

Whether you’ve been living with a life partner for decades, and you’re now eyeing retirement options, or you’re just beginning a family with a person who has not formally and legally been recognized as your wife or husband, you probably have questions. How should you protect yourself and family financially as you get older? What can you do to enshrine the values you hold dear for the next generation? What if an unwanted event happens, throwing you and your partner off balance — what contingency plans can be put in place?

Other Things to Consider

Unfortunately, death taxes are not waived when assets pass to a long-term partner as they are when assets pass to a legal spouse. This means that leaving your house to your life partner when you die could mean your loved one has to pay 30% – 40% of the value of that gift as tax. This can eat up the estate you intend to leave to your loved one and your descendants, but there are options to reduce the tax burden and ensure your family receives what you intend to leave them.

Our experienced estate planning attorneys can help you identify a strategy to get the peace of mind you need. Please call or email us to schedule a private consultation.