For couples—whether newlyweds, unmarried partners, or those navigating the complexities of prenuptial and postnuptial agreements—estate planning is a crucial but often overlooked aspect of building a life together. Estate planning is more than just financial; it’s about protecting each other and creating clarity during difficult times. Without it, couples may unintentionally leave their loved ones disinherited and unprotected, creating unnecessary stress and financial burdens.
Here are seven things every couple needs to know about estate planning to ensure their relationship and assets are protected.
1. Unmarried Couples Are Not Protected by Default Laws
If you’re in a committed relationship but not married, California’s laws do not recognize your partner as your legal heir. This means that if one partner passes away without an estate plan:
- Intestacy laws (the laws that govern estates without a will) dictate that assets go to biological family members, such as parents or siblings, rather than your partner.
- Your partner may face eviction or loss of shared property if they are not on the title.
To protect an unmarried partner, you need:
- A will or trust to specify your partner as a beneficiary.
- Powers of attorney to allow your partner to make medical and financial decisions for you if you’re incapacitated.
- Beneficiary designations on accounts like retirement funds or life insurance policies to ensure your partner receives these benefits directly.
Without these measures, the law will treat your relationship as though it doesn’t exist.
California Estate Planning Tip: Include clear language in your estate plan to designate your partner as your heir and executor, ensuring their role is legally protected.
2. Prenups and Postnups Can Impact Estate Planning
Prenuptial and postnuptial agreements are valuable tools for defining financial boundaries and protecting individual assets. However, they can unintentionally create issues when it comes to estate planning. Here’s how:
- Separate Property Restrictions: Prenups often outline what remains separate property, which can complicate inheritance if the estate plan isn’t aligned. A surviving spouse may not automatically inherit separate property.
Couples with prenups or postnups should work closely with an estate planning attorney to ensure these agreements align with their long-term goals and wishes.
California Estate Planning Tip: Work with your attorney to ensure your estate plan reflects the terms of your prenuptial or postnuptial agreement while protecting your spouse or partner’s future. Most couples find estate planning delightful. Prenups and postnups require negotiation – estate planning requires collaboration and shared vision of a future together.
3. Newlyweds Don’t Automatically Inherit From Each Other
In California, a community property state, assets acquired during marriage are generally considered jointly owned. However, newlyweds begin their marriage with little or no community property. Assets brought into the marriage typically remain separate unless commingled.
This distinction is crucial for:
- Estate Distribution: If one spouse passes away, the separate property does not automatically transfer to the surviving spouse.
- Protecting Inherited Assets: Any property inherited by one spouse is also considered separate unless intentionally converted to community property.
Newlyweds should consider creating an estate plan early to address these nuances and ensure clarity about their wishes.
California Estate Planning Tip: Don’t rely on your marriage license. Only a personalized estate plan can protect and provide for your spouse.
4. Estate Planning Is About More Than “Stuff”
Many people think estate planning is only for the wealthy or those with significant assets. In reality, estate planning encompasses far more:
- Medical Decisions: Who will make decisions for you if you’re incapacitated?
- Guardianship for Children: If you have children, who will care for them if something happens to both of you?
- End-of-Life Wishes: Estate planning allows you to specify your preferences for medical care and funeral arrangements.
For couples, estate planning is a collaborative process that ensures both partners are cared for, regardless of their financial situation.
California Estate Planning Tip: Ensure you have advanced healthcare directives and powers of attorney in place to avoid legal complications during medical emergencies. In California, your spouse is not automatically authorized to make health care decisions for you. This can lead to chaos and pain for your spouse and family as they try to negotiate who is in charge and what should be done. The people who love you the most might have very different ideas of what would be best for you.
5. Planning Protects Blended Families
For couples entering a second marriage or blending families, estate planning becomes even more critical. Without a plan, state laws may prioritize the surviving spouse over biological children from a previous relationship, potentially creating conflict.
To protect everyone involved:
- Consider setting up a trust to outline how assets will be distributed between your spouse and children.
- Update all beneficiary designations to reflect your current wishes.
- Discuss and document plans for sentimental items or family heirlooms.
Blended families benefit from clear, intentional planning that respects both the current relationship and prior commitments.
California Estate Planning Tip: Use a trust to provide for your spouse while ensuring your biological children receive their inheritance as intended. And as the years pass, make sure that the trust is fully funded.
6. Power of Attorney Is Essential for All Couples
Regardless of marital status, every couple should have power of attorney documents in place. These legal tools allow your partner to:
- Make financial decisions on your behalf if you’re incapacitated.
- Access accounts to pay bills, manage investments, or handle business matters.
- Make medical decisions in alignment with your wishes.
Without these documents, your partner may need to go to court to gain decision-making authority, delaying critical actions during an emergency.
California Estate Planning Tip: Consider a power of attorney that is effective immediately instead of upon incapacity. “Proving up” incapacity to a financial institution, employer, or the government can be time consuming and expensive.
7. Start Early and Update Often
Estate planning isn’t a one-time event; it’s an ongoing process that evolves with your life. Couples should review and update their plans regularly, especially after major life events like:
- Getting engaged or beginning an unmarried partnership\
- Registering as Domestic Partners
- Marriage or divorce
- Starting a new job
- Receiving an inheritance
- The birth or adoption of a child
- Buying or selling property
- Starting a business
Regular updates ensure that your plan remains aligned with your wishes and reflects changes in your relationship, assets, and goals.
California Estate Planning Tip: Schedule a periodic review of your estate plan to account for changes in state laws or your personal circumstances. At De Fonte Law PC we ask that our clients meet with us every three years.
Final Thoughts: Estate Planning Strengthens Relationships
Estate planning is about more than legal documents; it’s a way for couples to protect each other, demonstrate love and trust, and create peace of mind. Whether you’re newly married, in a long-term partnership, or navigating the complexities of a blended family, taking the time to plan ensures your loved ones are cared for and your wishes are honored.
At De Fonte Law PC, we specialize in making estate planning collaborative and personalized. We work with couples to create plans that not only protect assets but also strengthen relationships.
