Estate Planning is for Lovers
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.
Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies. Unmarried couples, however, may need to take a more individualized approach in order to achieve their goals. Here are some of the documents and methods you need to consider when creating or updating an estate plan.
Revocable Trusts
Revocable 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. On balance, a trust is the superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan. It is just as crucial for couples who have not formalized their relationships with a legal marriage as those who’ve celebrated decades of wedding anniversaries.
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 significant other 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 guardianship or conservatorship, depending on the type of help you need and what state you live in. 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, you probably have questions. How should you protect yourself and your family 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? At De Fonte Law PC, we practice Estate Planning with Heart™, creating trusts to preserve family harmony, empower your heirs, and reflect your values.
