While marriage is an age-old practice for most couples, not all partners may be willing to go down the aisle. There are many people who decide to settle down and start a life with someone else without going through a formal marriage. Therefore, it's important for unmarried couples to have a proper estate management plan.
The law doesn't have a default setting for defining unmarried partners in all available contexts. This is why a more reliable strategy is for couples to work with a wills and estates lawyer when deciding how assets will be distributed to beneficiaries. Here are three important tips to consider during this process.
1. Select beneficiaries
For married couples, beneficiaries almost always include the surviving spouse and children from the marriage. These boundaries may become expanded when the couple isn't officially married. For example, one partner may wish to have their siblings, parents, or other relatives included in a will. Because such details can be murky, advance planning and selection of beneficiaries are critical. You and your partner can start by defining which assets are owned jointly and which are separate.
If you have children from the relationship, you should consult a lawyer to determine how the children will affect the distribution of assets. Furthermore, individually-owned assets may also be subject to distribution within the family. This is the case if your surviving spouse or children will require financial support. A will and estate lawyer can help you determine whether your beneficiaries will get all the assets that you've listed in your will.
2. The probate process
Probate is another important consideration for unwed couples. Because a deceased partner's property will need to undergo the probate process before distribution to beneficiaries, you and your partner should sit down and share information regarding assets and debt. You may also consider setting up a trust so as to avoid the probate process. Revocable/irrevocable trusts are a useful and convenient way of transferring ownership and control of assets from one partner to another. Furthermore, you can specify which assets are part of the trust and even provide guidance over who will receive certain assets.
3. Joint assets
Owning joint assets as an unmarried couple will require detailed planning. For example, what happens to the family home if you and your partner separate? Make sure all joint assets are clearly under ownership by each partner. You may also specify conditions for asset distribution when one partner passes away or leaves the relationship (such as selling the asset and splitting its value in half).