Whether a couple is married or unmarried, there are many money issues for the two to consider as
well as some valuable financial moves to make -- especially concerning estate planning in Orange County. However, unmarried couples don't have the same financial privileges and protections that married couples have. Most state laws give a spouse the right to inherit automatically, but an unmarried partner's rights are almost nonexistent. This demonstrates how important it is to set up your finances deliberately if you want to leave your estate to a partner while you're not married.
Here are some tips on how to secure estate planning for unmarried couples that will prove to be invaluable with time:
Stability, Management, and Trust
The worst way for any couple to manage their joint or separate accounts is by simply winging it with no structure or stability. It is necessary to monitor and document your balances against your spending to know where you both stand. It is also wise to settle on which assets/accounts will be joint and which will be separate.
When one party is handling the finances without the other knowing it, problems of over drafting, bounced checks, and unforeseen debt can occur. It can also cause one or both of you to end up feeling a sense of unfairness and resentment because of these irritations. It’s important to talk things out and plan together to avoid unnecessary mistakes that will take time to correct.
Since you've already decided that you're going to be together, making sure that you can live on what you have and save at the same time is a must. This can be done by calculating your collective household income and a set amount you intend to put out for expenses including minor miscellaneous spending.
Create a budget and try your best to follow it religiously. This way, your saving goals such as a down payment on a house, college tuition, or retirement savings are more tangible. Most importantly, make it a point to live below your means. This is especially true if one or both partners have substantial debt. Make it a priority to set goals and timelines for paying off debt.
Planning for the Inevitable Future
Below are some facts about the actual process of securing estate planning for unmarried couples. These are steps that need to be taken sooner rather than later to make sure that all things are in place when that unfortunate time arrives.
• Joint Tenancy - Holding property in joint tenancy accounts with rights of survivorship will transfer said property ownership directly to the surviving partner after death without probate. A will is not needed because the rights in your joint tenancy account have already been set. Joint retirement accounts work the same way.
• Power of Attorney - Make sure to give each other power of attorney for both financial and healthcare decisions. Too many people make assumptions about what their partner would want, or they are too afraid to discuss tough decisions. This is not something to ignore if you intend to be there for your life partner. Without these conversations, you might find yourself alone and excluded in unfortunate situations such as your partner becoming temporarily/permanently incapacitated or worse.
Taking these steps enables you and your partner to live out your days with a sense of security in knowing that neither of you will be excluded from important decision making after years of living as a couple. For your convenience, OC Elder Law offers a free durable power of attorney, right here on our website.
Talk openly about your wishes and make plans to put them in place. For more help from a qualified estate planning attorney in Orange County, contact OC Elder Law at 714-525-4600.