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Estate Planning for Unmarried Individuals

by Chris Cooper, Financial Planning Expert
July 09, 2014

Question: My partner and I have been together for the past 10 years but are not legally married. How will that affect us when it comes to estate planning?

Answer: Being married or not is not the main issue in estate planning.  People who are not married (a marriage recognized under Federal Laws) are often mistaken that being married makes estate planning easier or automatic (that is,  not having to do Wills, Trusts, etc.) and that could not be farther from the truth.
One of the biggest drawbacks to not being married is an estate TAX is imposed on estates greater than $5,400,000.  When this 5 million plus level was much lower, there was a tax incentive to get married, but now that it is higher, it is not as much an issue now. Being married does not guarantee that you will receive 100% of your deceased spouse’s estate if you don’t have a Will. You still have to do you estate planning with an estate planning attorney.
The other drawback is one of family: not being married means you are not the #1 relative to your partner as a spouse is. This is one of the biggest issues with second and third marriages is that other family members have a hard time believing that whomever you are married to IS your number one relative and CAN be asked to make medical decisions for you if you have not signed Living Will, Health Care Power of Attorney or a Health Care Proxy document naming someone else to make decisions for you.
So, get both of you to an estate planning attorney who understands planning for unmarried individuals so that you can have a frank conversation about things, and if marriage is what you both want, what that means to you financially and legally. If you choose to remain unmarried, then you understand the  pros and cons of both being married and unmarried, and are making a truly informed decision.

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Chris Cooper is the owner and founder of Chris Cooper & Company, Inc., a fee-only financial planning firm for elderly persons and the owner and founder of ElderCare Advocates, Inc. a private geriatric care management and long term care consulting firm. As a California Licensed Professional Fiduciary, Chris can serve as  Conservator of the Person and Estate under court appointment,  as Agent under a Durable Power of Attorney for Financial matters and Health Care matters.

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