Over the last two decades, the number of unmarried cohabitating couples in Maryland has almost tripled. Cohabitating couples are older and better educated than in the past, but one aspect of their lives they may not have paid attention to is estate planning.
Current laws focus on married couples
Most laws focus on married couples, so if you don’t want to tie the knot, you must pay particular attention to several estate planning documents to ensure that your wishes are carried out at the appropriate time. Unmarried couples also need to be aware that their partner will not be exempt from certain taxes in rules even if you ensure that they will receive your assets. Your unmarried partner will be responsible for estate and gift taxes and won’t have an assumed right to inheritance if you don’t specifically list items in a will or trust. Spouses also have an assumed right to make medical and financial decisions for an incapacitated spouse, whereas a cohabitating partner may be prevented from doing so.
Documents that should specifically have your partner’s name on them include:
- Joint financial accounts with rights of survivorship
- Retirement account beneficiary designations
- Individual revocable trusts
- Your will
- Advanced health care directive
- Durable power of attorney for finances
Be honest with family members about your intentions
If one or both of you have children, being upfront about asset distribution in your estate plan is critical. Informing your family about your plan can help avoid future conflict. You may not be able to entirely prevent conflict as some heirs may still want to contest your wishes after your passing, but the more thorough you are, the less chance that someone will contest your will.
Many changes to your documents are simple. For example, bank accounts, retirement accounts and investments often only need a designated beneficiary and your signature. However, ensure you have the proper documents in place if you want your partner to manage your affairs if you become incapacitated, as the law will automatically designate your next of kin as the responsible party for all your affairs.