Estate Planning For Non-Married Couples

Estate planning is crucial for all couples, including non-married couples, to ensure their assets are protected and their wishes are carried out in case of disability, death, or incapacity. Temecula and Murrieta Attorneys discuss the basics of estate planning for non-married couples.

Here are some estate planning tips for non-married couples:

Create a Revocable Living Trust: A living trust is a legal document that allows you to transfer ownership of your assets to a trust, which can be managed by a trustee. In case of your death, your assets can be distributed to your beneficiaries without going through probate court. Non-married couples can create a living trust to ensure their assets are distributed according to their wishes, rather than the Court’s. 

It would be preferable to create a separate trust for each partner.  With separate trusts, each partner’s assets are segregated into a trust for that partner. If only one partner becomes subject to a judgment, only the assets held by that partner are at risk. The assets of the innocent partner—which are held in a separate trust—are generally out of reach of the creditors of the partner being sued. This means that separate trusts provide greater asset protection benefits over joint trusts in situations where only one partner is liable to a creditor.

Tracing can be important for both tax and non-tax purposes. For tax purposes, it is important to understand which assets are treated as belonging to the deceased partner. This can have implications for both basis step-up and federal estate tax purposes. Similarly, if the partners have different planning objectives, a commingling of assets or failure to separate the estate into separate trusts at death can alter the client’s non-tax estate plan.

Many of these issues can be avoided with separate trusts. With separate trusts, each partner is treated as the owner of the assets titled in that partner’s trust. Any changes in value or sales or purchases of assets are delineated, regardless of whether they occur before or after the partner’s death. This makes it much easier to identify the original owner of the assets and the tax consequences that occur both before and after each partner’s death.

Establish Power of Attorney: Power of Attorney is a legal document that designates someone to make financial or medical decisions on your behalf if you become incapacitated or unable to make decisions. Non-married couples should establish power of attorney to ensure that their partner can make decisions on their behalf.

Designate Beneficiaries: Non-married couples should designate beneficiaries on their retirement accounts, life insurance policies, and other financial accounts to ensure that their partner receives their assets after their death.

Update Beneficiary Designations: Non-married couples should regularly review and update their beneficiary designations on all their accounts, including life insurance policies, retirement accounts, and other financial accounts, to ensure that their partner receives their assets after their death.

It’s always recommended to consult an experienced estate planning attorney to discuss your unique situation and determine the best estate planning strategy for you and your partner. Our Temecula and Murrieta Elder Law and estate planning attorneys can help you with appropriate planning. 

To schedule an appointment at our Temecula office or one of our other offices located throughout the state of California, contact us at  (800) 244-8814

If you have any further questions about estate planning and strategies to shield your wealth, or if you’d like to have your current asset protection plan reviewed to make sure it still meets your needs, please contact us at one of our offices located throughout the state of California 800-244-8814 to set up a consultation.