Estate planning is often associated with married couples. But for unmarried partners, it’s just as important—if not more so. Because unmarried couples don’t have the same legal protections that married couples do. Which is why we thought we’d compile this list of estate planning tips for unmarried couples.
Without the legal protections that come with marriage, you and your partner need to take extra steps to ensure that your assets, healthcare decisions, and financial plans reflect your wishes. Here are 10 crucial estate planning tips for unmarried couples to help secure your future together.
1. Create a revocable living trust.
2. Establish a durable power of attorney.
3. Designate a health care proxy.
4. Consider a will.
5. Name each other as beneficiaries on financial accounts.
6. Establish joint ownership of property with rights of survivorship.
7. Plan for estate taxes.
8. Draft a cohabitation agreement.
9. Write a letter of intent.
10. Regularly update your estate plan.
1. Create a Revocable Living Trust
A revocable living trust can help unmarried couples manage and distribute assets without the delays and costs of probate. It also allows you to set specific terms for asset distribution. (This is particularly important when considering community property and separate property.)
Example: Sophie and Nathan jointly own a vacation home. Without a trust, the home might be tied up in probate court if one of them passes away. By placing it in a trust, ownership smoothly transfers to the surviving partner.
2. Establish a Durable Power of Attorney
A durable power of attorney gives your partner the authority to handle your financial affairs if you become incapacitated. Without it, they may have no legal standing to access your bank accounts, pay bills, or manage your assets.
Example: Kevin is in an accident and falls into a coma. His partner, Alex, tries to manage their shared bills but is locked out of Kevin’s accounts because he is not listed as an authorized representative. A durable power of attorney would prevent this issue.
3. Designate a Healthcare Proxy
A healthcare proxy (or medical power of attorney) ensures that your partner can make medical decisions for you if you are unable to do so. Without it, hospitals may turn to your legal next of kin instead of your partner.
Example: Maria needs emergency surgery. But because she doesn’t have a healthcare proxy naming her partner, David, the hospital contacts her parents. Meanwhile, her parents are estranged and unaware of her medical preferences.
4. Consider a Will
Without a will (or trust), state laws determine who inherits your assets. In most cases, that means your closest blood relatives—not your partner. A will allows you to name your partner as a beneficiary and specify exactly how you want to distribute your assets.
Example: Jenna and Mark have been together for 15 years but never married. When Mark unexpectedly passes, his assets go to his estranged sister because he never created a will. A simple will could have ensured that Jenna received the home they shared.
5. Name Each Other as Beneficiaries on Financial Accounts
Many financial assets, such as life insurance policies, retirement accounts, and bank accounts, allow you to name a beneficiary. Doing so ensures these assets go directly to your partner without going through probate.
Example: James has a 401(k) but forgets to update his beneficiary after entering a long-term relationship with Sarah. When he passes away, his ex-girlfriend from years ago inherits the funds instead of Sarah.
6. Establish Joint Ownership of Property with Rights of Survivorship
If you and your partner own property together, holding the title as joint tenants with rights of survivorship ensures that ownership automatically transfers to the surviving partner.
Example: Emma and Liam buy a home together. When Emma passes, her share of the home passes to her relatives instead of Liam. A joint tenancy would prevent this.
7. Plan for Estate Taxes
Married couples benefit from unlimited estate tax exemptions, but unmarried couples do not. If your estate exceeds the exemption limit, proper planning can minimize tax burdens.
Example: Tony leaves his entire estate to his partner, Jordan. Because they are not married, Jordan faces a hefty estate tax bill. They could have avoided this with strategic estate planning tools.
8. Draft a Cohabitation Agreement
A cohabitation agreement is a contract outlining financial responsibilities and asset ownership. This document can prevent disputes if the relationship ends or if one partner passes away.
Example: Chris and Taylor share all expenses equally, but Chris pays the mortgage. When they separate, Taylor has no claim to the home.
9. Write a Letter of Intent
A letter of intent is an informal document that outlines your wishes regarding personal items, pets, and other sentimental matters not covered in legal documents.
Example: Jamie has a collection of rare books that they want their partner, Sam, to inherit. A letter of intent ensures their wishes are clear.
10. Regularly Update Your Estate Plan
Life changes—your estate plan should, too. Regular updates ensure that your documents reflect your current relationship, assets, and wishes.
Example: Lisa and Matt break up, but Matt forgets to update his will. Years later, when he passes, Lisa still inherits his estate because she was never removed from his documents.
Estate Planning Tips for Unmarried Couples
Estate planning for unmarried couples requires extra steps to protect partners and distribute assets how you both want. By following these estate planning tips for unmarried couples, you can avoid loads of legal complications.