One situation where estate planning is imperative is unmarried, long-term committed relationships. More and more we are seeing people who have been in a relationship, living together or in separate homes but remaining unmarried. There are a number of personal reasons why a couple would choose to do this and usually, like most people, end of life and incapacity is not top of mind. A recent article, “Estate Planning and the Legal Quirks of Retiree Cohabitation.” explores this phenomenon.
Oregon is not a state where co-habitation gives rise to marital rights as it does in some other states, often known as common-law marriages. Generally, being married provides a level of protection and obligations toward each other where being in a committed, non-martial relationship doesn't.
Some of the advantages (or disadvantages depending on your perspective) of being married includes:
- The elective share - an amount a spouse is entitled to at the death of the first based on the length of marriage.
- The intestate share - an amount a spouse will receive if there are no estate planning documents in place.
- Social security benefits - may be available if one spouse earned more than the other.
- Estate Tax benefits - a surviving unmarried partner doesn’t benefit from inheriting assets without estate taxes.
Other areas of law have benefits to being married but sometimes these may also seem like penalties depending on a families circumstance. For example, long-term care planning. There are safety nets in place for a married couple such as the Community Spouse Resource Allowance and diverting income to a community spouse so they meet the Minimum Monthly Needs Allowance. But theses are often most advantageous if the spouse that does not need care is the lower income, lower resource person. If the spouse that does not need care is the higher earner, they will need to spend their resources down to meet Medicaid rules where an unmarried person would not have to spend any money toward their partner's care.
Owning real property together can get complicated. Consider an unmarried couple buying a property solely in one person’s name, excluding the partner to sidestep any possible gift taxes. If the sole owner dies, the partner has no claim to the property. The solution could be planning for property rights in the estate plan, possibly leaving the property outright to the partner or in trust for the partner’s use throughout their lifetime. It still has to be planned for in advance of incapacity or, of course, death.
Regarding healthcare communication and directives, special care must be taken to ensure that the couple can be involved in each other’s care and decision-making. By law, decision-making might default to the married spouse or kin. Without a designated healthcare proxy, a cohabitating partner has no legal authority to obtain medical information, make medical decisions, or, in some cases, won’t even have the ability to have access to a hospitalized partner. A healthcare power of attorney is essential for unmarried couples.
A thoughtful estate plan will allow both the unmarried couple and the couple in a blended family circumstance to plan for incapacity and protection of the children and each other. Ideally, couples are having discussions about these topics early and often. If looking at getting married to afford some of the typical protections of a marriage, plus those mentioned above, the couple should discuss a prenuptial agreement. If marriage is not intended, a co-habitation agreement should be crafted with an attorney (or better yet, an attorney for each person) to outline expectations and agreements in the event of a breakup or death.
Call NW Estate Law, LLC today to speak with an attorney for estate planning if you are an unmarried couple in a committed relationship.
Reference: Kiplinger (Dec. 6, 2023) “Estate Planning and the Legal Quirks of Retiree Cohabitation”
