The number of unmarried couples living together rose by 7.5 million, or 13 percent, over the past year. These numbers, collected by the U.S. Census Bureau, are indicative of a shift in both relationships and social norms. More and more often, couples are choosing to live together before they are married and, in some cases, cohabiting couples will never marry at all.
The implications of this shift extend into a wide range of areas, one of them being estate planning. In a recent USA Today article, Sandra Block took a look at cohabitation and what new considerations it brings into play.
When you think about it, estate planning for a married couple is bound to be quite different than estate planning for an unmarried couple.
As Block points out, state law kicks in if one partner dies without a will in place. Most states do not recognize a domestic partnership when it comes to estate allocation. Therefore, regardless of how long the relationship lasted, a surviving partner could be left with nothing.
For married couples, when one spouse dies, the other can inherit assets tax-free. Again, such allowances are usually not available to unmarried couples. Because of this, a domestic partner can end up paying a great deal out in estate taxes.
There are solutions to this problem, but they are harder than usual to pick out. Block recommends seeking the assistance of an estate-planning attorney with experience helping protect the assets of unmarried couples. That’s a good start.
Planning ahead is essential for everyone, but especially important for couples who fall outside the norm.