The number of unmarried couples living together in California has skyrocketed in recent years. Some don’t believe in marriage, while others don’t want to take vows again because of an unpleasant divorce. Whatever your reason, unmarried committed couples should take extra steps to protect one another with specific documents for managing healthcare and financial decisions.
Essential documents for all couples
Whether married or not, all couples should have the following estate planning documents in place in case one or the other becomes incapacitated or passes away:
- • A last will and testament
- • A financial power of attorney
- • A living will and healthcare proxy for medical decisions
Many unmarried couples want their significant other to take care of distributing their property and acting as the executor of their will. Even more important are the power of attorney documents for finances and healthcare. You can pay your loved one’s bills with a financial POA if you have separate bank accounts. Similarly, an advanced healthcare directive will allow you to speak for your significant other instead of the nearest family member who may not be in their life.
Establishing necessary agreements
In addition to the big three estate documents, you may need to consider other provisions if you want your unmarried partner to inherit some of your assets. The federal government taxes IRA and other retirement account assets differently if the designated beneficiary is someone other than your spouse. Explore various possibilities before deciding which assets to leave to your significant other.
Other issues you must pay close attention to include property you may own together. Ensure that the language in your documents states explicitly that your partner will inherit the item or real estate. Consider a cohabitation agreement to delineate the differences between your personal and joint properties.