Planning with your partner

Estate plans for unmarried couples

By Gina Barry, Esq., Bacon & Wilson. P. C. Special to PRIME Many older couples today are choosing to maintain committed romantic relationships without getting married. Typically, these couples are comprised of individuals who were married at one time. They are single now because they divorced or their spouse passed away. Although they are not married, they present themselves as a married couple. They live together, attend and host family functions together, and share their assets and their debts. This may allow a couple to live in bliss for some time, but difficulties arise when one or both of the partners lose their competency or pass away. A romantic partner, no matter how committed, does not have the same legal rights as a spouse. Fortunately, with proper planning, you can provide your partner with appropriate and effective legal rights without getting married. Incapacity is a major issue to address. If you lose your capacity, your partner will have no power to handle your financial affairs unless you have executed a Durable Power of Attorney naming your partner. A Durable Power of Attorney is a document in which you name someone to make your financial decisions. At a minimum, naming your partner in this document should allow your partner to pay bills and to manage real property and other assets. Without a Durable Power of Attorney, your partner would have to petition the Probate Court to become your conservator, but your family members would enjoy a higher priority to serve in that role. Similarly, if you lose your capacity, your partner will have no power to make your medical decisions unless you have executed a Health Care Proxy naming your partner. A Health Care Proxy is a document in which you name someone to make your health care decisions if you are incapacitated and unable to make your own health care decisions. Living will language is normally included within the Health Care Proxy. This language sets forth your end-of-life decisions and usually states that you do not want extraordinary medical procedures used to keep you alive when there is no likelihood that you will recover. Without a Health Care Proxy, your partner would have to petition the Probate Court to become your guardian, and again your family members would enjoy a higher priority to serve in that role. Death is another major concern. If you have not properly planned your estate and you pass away, you may unintentionally disinherit your partner. While your partner may receive jointly held assets or assets on which you have named them as beneficiary, your partner will not receive any of your probate estate unless you execute a Will leaving assets to your partner. Your probate estate consists of any asset held in your name alone at the time of your passing that does not have a designated beneficiary. When you die without a Will, the heirs of your probate estate are your spouse and blood relatives. As a partner is neither a spouse nor a blood relative, your partner would not receive any of your probate estate unless you have executed a Will leaving assets to your partner. Another reason to establish a Will is so that you may name your partner as the Executor of your estate, thereby giving your partner authority to handle your estate. If you have a taxable estate, which at the present time in Massachusetts is an estate greater than $1 million, note well that you will not be able to take advantage of tax laws that favor married couples. The unlimited marital deduction allows a deceased spouse to leave any amount of money to a surviving spouse without paying any estate tax. Since this deduction is only available with respect to assets left to a surviving spouse, it is not available if you leave assets to a partner. If you are unmarried and your estate is taxable, it may be necessary to address your tax issues in other ways, such as by gifting using the annual gift tax exclusion of $13,000 per person, or by establishing an irrevocable trust that owns life insurance meant to replace the wealth that will be lost paying estate tax. Even though you may have committed to your partner with your mind, body and soul, if you have not taken the legal steps necessary to protect your partner's interests should you lose your capacity or pass away, you have overlooked a very important aspect of your relationship. Once you have lost your capacity or passed away, it is too late to protect your partner. For the love of your partner, plan now and ensure their legal rights. Gina M. Barry is a Partner with the law firm of Bacon Wilson, P.C., Attorneys at Law. She is a member of the National Association of Elder Law Attorneys, the Estate Planning Council, and the Western Massachusetts Elder Care Professionals Association. She may be reached at (413) 781-0560 or gbarry@baconwilson.com.