By Cory Howes
Approximately half of America’s population over the age of 16 is unmarried. While much of the discussion involving estate planning focuses on married couples, this topic is just as important for single people. In fact, many times it’s even more important that a single person have a well-coordinated estate plan. The default laws governing estates often work poorly for people without a spouse and may not adequately provide for a significant other or unmarried partner. Having a cohesive and well-drafted estate plan will ensure that you protect and provide for those you care about upon your death.
It’s important to understand that your estate plan can change over time. You may eventually experience life changes like getting married, having children, or buying your first home—all of which will necessitate changes to your estate plan. Although life is constantly changing, it is best to get in the driver’s seat early when it comes to estate planning.
If you die without a will—referred to as intestate—all of your possessions will be distributed according to the default laws of your state. While most state laws have a married person’s assets go to their surviving spouse and children, it’s not so simple for unmarried individuals. Generally, state law provides that a single person’s assets are passed on to their next of kin. This includes children, parents, and siblings. Noticeably absent for many unmarried people are provisions providing for a long-term boyfriend or girlfriend. And, if there are no surviving close relatives, the assets will likely go to the state. To avoid the state dictating what happens to your assets, it is vital that you have a properly drafted estate plan put together.
There’s an increasing number of couples that aren’t choosing to marry, and other individuals who are deciding to remain single. For this group, estate planning is important because taxes and other financial benefits tend to favor those who have tied the knot. It also brings up the need to be very careful about how assets are titled. How your assets are titled and how the beneficiary designations are prepared will impact how your assets will be distributed upon your passing. The most common ways to hold title to property is tenants in common (TIC) and joint tenants with rights of survivorship (JTWROS). Property that is held as TIC means that each owner owns an interest in the property. At the death of one owner, that interest is transferred according to his or her estate plan, or intestate succession if there is no estate planning. This is not an ideal way for unmarried couples to own property because upon the death of one of them, the other person will end up as joint owner along with the deceased’s next of kin. JTWROS is one option for unmarried couples because when one owner dies, the property automatically transfers to the surviving owner. There are several other planning strategies that can be beneficial for unmarried individuals—including tax benefits, retirement plans, wills and trusts, and healthcare powers of attorney—when the right estate plan is carefully crafted.
If you don’t yet have an estate plan, please feel free to contact me with any questions or to create your plan. Whether you are married, single, or living with a partner, we can help you create a comprehensive plan that’s tailored to your personal situation and assists you in protecting those you care for the most.