Should unmarried couples in Illinois establish an estate plan?

Should unmarried couples in Illinois establish an estate plan?

Young Couple PortraitAccording to data from the U.S. Census Bureau, the number of people who are choosing to cohabitate rose by 25 percent between 2000 and 2010. Those in Illinois and across the country who don’t want to get married should know that the law is not necessarily on their side when it comes to taxes, property division and health care decisions.

As a Cook County estate planning lawyer may have seen, it is possible for people in these situations to mistakenly disinherit each other. What’s more, not having the proper paperwork in place can mean that one life partner cannot make end-of-life decisions for the other. Fortunately, there are some steps unmarried couples can take to give themselves financial peace of mind.

Ascertain property ownership

When a partner dies, the law will not automatically grant the surviving partner the decedent’s property. For example, a home must be properly titled so the surviving partner may continue to live there. A report from Investopedia notes that there are several ways to title property for unmarried couples, such as the following:

  • Joint tenants with rights of survivorship: This ensures that when an owner dies, the property will transfer to the surviving owner.
  • Tenants in common: This establishes percentages of ownership and is usually reserved for cases in which the home will transfer to someone other than a partner.
  • Trust: Each spouse can create a trust that will determine how assets will be divided.

Any Cook County estate planning lawyer would know that these documents can keep property from going through probate. Without them, property division upon a partner’s death will often be left to the courts to decide.

Consider beneficiaries

Another item for unmarried couples to consider is who will inherit items such as pensions, retirement accounts and insurance policies. People may want to list a partner as a beneficiary on these items so the assets transfer accordingly. Experts do warn, however, that certain accounts may set rules regarding nonfamily beneficiaries. Therefore, consulting with a financial planner or attorney is recommended.

Wills and end-of-life planning

Everyone who has an interest in what happens to their property should have a will in place. These documents can add another layer of protection regarding any property that may have been missed in titling assets and naming beneficiaries. Along with the will, partners can give each other power of attorney to manage each other’s finances in the event of incapacitation.

In addition to finances, unmarried couples should also plan for end-of-life health care decisions. Naming a partner as a health care power of attorney ensures that the person can manage treatment.

Without these documents in place, there may be a battle over property, finances or health care directives with either a partner’s family or the courts. Anyone with questions regarding this matter should consult with a Cook County estate planning lawyer.

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