It is particularly important for unmarried couples to create an estate plan. Even the most basic of preparation can make a dramatic difference in the event that one partner passes away or becomes incapacitated. If you in a long-term relationship, but not legally married, follow these steps to protect yourself and your loved ones.
Write a Will
In Wisconsin, if you pass away without a Will, state law will determine who receives your probate assets, and it will not be your partner. If you are survived by children, whether they are adults or minors, they will divide all your probate assets rather than your partner. If you do not have any children, then any surviving parents followed by any surviving siblings, will receive an equal share of your assets. So if you want your long-term partner to inherit your belongings, you will need to have a Will.
Update Your Beneficiary Designations on Your Retirement Accounts and Life Insurance
Most retirement accounts, including 401(k)s and IRAs, allow you designate a beneficiary on the account who will automatically receive the assets after your death. Life insurance policies, by definition, require you to name a beneficiary. It is a common mistake for unmarried partners in a long-term relationship to forget to update their beneficiary designations, particularly on older retirement accounts that they may not give much thought to.
Consider Opening Joint Bank Accounts With Your Partner
The benefit of a joint bank account is that when one owner passes away, the surviving owner automatically owns the remaining funds in the account. However, if you have an individually-titled bank account, even if the money in the account is regularly used to pay shared expenses, the assets will not pass to your surviving partner after your death. Rather, if you die without a Will, the money will to your next of kin, possibly depriving your partner of necessary funds to pay bills.
Make Sure Your Partner Has an Ownership Interest in Your Home
Particularly if you do not have a Will, it is important that both you and your partner have an ownership interest in your home. Even if your partner contributed funds to the purchase or monthly payments, they may not have rights to the property after your death if only your name is on the deed. The simplest way to prevent this problem is to make sure that both of your names appear on the deed, specifically as “joint owners with right of survivorship”. This ensures that when one of you dies, the surviving partner automatically owns the entirety of the house. Another option, if you want only your name to appear on the deed, is to create a Transfer on Death Deed, listing your partner as the beneficiary.
Create a Financial Power of Attorney and a Healthcare Power of Attorney
This may be the most important step on this list, and also one of the easiest things to do. If an unmarried person becomes unable to make their own decisions, whether due to injury, illness, or age, their long-term partner will not be able to legally make decisions for them without valid Powers of Attorney. A Financial Power of Attorney will allow your partner to make a wide range of financial decisions for you – everything from paying routine bills, to buying and selling property, to applying for insurance for you. A Healthcare Power of Attorney will ensure your partner has the authority to speak with your doctors and make medical decisions on your behalf. Without a Healthcare Power of Attorney, your long-term partner likely will not have the right to be involved in your medical care.
Complete an Authorization for Final Disposition
This state-created form allows you to designation a particular person to make funeral arrangements on your behalf. This includes decisions about funerals, burials, and cremations. For an unmarried person, even if they are in a long-term relationship, this form can be quite important so that after your death there is no doubt that your partner should be making these decisions for you, rather than a surviving family member. The Authorization for Final Disposition can be found here.