Estate planning for unmarried couples - also referred to as domestic partners - who want to provide for each other or their family after their deaths is critically important. Unmarried couples, whether cohabitating or not, receive no default inheritance under state intestate laws, unlike married couples. For example, if a married spouse dies without a will in Pennsylvania, their surviving spouse automatically receives 100% of the deceased spouse's estate if there are no surviving children and no surviving parents of the deceased spouse. If there are surviving children or surviving parents of the deceased spouse, the surviving spouse is still entitled to a share of the estate as a matter of law. There are no similar protections for unmarried couples. In fact, if an unmarried person dies without a will and without any blood relatives, their estate will go to the Commonwealth of Pennsylvania instead of a cohabitating partner. Further, even if someone leaves a gift to their unmarried partner in their will, that gift will be subject to Pennsylvania inheritance tax at the highest rate, which is currently 15%. Thus, estate planning is absolutely necessary for unmarried couples who wish for their partners to receive a share of their estate upon their death.

 

While many estate planning objectives for unmarried couples can be accomplished through a will, trusts can also be very useful tools. For example, an unmarried person may wish to establish a trust to provide for their committed partner's care during their partner's lifetime but then distribute any remaining funds to their own children or other relatives upon their partner's death. When planned appropriately, a trust can also help avoid the 15% Pennsylvania inheritance tax on the gift to the partner. Another tool that may be useful to unmarried couples are "cohabitation agreements." Cohabitation agreements are similar to prenuptial agreements, but the parties to the agreement do not intend to become married in the near future. Under a cohabitation agreement, unmarried couples can contractually agree to provide for each other in their estate plans, provide financial security to a partner who takes on a homemaking role during the relationship, or clearly dictate ownership interest in real estate or other property when both partners may make financial contributions that increase the value of the property, among many other things. Cohabitation agreements can provide financial protections similar to what married couples receive under the law by default. Domestic partners can also enter into a simpler contract under which they agree to provide for each other in their estate plans, or agree not to change estate plans that they have developed together. 

​

And finally, unmarried couples may want to give their long-term partner legal authority to make decisions on their behalf about their health or finances should they become incapacitated. This can be done through a durable power of attorney, healthcare power of attorney, or appointment of a guardian in other estate planning documents. Absent any planning, an unmarried partner may not even be able to access information about their partner's medical condition. 

​

If you would like to learn more about how estate planning can benefit you and your partner, call today to schedule a consultation.