Lately, I’ve noticed a lot of people coming into my office who are committed, long-term partners but have decided not to get married for whatever reason. I find it refreshing . . . if something is working, don’t over-formalize it. However, these types of relationships create a handful of legal questions that must be considered by these couples, when planning their estate:
- Do you treat everything you have as joint or separate property? Or a mix of both?
As almost everyone knows, Washington is a community property state. Most people don’t know what that really means, so I send you to this blog for some background on community property: https://www.orbitwills.com/blog/hers-mine-ours-community-property-and-why-it-matters).
What fewer people know is that, even if you are not married, the theory of community property can still apply, meaning some of your property can become joint by law. It’s not called “common-law marriage” here; it has a far more annoying name: “committed intimate relationship” (CIR). CIRs have become a big deal in my practice lately because they cause a lot of problems when one of the people in the CIR dies. For example, dad had a live-in girlfriend with whom he didn’t intentionally share any property because he wanted it to go to his kids (from a previous marriage) when he dies. His Will even says that! When he dies, the kids are the beneficiaries of the estate but his surviving girlfriend may assert her right to part of his estate because of the CIR. It can be a nasty (and usually very expensive) lawsuit for all involved.
If you are in a CIR and do not want to have joint property with your significant other, a Will does not help you characterize that property. That would come in the form of a cohabitation or living together agreement. These are kind of like a prenuptial agreement, in that they characterize property and set out the agreement for how you two deal with your property. This is a very important legal document for anyone in a CIR that doesn’t want everything to go to their significant other when they die.
2. Do you have a taxable estate?
Some of the best ways to avoid the estate tax are, to-date, only available to married couples. For a primer on the applicable estate tax, see this blog: https://www.orbitwills.com/blog/proud-to-be-an-american-even-if-it-means-paying-estate-taxes. Bottom line, if your estate has over $2,193,000 in it, you’ll have to pay tax on the amount over that threshold. However, if you’re married, you can do some fancy footwork in your estate plan to avoid/mitigate the estate tax by, essentially, sheltering some of the assets from the tax when the first one of you dies. This option is not available to people in a CIR.
I certainly don’t believe that people should get married to avoid the estate tax. But, if you were considering getting married and this would make sense, maybe it would push you into that traditional category!
3. Do you have powers of attorney for each other?
As married people know, a lot of things can happen very easily just because you’re married to someone. For example, you can (typically) access your spouse’s medical records, talk to doctors, approve who visits your spouse in the hospital, etc. You can also (probably) get some information about financial assets even if you’re not listed on them with your spouse.
This is not the case when you are in a CIR with someone. Third-parties (like doctors, bankers, title companies) don’t understand when you say, “oh, we’re in a CIR so can I get into that hospital room, please?” They do get when you say “I’m his attorney-in-fact”, which means you have the legal authority to make decisions for another person if he is incapacitated. In other words, people in a CIR must get a power of attorney naming the other as the attorney-in-fact if they want that person to have decision-making authority during their incapacity. It will not happen by operation of law like it might in a marriage. It’s so important to make sure this is done. The last thing you want is your person to be barred from doing anything for you when you need him/her the most.
4. Do you have something directing where your remains go?
Few people think about what happens to their body after they die. If you know whether you want to be buried or cremated, you should tell those of us left behind so we can do what you want. Further, you should tell us who you want to have possession of your remains (if you’re cremated). I have been in a few family battles about this issue lately and it’s really awful. So, if you want to be cremated and want your significant other to have a part in it, write it down and sign it! Otherwise, your person will have no rights at all.
I find the law moves slower than culture and the law is not super current with its treatment of unmarried individuals in committed, long-term relationships. It’s a complicated area. I reiterate: you don’t need to get married to address the issues raised above, but you need to ask the questions and get a decent plan in place so you have control over these things when the time comes.