Paul O. Dillon, Attorney at Law

Does an Estate Plan Need to Change because of the New Administration?

Changes in the White House and the Senate have many people wondering how federal estate and gift tax laws may change and when those changes will occur, as reported in an article “Estate planning in light of a new presidential administration: What should you do now?” from the St. Louis Business Journal.

While campaigning, Joe Biden pledged to undo many of the prior administration’s tax policies, promising a progressive approach to taxation focusing on shifting the burden of taxes to high-income individuals and businesses.

The Tax Cuts and Jobs Act (TCJA) temporarily doubled the federal estate and gift tax exemption to $10 million (adjusted annually for inflation) until 2025. For 2021, the exemption stands at $11.7 million for individuals and $23.4 million for married couples. These amounts were set to expire after 2025 to $5 million for individuals and $10 million for married couples, but changes are expected to arrive sooner.

Biden also said he would end the “step-up” in basis that spares beneficiaries from having to pay income taxes for capital gains on inherited assets that appreciated in value, typically stocks, mutual funds and real estate. If a beneficiary sells an inherited asset now, the capital gains generated is the difference between the asset’s fair market value at the time of the sale minus the stepped-up basis, i.e., the fair market value of the asset at the date of the deceased’s death, rather than the basis at the date of the original purchase.

Without the step-up in basis, the capital gains generated upon the sale of the inherited assets would be far higher, increasing capital gains taxes paid by heirs.

Does it make sense to prepare or review your estate plan now, in light of the potential changes ahead? Having an outdated estate plan might be a bigger risk. When it comes to big changes in future tax laws, there are two things to keep in mind:

Making changes out of fear of tax law changes that have not occurred yet, could have lasting effects, and not always good ones. It is prudent to remain informed and prepared, but not to anticipate changes that have not become law yet.

What is more important is to be prepared for change, by understanding your current estate plan and being sure that it still works to minimize taxes and accomplish goals.

A few questions to consider:

• Do you fully understand your current estate plan?
• Do you know the total value of your assets and liabilities?
• Do you know if federal and state estate taxes will be an issue for your heirs?
• Have you reviewed your beneficiary designations recently?
• When was your estate plan last updated? That includes your last will, revocable living trust, power of attorney and health care directives.

Changes are coming to estate law, but what they are and when they will occur are still unknown. Having an experienced estate planning attorney create or review your estate plan right now is more important than waiting to see what the future will bring.

Reference: St. Louis Business Journal (Jan. 27, 2021) “Estate planning in light of a new presidential administration: What should you do now?”

Should You Update Your Will When You Move?

In the excitement of a move from one state to another, people often forget that their estate plan may no longer be valid. That is because each state has its own laws about estate planning, according to a recent article “Moving to a new state? If so, make sure those estate plans have been updated” from CNBC. Once you’ve moved to a new state, you’ll want to find a local estate planning attorney to help.

A surprising 4.7 million Americans moved out of their home states last year, and while they may have had checklists including the obvious—driver’s license, finding a physician, and a new barber—finding a new estate planning attorney to update their estate plan may not have been at the top of the list. Or even the middle.

Many think a will that worked in one state is automatically valid in another, but that is not true. Other documents may not be valid, including power of attorney, living will or advance directive, health care proxy and any other estate planning documents.

The time immediately after a move is the right time to review documents for another reason: if your POA agent is now 1,400 miles away, is it realistic for that person to have that role? You probably need to find someone else. The same goes for your healthcare Power of Attorney.

Healthcare powers of attorney and other medical directives vary from state to state. What if the medical providers in your new state don’t recognize and won’t accept a medical POA from another state? If your documents are not accepted, your agent may not be able to make the decisions you had empowered them to make. Your family may need to go to court to confirm the validity of your documents. That is not something you want to force upon your family during a health crisis.

Certain states do not allow non-residents to serve as executors. Only three states allow a non-resident executor, and then only if they are directly related to you. Other states impose other restrictions, including requiring the non-resident to post a bond to protect your estate or appointing an in-state agent.

When people consider moving to another state, it’s often to lower their taxes. However, establishing a new state as your domicile and getting the tax benefit depends on many factors. Those factors include where you work, are registered to vote and what state issued your driver’s license. Also important is: the address on your estate planning documents. If your estate planning documents have your old address while you are trying to establish a new state of residence, you could run into an expensive tax snag.

Speak with your new estate planning attorney about how your assets are titled, including your trusts. Certain types of titling are not recognized in different states. Community property, tenants by the entirety and joint tenancy, with or without right of survivorship, are all treated differently in different states.

Estate taxes also differ from state to state. While federal estate tax only applies to decedents with estates valued at more than $23.4 million (for 2021), state estate taxes, inheritance taxes and gift taxes are imposed at lower levels. Most states do not impose estate taxes on transfers to a surviving spouse, but you’ll want to know what the future will bring beforehand.

An estate planning attorney in your new home state will help you navigate the difference between your old estate plan and the one that will work in your new state.

Reference: CNBC (Dec. 14, 2020) “Moving to a new state? If so, make sure those estate plans have been updated”

It’s Time to Stop Procrastinating and Have Your Estate Plan Done

While many people have had their wills updated or created in response to the pandemic, millions of Americans have yet to do so, reports the article “How to Stop Stalling On Getting a Will and Estate Plan” from AARP Magazine. The main reasons for the big stall? They haven’t “gotten around to it,” or, they think they don’t have enough assets to leave to anyone and don’t need a will. Neither reason is valid.

Estate Plans Protect Us During Life. A will is a legal document used to distribute assets after death. It saves families from unnecessary costs and stresses resulting from intestacy, which is what having no will is called. However, there are more documents to an estate plan than just a will. One is a health care directive, often called a living will. This document names someone of your choosing to make medical decisions for you if you are unable. It is also used to outline the kind of medical treatments you do or do not want.

Imagine your family faced with making the decision of keeping you on a heart and lung machine or pulling the plug and letting you die. Would they know what you want them to do? Without a living will, they have to make a decision, and hope it’s the one you would have wanted. That’s quite a burden to put on your loved ones, especially since there is a simple way for you to convey your wishes in a legally enforceable manner.

You also Need a Power of Attorney. A financial power of attorney appoints a person of your choosing to make financial and legal decisions on your behalf, if you are incapacitated. This is an important document and can be created to be as broad or as narrow as you want. You can provide the direction for someone—a trusted, responsible adult—to manage finances, including paying bills, managing a portfolio, paying a mortgage and generally taking over the business of your life. Without it, your family will need to go to court to obtain a guardianship and/or conservatorship to take care of these matters.

Estate Planning Requires Hard Conversations. When people say they “haven’t gotten around” to doing their wills, what they are really thinking is “This is too unpleasant a topic for me” or “I can’t bring myself to have this conversation with my children.” Death and sickness are uncomfortable topics, and most people find it painful to discuss them with their spouses and their children.

However, imagine the great relief you will feel when your loved ones know what your wishes are for sickness and death. You can also imagine the relief they will have in knowing that you took the time give them the tools needed to deal with whatever the future will bring.

Joint Wills are Never a Good Idea. A joint will can leave a surviving spouse in a terrible legal and financial situation. They are not even valid in certain states. They can restrict a surviving spouse from changing the instructions of the will, which could create all kinds of hardships. Circumstances change, and a joint will won’t allow for that. Most couples opt for a “Mirror” will, where they leave the estate to each other and/or their children.

Blended Families Need Special Treatment. If your family is made up of children from different parents, it is important to understand that stepchildren are not treated the same as children by the law. You may love your stepchildren as if they were your own, but unless you specifically name them in the will, they will not be included. Your estate planning attorney will know how to address this issue.

A few final thoughts: estate planning laws of each state are different, so you should meet with an estate planning attorney who practices in your state. The Power of Attorney and Health Care Directives should name the people who you feel will carry out your wishes and can be trusted to do as you want. The person does not have to be the oldest male child. They don’t even have to be related to you, as long as the person you choose is trustworthy, responsible and good with managing money and details.

Reference: AARP Magazine (Nov. 12, 2020) “How to Stop Stalling On Getting a Will and Estate Plan”

Good Planning for Life Is Also Good Planning for a Pandemic

The fear of the unknown and a sense of loss of control is sending many people to estate planning attorney’s offices to have wills, advance directives and other documents prepared, reports the article “Legal lessons from a pandemic: What you can plan for” from The Press-Enterprise.

However, people are not just planning because they are worried about becoming incapacitated or dying because of COVID. High net-worth people are also planning because they are concerned about the changes the election may bring, changes to what are now historically advantageous estate tax laws and planning to take advantage of tax laws, as they stand pre-December 31, 2020.

Regardless of your income or assets, it is always good to take control of your future and protect yourself and your family, by having an up-to-date estate plan in place. Anyone who is over age 18 needs the following:

• Health Care Directive
• Power of Attorney
• HIPPA Release Form
• Last Will and Testament

Any assets without beneficiary designations should be considered for a trust, depending upon your overall estate. Trusts can be used to take assets out of a taxable estate, establish control over how the assets are distributed and to avoid probate. You don’t have to be wealthy to benefit from the use of trusts.

Preparing estate planning documents in a last-minute rush, is always a terrible idea.

If you have more free time during the pandemic, consider using some of your free time to have your estate plan implemented or updated. This should be a top priority. The state of the world right now has all of us thinking more about our mortality, our values and the legacy we want to leave behind. Most estate planning attorneys encourage clients to think about the next three to five years. What would be important to you, if something were to happen in that time frame?

Estate planning is about more than distributing assets upon death. It addresses incapacity—what would happen if you became too ill or injured to care for yourself? Who would make medical decisions for you, such as what kind of medical care would you want, who will your doctors be and where will you live in the short-term and long-term? Incapacity planning is a big part of an estate plan.

When naming people to care for you in the event of incapacity, provide your estate planning attorney with three names, in case your first or second choices are not able to act on your behalf. Most people name their spouse, but what if you were both in an accident and could not help each other?

In recent months, Advance Health Care Directives have received a lot of attention, but they are not just about ventilator use and intubation. An Advance Health Care Directive is used to state your preferences concerning life-sustaining treatment, pain relief and organ donation. The agent named in your health care directive is also the person who will carry out post-death wishes, so provide as many details as you can about your wishes for cremation, burial, religious services, etc.

Trusts are a way to preserve a family legacy. A living trust gives you the ability to decide who you want involved, in case of your death or incapacity. You decide on your beneficiaries, and if you want your assets going directly to those beneficiaries or if they should be held in trust until certain goals are met, like finishing college or reaching a certain age or life milestone.

Your estate planning attorney will help you clarify family legacy goals, whether they include a beneficiary with special needs, a supplement for children who go into public service careers, etc.

Reference: The Press-Enterprise (Oct. 18, 2020) “Legal lessons from a pandemic: What you can plan for”

Caring for a Loved One from a Distance

Trying to coordinate care from a distance becomes a challenge for many, especially since as many as 80% of caregivers are working. Add COVID-19 into the mix, and the situation becomes even more difficult, reports the article “When your parent is far away and you are trying to care for them” from the Pittsburgh Post-Gazette.

The starting point is to have the person you are caring for give you legal authorization to act on their behalf with a Power of Attorney for financial affairs and a Health Care Directive that gives you authority to receive health information under HIPAA (Health Insurance Portability and Accountability Act). It is HIPAA that addresses the use, disclosure and protection of sensitive patient information.

Next, have a conversation about their finances. Find out where all of their important documents are, including insurance policies (long-term care, health, life, auto, home), Social Security and Medicare cards. You’ll want to know where their tax documents are, which will provide you with information on retirement accounts, bank accounts and investments.

Gather up family documents, including birth, death, and marriage certificates. Make sure your loved one has completed their estate planning, including a last will and testament.

Put all of this information into a binder, so you have access to it easily.

Because you are far from your loved one, you may want to set up a care plan. What kind of care do they have in place right now, and what do you anticipate they may need in the near future? There should also be a contingency plan for emergencies, which seem to occur when they are least expected.

Find a geriatric care manager or a social worker who can do a needs assessment and help coordinate services, including shopping for groceries, medication administration and help with basic activities of daily living, including bathing, toileting, getting in and out of bed, eating and dressing.

If possible, develop a list of neighbors, friends or fellow worshippers who might create a local support system. If you are not able to visit with any degree of frequency, find a way to see your loved ones on a regular basis through video calls. It is impossible to accurately assess a person’s well-being, without being able to see them. In the past, dramatic changes weren’t revealed until family members made a trip. Today, you’ll be able to see your loved one using technology.

You may need to purchase a smartphone or a tablet, but it will be worth the investment. A medical alert system will provide further peace of mind for all concerned. Regular conference calls with caregivers and your loved one will keep everyone in touch.

Caring from a distance is difficult, but a well-thought out plan and preparing for all situations will make your loved one safer.

Reference: Pittsburgh Post-Gazette (Sep. 28, 2020) “When your parent is far away and you are trying to care for them”

You Need More than a Will for Estate Planning

As the coronavirus continues to sweep across through the U.S. and the death tolls continue to rise, many people are starting to put their estate plans in place, as reported by CNBC.com in the article “A will doesn’t cover all your bases when it comes to end-of-life decisions. Here’s what else you need.”

It’s true–your will, or last will and testament, is just one of several legal documents you need to help loved ones know what your wishes are. If there is no will, all kinds of problems are created. If you have minor children and no will, the court will decide who will care for them. With no will, the laws of your state determine who will receive your assets—even if it’s a relative you’ve never met—or one you’ve loathed for decades.

For those who have partners but are not married, no will means your assets won’t go to them. They also won’t have legal standing to fight back. The courts typically pass assets on to your closest blood relatives. That might not be what you want.

However, a will is only one part of your entire estate plan. You don’t need to live on “an estate” to have an estate. Actually, your estate refers to everything you own—financial accounts, possessions, real estate and digital assets. Putting a plan in place for those assets helps lessen the chances your family will fracture when you have died. Your assets will also go where you want them. It’s a kindness to your loved ones.

A will lets you convey your wishes about who gets what when you die, except for assets that pass outside of a will. These are accounts where you have named a beneficiary, like insurance policies, retirement accounts and jointly owned property. The beneficiary designations and joint ownership (with rights of survivorship) always supersede your will, which is where many people make big mistakes. If you don’t update your beneficiary designations as you move through life, the wrong person might inherit significant assets. There also won’t be anything your intended heirs can do about it.

Another big part of your will involves choosing a person to be in charge of carrying out your intentions—the executor. This is a job that requires someone who is responsible, reliable and comfortable with handling financial and legal matters.

You’ll also need a health care directive, sometimes called a living will, to outline your wishes, if you become incapacitated because of illness or injury. This gives loved ones the instructions they need if, for example, you are on life support and a decision has to be made about whether to continue or to let you pass. Don’t forget a Power of Attorney. This document allows a person of your choice to carry out all of your financial and legal affairs on your behalf. You want to pick someone who is smart and trustworthy. They might need to do everything from selling your home to managing your investments.

Estate planning also includes preparing all of the important documents in your life, so that your executor can find them easily, including your will itself, other legal documents, information about bank accounts, investment accounts and even your Social Security number. The more organized you can be, the more easily your loved ones will be able to administer your estate.

If you want your children to receive money from you but are concerned about their ability to manage an inheritance, you may want to add a trust to your estate plan. Your assets go into the trust, instead of directly into their hands. You also name a trustee who will oversee the trust. The trustee will decide when your children receive the money, according to your instructions. The distribution could be tied to achieving certain goals—like graduating from college or getting their first apartment.

One last point: many people today are downloading estate planning forms from the internet. The problem is, you don’t know if they are up-to-date, or even admissible in your state. Every state has its own estate laws, and no one document works in all states. Working with an estate planning attorney who knows the laws in your state eliminates the risk that a judge will toss out your will, because it does not comply with state law.

Reference: CNBC.com (July 27, 2020) “A will doesn’t cover all your bases when it comes to end-of-life decisions. Here’s what else you need.”

A Non-Medical Check Up – For Your Estate Plan

An estate plan isn’t just for you—it’s for those you love. It should include a will and possibly, trusts, a power of attorney for financial affairs and a health care directive. As many as 60% of all Americans don’t have a will. However, the COVID-19 crisis has highlighted for everyone the need to have those documents. For those who have an estate plan, the need for a tune-up has become very clear, says the article “Time for a non-medical checkup? Review your will” from the Pittsburgh Post-Gazette.

With any significant change in your life, a review of your estate plan is in order. Keep in mind that none of your estate planning documents are written in stone. They should be changed when your life does. COVID-19 has also changed many of our lives. Let’s take a look at how.

Has anyone you named as a beneficiary died, or become estranged from you? Will everyone who is a beneficiary in your current estate plan still receive what you had wanted them to receive? Are there new people in your life, family members or otherwise, with whom you want to share your legacy?

The same applies to the person you selected as your executor. As you have aged over the years, so have they. Are they still alive? Are they still geographically available to serve as an executor? Do they still want to take on the responsibilities that come with this role? Family members or trusted friends move, marry, or make other changes in their lives that could cause you to change your mind about their role.

Over time, you may want to change your wishes for your children, or other beneficiaries. Maybe ten years ago you wanted to give everyone an equal share of an inheritance, but perhaps circumstances have changed. Maybe one child has had career success and is a high-income earner, while another child is working for a non-profit and barely getting by. Do you want to give them the same share?

Here’s another thought—if your children have become young adults (in the wink of an eye!), do you want them to receive a large inheritance when they are young adults, or would you want to have some control over when they inherit? Some people stagger inheritances through the use of trusts, and let their children receive significant funds, when they reach certain ages, accomplishments or milestones.

Have you or your children been divorced, since your estate plan was last reviewed? In that case, you really need to get that appointment with an estate planning attorney! Do you want your prior spouse to have the same inheritance you did when you were happily married? If your children are married to people you aren’t sure about, or if they are divorced, do you want to use estate planning to protect their inheritance? That is another function of estate planning.

Taking out your estate plan and reviewing it is always a good idea. There may be no need for any changes—or you may need to do a major overhaul. Either way, it is better to know what needs to be done and take care of it, especially during a times like the one we are experiencing right now.

Reference: Pittsburgh Post-Gazette (July 27, 2020) “Time for a non-medical checkup? Review your will”

If Not Now, When? It is the Time for Estate Planning

What else could possibly go wrong? You might not want to ask that question, given recent events. A global pandemic, markets in what feels like free fall, schools closed for an extended period of time—these are just a few of the challenges facing our communities, our nation and our world. The time is now, in other words, to be sure that everyone has their estate planning completed, advises Kiplinger in the article “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

Business owners from large and small sized companies are contacting estate planning attorney’s offices to get their plans done. People who have delayed having their estate plans done or never finalized their plans are now getting their affairs in order. What would happen if multiple family members got sick, and a family business was left unprotected?

Because the virus is recognized as being especially dangerous for people who are over age 60 or have underlying medical issues, which includes many business owners and CEOs, the question of “What if I get it?” needs to be addressed. Not having a succession plan or an estate plan, could lead to havoc for the company and the family.

Establishing a Power of Attorney is a key part of the estate plan, in case key decision makers are incapacitated, or if the head of the household can’t take care of paying bills, taxes or taking care of family or business matters. For that, you need a Durable Power of Attorney.

Another document needed now, more than ever: is an Advance Health Care Directive. This explains how you want medical decisions to be made, if you are too sick to make these decisions on your own behalf. It tells your health care team and family members what kind of care you want, what kind of care you don’t want and who should make these decisions for you.

This is especially important for people who are living together without the legal protection that being married provides. While some states may recognize registered domestic partners, in other states, medical personnel will not permit someone who is not legally married to another person to be involved in their health care decisions.

Personal information that lives only online is also at risk. Most bills today don’t arrive in the mail, but in your email inbox. What happens if the person who pays the bill is in a hospital, on a ventilator? Just as you make sure that your spouse or children know where your estate plan documents are, they also need to know who your estate planning attorney is, where your insurance policies, financial records and legal documents are and your contact list of key friends and family members.

Right now, estate planning attorneys are talking with clients about a “Plan C”—a plan for what would happen if heirs, beneficiaries and contingent beneficiaries are wiped out. They are adding language that states which beneficiaries or charities should receive their assets, if all of the people named in the estate plan have died. This is to maintain control over the distribution of assets, even in a worst-case scenario, rather than having assets pass via the rules of intestate succession. Without a Plan C, an entire estate could go to a distant relative, regardless of whether you wanted that to happen.

Reference: Kiplinger (March 16, 2020) “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

Do You Need a Revocable Trust?

A will lets you determine how your property will be distributed when you die, and a revocable living trust also accomplishes that task. However, the owner of the trust can make strict stipulations about how specific assets should be distributed, says Barron’s in the article “Revocable Living Trusts Can Help Your Heirs Avoid Probate. Here’s How They Work.” Another advantage of a revocable trust—avoiding probate, which gives the trust owner far more control over asset distribution.

Remember, probate is a process that takes place under the supervision of a judge in a court. Things don’t always happen the way the decedent may have wanted.

It’s best for individuals or couples with complex estate planning needs to meet with an estate planning lawyer, who will discuss whether a living trust is the right option. One question couples should ask: does it make sense for them to have a living will, and should it be a joint trust, or should it be two separate ones?

When a trust is created, it needs to be funded. Assets such as real estate, bank accounts, taxable non-retirement investment accounts all need to be retitled so they are owned by the trust. The person who creates the trust has no restrictions as to how the assets within the trust are used while they are alive. The trust can also be revoked during the owner’s lifetime, but it’s more common for owners to make tweaks to the trust.

Trusts are very popular in states like California and Massachusetts, which have more restrictive probate laws than other states. Trusts are very good for people who own property in multiple states and would otherwise have to deal with probate in multiple states. Trusts are also excellent for people who wish to maintain privacy about their assets, since the trust’s contents remain private. A will, once it enters the probate process, becomes a public document.

Someone who does not own his or her own home and has limited assets may prefer to use a will, which is less expensive and simpler than a trust. Once they do own a home and have more extensive assets, they can always have a trust created.

A living trust is part of a larger estate plan. Other estate planning documents are still needed, including a durable power of attorney for finances, an advance health care directive, a nomination of guardianship for families with minor children and a living will.

People who have revocable trusts should ask their estate planning attorney about something called a “pour-over” will. This is a will that ensures that any assets accidentally left out of the trust are added to the trust after the death of the owner. If the majority of assets are in the trust, the probate of the pour-over will should be much simpler and there may even be a “fast-track” option for assets under a certain dollar level.

Reference: Barron’s (February 22, 2020) “Revocable Living Trusts Can Help Your Heirs Avoid Probate. Here’s How They Work”

Do Unmarried Couples Need Estate Planning?

A couple that has no intention of ever getting married should know that they won’t get the automatic rights and protections that legally wed spouses get, particularly when it comes to death. Therefore, unmarried couples must make a concerted effort to cover all the bases, says CNBC’s recent article entitled “Here’s what happens to your partner if you’re not married and you die.”

The number of unmarried couples who live together reached 18 million in 2016, a 29% increase from 14 million in 2007, according to the Pew Research Center. Among adults age 50 and older, the increase was 75% with roughly 4 million cohabiting in 2016, compared to 2.3 million in 2007.

These couples still face some key differences from their married counterparts. For example, there’s no filing federal taxes as a couple, and if an employer allows health insurance for a partner, the amount the company contributes is taxable to the employee, rather than being tax-free for a spouse.

End-of-life considerations also need attention. Unmarried couples can sign some legal documents that will dictate what happens, if one of them either becomes incapacitated or passes away, which is a type of estate plan.

If you die without a will or intestate, the state probate court will decide how your assets are distributed. A will by itself also won’t address everything. If you want to make sure your tax-advantaged retirement accounts — like your Roth IRA and 401(k) plans — go to your partner, make sure that individual is the designated beneficiary on those accounts. Even if your will says otherwise, whoever’s listed as the beneficiaries on those accounts will get the money. It’s the same for insurance policies and annuities.

If both partner’s names are on checking, savings or investment accounts, the account will pass directly to the surviving partner. However, for an account with only one partner’s name on it, ask the bank about the appropriate form to be completed, so the money is left directly to the surviving partner. This is what’s called a transfer-on-death or payable-on-death designation. Without this designation, the assets will end up in probate and distributed either in accordance with the will or intestacy state laws.

Regardless of how the mortgage is paid or whose name is on the loan, the person named on the deed is the owner. If the house in one partner’s name, it won’t automatically pass to the partner, as it would with a married couple (via joint tenancy with rights of survivorship). It would become part of the probate estate. To remedy this, you can retitle the home, so that both partners are listed as joint owners on the deed, “with rights of survivorship.” Each partner then equally owns the house and is entitled to assume full ownership upon the death of the other. Note that there could be other factors to consider before adding a partner’s name to an existing deed, such as expenses, tax implications and protection from potential creditors. Ask your estate planning or probate attorney before you make a change. A partner owning the house, could leave it to the surviving partner in the will. Remember, though, any asset passing via the will is subject to probate, which may lead to unforeseen issues.

In addition, a partner has no legal say in his or her partner’s medical treatment, if he or she is in a situation where they can’t make decisions for themselves. To give the partner that right, partners can grant each other a durable power of attorney over health care. This allows the partner to make important health-care decisions, if the one in the hospital is unable to do so. This is different from a living will, which states a person’s wishes if they are on life support or suffer from a terminal condition. This document helps guide the agent’s decision-making. If no one is named, medical personnel must follow the instructions in that document.

Likewise, partners may want to give each other durable power of attorney for finances. This would let them handle one another’s money, including accessing accounts as necessary, if the incapacitated partner could not do so.  If the partners have dependents, name a guardian for them in the will. Otherwise, that decision will be left to the courts.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”