Paul O. Dillon, Attorney at Law

Beneficiary Designations Need to Be Updated

This case illustrates why updating beneficiary designation is essential, and while it takes place in New Jersey, it applies to any person in any state. The National Law Review article, “Estate of Michael Jones: A Reminder to Keep Designations of Non-Probate Assets Consistent with Your Testamentary Intentions,” presents a strong case for annual updates.

Michael D. Jones and his spouse were separated for several years and eventually divorced. Their divorce agreement called for Mr. Jones to pay his former spouse $200,000 in installments of $50,000 per year. If he died before his former spouse, his estate was to compensate her for the remainder of the balance.

When Mr. Jones died, he had only paid her $110,000. She filed a creditor’s claim against the estate, seeking the remaining balance. The estate opposed her claim, saying she had already received more than $77,000 through the decedent’s federal bonds, designating the spouse as the POD (payable on death) beneficiary.

The case went to court, where the trial court found the POD designation was presumptively revoked based on a law providing that a divorce automatically revokes a disposition of property to a former spouse in a governing instrument.

She appealed the decision and won.

The appellate court said the bond was subject to federal regulation, which had specific procedures for revising the beneficiary of a federal bond. Case law from around the country supported this decision, noting federal regulations preempt state laws that conflict with them.

The appellate court found in her favor, and the bond proceeds belonged to the former spouse and passed outside of the estate. They were not considered part of the payout required under the divorce settlement agreement. They belonged to her.

This decision should be a wake-up call to anyone with assets they expect to pass outside of their estate, including federal bonds, insurance policies, IRAs, 401(k)s, pensions, bank accounts with beneficiaries, or any account with a payable on death designation.

An annual review of beneficiary designations should occur while you and your estate planning attorney review your estate plan. It’s a simple task. However, it can significantly affect how your assets will be distributed if overlooked.

Reference: The National Law Review (Dec. 7, 2023) “Estate of Michael Jones: A Reminder to Keep Designations of Non-Probate Assets Consistent with Your Testamentary Intentions”

Top Tips for Estate Planning

Social media and in-person conferences are filled with “hacks” to improve lifestyles, finances and everything you can imagine. Taking a page from the world of “life hacks,” this article from Kiplinger, “14 Rapid-Fire Estate Planning Tips,” presents short and impactful info on estate planning.

Tip 1—Consider using a professional trustee in your estate plan for a more effective estate plan and more efficient administration.

Tip 2—For business owners, make sure that your estate planning attorney, CPA and financial advisors all understand your business. Invite them to your office or factory, so they can see how production or business practices are handled and the role of key employees, especially family members.

Tip 3—Discuss Transfer on Death (TOD) and Payable on Death (POD) options to see if they might be useful or detrimental to your estate plan. Many banks are pushing these arrangements, but they are not for everyone.

Tip 4—If you own a closely held company, have your estate planning attorney review any buy-sell provisions in the shareholder and operating agreements. Were these terms coordinated with the liquidity available to your trust or estate?

Tip 5—Do your trust documents include provisions regarding substance abuse powers and protections for beneficiaries? Give the trustee the power to deal with any substance abuse issues, including the power to pay costs directly to vendors and not directly to the beneficiary, require testing and treatment programs and pay for them with trust funds, and withhold mandatory distributions until the beneficiary meets certain testing and treatment standards.

Tip 6—Use an active voice in all forms, communications and agreements. Avoid ambiguity and provide clarity by using the active voice to identify the person who is or will exercise power or duty.

Tip 7—Be careful with personal information and documents. Your estate planning attorney and all other advisors should use encryption to protect emailed documents. Multifactor authentication should be used on any remote access. Don’t open attachments from anyone you don’t know or click on a link in an email from someone you think you know. Pick up the phone and call advisors before opening the email or link.

Tip 8—Ask your estate planning attorney to review the trust’s express standards of care, so you understand the duties and liabilities of the trustee. When a trust states a trust advisor is not a fiduciary and is not liable for actions taken in good faith, then any actions must be in good faith. This is a standard of care, and they are liable for actions taken in bad faith.

Tip 9—Ask your estate planning attorney about having your trust absolve successor trustees of all prior acts of the predecessor trustee. When a trustee is named successor trustee, they will look for this language absolving them of the predecessor trustee’s prior acts of omission or commission. If there’s no such provision in the document, the successor trustee will want all qualified beneficiaries to sign a release and indemnification.

Tip 10—Don’t rely on your memory regarding gift and estate tax returns filed in the past or your past use of lifetime estate tax exemptions, annual exclusion gifts, withdrawal notices and Generation-Skipping Transfer Tax (GSTT) allocations. Locate copies of these documents in your records to ensure that they match. Document your file with any notes or communications about gifting. As a taxpayer, you and your estate are responsible for maintaining records and have the burden of proof in any tax matters.

Tip 11—Anytime you review or update your estate plan, take the time to review any beneficiary designations immediately. Existing deeds, titles, account details and beneficiary designations should all be up to date, as your new estate plan may be ineffective at best (and, at worst, worthless) if those forms are not completed and updated.

Tip 12—If you are a beneficiary, you are allowed to review trust administration and ask questions of the trust officer. You are entitled to know how often you will receive statements or annual accounting, the standards the trustee must follow for making distributions and whether or not you have any control over the use of trust benefits during your lifetime or upon your death.

Tip 13—When updating your estate, ask your estate planning attorney about drafting trust restatements and new wills rather than trust amendments and codicils. Modern word processing makes it just as easy to prepare complete restatements rather than multiple amendments.

Tip 14—If you file personal tax returns and fiduciary tax returns for trusts, it may make sense to use the same accounting firm for both.

Reference: Kiplinger (Nov. 8, 2023) “14 Rapid-Fire Estate Planning Tips”

Does Estate Administration Need to Be Supervised?

Probate is the legal process where the court approves the will and the executor so the estate may be distributed after a person dies. Probate is a familiar term to many, but supervised or unsupervised administration is less well known. The article “Estate Planning: Supervised and unsupervised probate administrations” from nwi.com explains how estate administration works.

Generally speaking, there are two different types of probate administration, as inferred by the article’s title: supervised and unsupervised. Depending on who you ask, there may also be a third, known as “informal probate.”

Not all assets are passed through probate. Bank accounts owned jointly pass directly to the other owner. A home owned with a Transfer on Death (TOD) deed is also considered a non-probate asset. This is not to say that non-probate assets cannot be brought into probate. There are instances where they can. However, it takes a bit of an effort and is pretty unlikely to occur.

Probate assets are assets with no surviving joint owner and no beneficiary designation. These types of assets require a proceeding to ensure that the correct person or entity receives it after the original owner dies.

A supervised probate administration requires extensive court involvement. Every action taken by the executor has to be approved. If the home is to be sold or a distribution made to beneficiaries, the executor has to obtain a court order authorizing it.

An unsupervised probate administration, just as it sounds, involves far less court involvement. The personal representative or executor is recognized as valid, creates an inventory of the assets and files the inventory with the court. Once the inventory is reviewed, the executor is told to administer the distribution of assets according to the terms of the will.

Beneficiaries have 90 days to object to the executor’s actions. although this may vary by state. Check with your estate planning attorney. If no one objects, the final account is approved and the executor is done.

With less court involvement, asset distribution proceeds at a faster rate, which is why many wills provide for it.

The “informal probate” mentioned earlier is an outlier. Its use varies by state and by jurisdiction. There’s no court involvement at all. This is mostly used for very, very small estates. Some argue it’s still probate, even if it’s informal, while others maintain it exists solely to avoid probate.

The nature of probate depends on many factors, including where the decedent lives, the size and complexity of the estate and whether or not there are many family members or others who might challenge the estate’s distribution. In some communities, probate is a quick and painless process. In others, it is long, expensive and stressful. Your estate planning attorney will know what your situation will be and help you and your family plan accordingly.

Reference: nwi.com (April 10, 2022) “Estate Planning: Supervised and unsupervised probate administrations”

Is It Better to Inherit Stock or Cash?

To make an inheritance even more advantageous for heirs, it’s a good idea to streamline accounts and simplify what you own before you die, eliminating some complications during a very emotional time. The next three decades will see a massive transfer of wealth from one generation to the next, says a recent article “6 of the Best Assets to Inherit” from Kiplinger. If you might be among those leaving inheritances to loved ones, there are steps you can take to prevent emotional and even family-destroying fights resulting from problematic assets.

Cash is king of inheritance assets. It’s simplest to deal with and the value is crystal clear. If you have accounts in multiple financial institutions, consolidate cash into one account. Each bank may have different rules for distributing assets, so reducing the number of banks involved will make it easier. Just remember to stay within FDIC limits, which insures only $250,000 per bank per ownership category. Tell your children if they are going to receive a significant cash inheritance and discuss what they may want to do with it.

Cash substitutes. Proceeds from a life insurance policy are usually very cut and dried. When you pass away, the life insurance company pays beneficiaries the death benefit in cash, according to the beneficiaries named on the policy. Be sure to tell your heirs where the original policy is located. They’ll need to provide the insurance company with a death certificate and there may be a form or two involved. The proceeds are income tax free, although the death benefit itself is added to the value of your estate and might be charged estate taxes.

Bank products, like CDs and Money Market Accounts. You can set up these accounts to be Payable on Death (POD), so the person named can access the assets quickly after your death. Don’t put one person’s name on the account and hope they share with their siblings. That’s a recipe for family disaster. If your will has one set of instructions and the bank product names another owner, the bank will pay according to the titling of the account. The same goes for life insurance proceeds—the beneficiary designation supersedes instructions in a will.

Brokerage Accounts. Stocks, bonds, mutual funds and other assets held in a taxable brokerage account are easy to divide and value. They are also easy to sell and convert to cash. What’s more, they could give heirs a significant tax benefit. If you bought shares of Apple or IBM years ago and sold the stocks while you were living, you’d owe capital gains taxes. However, if the investments are inherited, the heir receives a step-up-in-basis, which means the investment basis goes to the market value on the day you die. It’s entirely possible for heirs to sell appreciated assets with no or little taxes due.

Assets that decrease in value fast: this is not for everyone. Let’s say you know your heir is going to take their inheritance and buy an over-the-top luxury item, like a new sports car or a yacht. You know the asset will lose value the minute it’s driven out of the showroom or launched for the first time. Rather than leave them cash to make a purchase, buy the car or boat yourself and leave it to them as an inherited asset. They lose value immediately, while reducing your taxable estate. You’ve always wanted a Lamborghini anyway.

Roth IRA—Best of All IRA Worlds. The Roth IRA is funded with after-tax dollars, and in exchange, retirement withdrawals and investment gains are income tax-free. If you leave a 401(k) or traditional IRA, heirs will owe taxes on withdrawals and unless they meet certain requirements, they have to empty the account within ten years.

Trust Fund Assets. This may be the best way to protect an inheritance from heirs. If you leave property outright to heirs, it’s subject to creditors and predators. Funds in a trust are carefully protected, according to the terms of the trust, which you determine. Your estate planning attorney can create the trust to achieve whatever you want. Inheritances in trusts are less likely to evaporate quickly and you get the final say in how assets are distributed.

Reference: Kiplinger (Dec. 9, 2021) “6 of the Best Assets to Inherit”

How Does a Will Work after Death?

A last will and testament, often referred to as simply a “will,” is the best known estate planning document. However, it’s also one of the most misunderstood, says an article titled “Most people don’t fully understand how wills work” from The News-Enterprise.

Don’t confuse a will with a Living Will. The Living Will concerns your wishes for end-of-life decision making, like whether you want to be kept alive by artificial means. A will is your declaration of how you want your property to be distributed after death.

Generally speaking, there are five main parts to a will. The first is a statement of your marital status and family relationships. It recognizes your natural heirs and states the relationship, even if they are not named later on as beneficiaries.

The second part of the will discussed how property is to be divided and distributed. This may include a list of beneficiaries and what percentage of the estate they are to receive. It may include instructions for distributions over a period of time, although a trust is usually used to control distribution. Personal items, including those of value, like jewelry, and those of sentimental value, like Mom’s favorite serving platter, can be listed in this section.

The third part names the people you have chosen to fulfill specific roles. That includes the executor, who is the person responsible for carrying out the instructions in the will. Always name a successor executor, in case the primary executor predeceases you or chooses not to serve. Some people are comfortable naming a tertiary executor, just in case.

The will includes information on the rights and duties of the executor, authorizing the executor to pay bills from the estate owed to creditors, final illness expenses and funeral expenses. Depending on your situation, it can also include information on whether the executor may acquire assets, sell real estate and personal property and make charitable gifts. Most executors file the last and final federal and state tax returns for the decedent.

If there are minor or disabled children, the will is used to name a guardian for them. If this detail is neglected, the court will appoint a guardian for minor or disabled children. It may not be the person you would have chosen. Over time, as your children grow and especially if their relationships with family members change, this should be updated. The same doting aunt who adored your three year old may not have the same relationship with the teenager she has now become.

Having a will means that property passes through probate, a court proceeding to make sure the will is valid and conforms to the laws of the state. Unless property has passed through a trust or a payable on death account, it goes through probate. The will is filed with the court, when it becomes part of the public record and may be read by anyone who wants to see its contents.

A will provides no protection from creditors. The will only becomes effective after death, so it only applies to whatever property is available after the person has died. By law, debts must be paid before beneficiaries receive property.

Reference: The News-Enterprise (Nov. 9, 2021) “Most people don’t fully understand how wills work”

Do a Married Couple without Children Need a Will?

While estate planning for couples with no children seems like it would be very simple, the opposite is almost always the case, according to this informative article titled “Three keys to estate planning for couples without children” from The News-Enterprise.

If there’s no last will, intestate succession laws dictate who will receive property.

There are three relatively simple ways for couples to be sure their wishes will be followed, and property distributed as they want.

A secondary level of beneficiaries. Couples don’t always die at the same time, although it does happen. For the most part, upon one spouse’s death, assets owned together, including Payable on Death, or POD accounts, remain in the possession of the surviving spouse. If all of the assets are owned jointly, the surviving spouse may be able to avoid probate altogether. However, they should check with an estate planning attorney to be sure their state will accept this.

There should be provisions in the last will, in case of a simultaneous death. This lets the more important provisions focus on the beneficiaries. While property may pass easily outside of probate to the survivor, the same will not be true if property is to pass to beneficiaries. The estate will go through probate.

If at all possible, couples should have the same designated beneficiaries. If the couple intends to leave everything to the surviving spouse, they will need to decide who will receive joint property after both have died.

Last wills for each spouse must be created to work together. Designating separate lists of beneficiaries in each spouse’s last will and testament ultimately results in the marital property being left only to one spouse’s loved ones. The result: the other spouse’s family can end up being disinherited.

One way to address this is to create marital shares of property. Couples generally divide marital property in equal shares, although couples in blended families may choose to use a different fractional share.

For each fractional share, each spouse should write out their own list of beneficiaries, being sure that the total ends up being 100%.

Another point to be determined: will survivors within the group receive a larger share pro rata, or will children of the deceased beneficiaries receive their shares? This needs to be clarified when the estate plan is created to avoid potential problems for beneficiaries.

Beneficiaries could potentially be changed after the death of the first spouse, so if the couple wants to prevent anyone from being disinherited, they can use a revocable living trust. This can lock up the deceased spouse’s shares in a manner to allow the property to remain available for the survivor, but the survivor cannot change beneficiaries for the deceased spouse’s share.

Estate planning for couples with no children can have its own pitfalls, so consult with an experienced estate planning attorney, who will know how to protect all members of the family.

Reference: The News-Enterprise (July 27, 2021) “Three keys to estate planning for couples without children”

Does a Beneficiary on a Bank Account Override a Will?

You’ve named beneficiaries to accounts many times already, when you opened an IRA, bought an insurance annuity, a life insurance policy, started an investment account, signed up for a pension or bought shares in a mutual fund. These are the accounts that come to mind when people think about beneficiary designations. However, according to a recent article in Forbes titled “Do You Need a Beneficiary for Your Bank Account?,” they are not the only financial instruments with beneficiary designations.

When you open a bank account, most retail banks don’t ask you to name a beneficiary, but it’s not because you can’t. If the bank allows beneficiaries on their accounts, it’s usually a pretty simple process. In most cases, you’ll be asked to fill out a form or go through the bank’s process online.

Banks don’t push for beneficiary accounts because they are not required to do so. However, this is a smart move and can be a helpful part of your estate plan. The biggest benefit: funds in the account will be distributed directly to the beneficiary upon your death. They won’t have to go through probate and won’t be part of your estate. Otherwise, whatever assets you keep in your bank accounts will be counted as part of your estate and subject to probate.

Probate is a court process to validate the will and the named executor, supervising the distribution of assets from your estate. In some cases, it can be complicated, take months to complete and depending on the size of your estate, be expensive. If the money in your bank accounts does not go to a beneficiary, it can be used to pay off estate debts instead of going straight to a beneficiary.

For married people, bank account funds are treated differently. Half of the balance goes to your spouse upon death, the rest goes through probate.

Naming a beneficiary is a better alternative. The beneficiary may collect the money immediately. They’ll need to go to the bank with an original or certified copy of a death certificate, required identification (usually a driver’s license) and the money is transferred to them.

If you are married and don’t live in a community property estate, a surviving spouse may be able to dispute the terms of a beneficiary arrangement, but that will take time.

Another means of transferring assets in a bank account is to change your accounts to POD, or Payable On Death accounts. There are other names: In Trust For (ITF), Totten Trust or Transfer on Death (TOD). The named beneficiary is referred to as the POD beneficiary.

There is considerable flexibility when naming a POD beneficiary. It may be a living person, or it can be an organization, including a nonprofit charity or other trusts. You are not allowed to name a non-living legal entity, like a corporation, limited liability company (LLC) or partnership.

Beneficiary designations override wills, so if you forget to change them, the person named will still receive the money, even if that was not your intent. You should review beneficiaries for all of your accounts every year or so. Divorce, death, marriages, births and any other lifetime events are also reasons to check on beneficiary designations.

Reference: Forbes (July 9, 2021) “Do You Need a Beneficiary for Your Bank Account?”

What Should Not Be Included in Will?

A last will and testament is the basic document of an estate plan, which is how you direct assets according to your wishes after you have died. However, there are certain things that do not belong in a will, and it’s important to know what they are. Mistakes can lead to expensive and worrisome complications, says the article “Things you should never put in your will” from msn.com.

Your will can get very specific about who receives what in the way of your personal possessions. For example, you can give your car to a family member of your choice. What you can’t do is tell the family member how they can use the car, or if she should never sell the car. Enforcing conditional wishes through a will isn’t legal, nor is it practical.

If you want to control aspects of an inheritance, the best way to this is through a trust, which allows you to set terms that are enforceable, even after you have died. A trust is a legal entity with a trustee and the law to enforce its terms. You can set goals or milestones for heirs best with a trust.

Leaving assets out of your will actually benefits family members in many regards. First, they’ll receive their inheritance faster. Upon death, your will must be reviewed and validated in a court of law in a process known as probate. Depending on your jurisdiction and the complexity of your estate, this can take months and, in some cases, years. Papers have to be filed, judges have to review your will and determinations must be made. Wills can also be contested in court, further tying up assets and slowing the process of distribution.

Putting property in a trust or having accounts that are Payable On Death (POD) will speed up the process for heirs.

Don’t put anything in a will that you don’t own outright. If you are a co-owner with someone, upon your death, the other owner will become the owner, with no need for court involvement.

Trusts are a key tool in estate planning, used to avoid probate and increase control of assets. Once property is titled into the trust, it becomes subject to the rules and directions of the trust, which are explained in detail in the trust documents. Nothing placed in a trust should be included in a will to avoid any confusion and delays.

Certain accounts and assets are payable or transferable on death. They are distributed directly to heirs, so putting them in a will is not necessary. These are accounts with beneficiary designations, typically brokerage or investment accounts, retirement accounts, pension plans and life insurance policies.

Business interests can be given through a will, but you don’t want to do this. Succession could be contested, and your business partners may be left with a big headache, instead of focusing on transitioning the business to the next generation of owners. Your estate planning attorney will be able to help create a succession plan that will align with your estate plan. The two need to work together.

Once deemed valid by the probate court, your last will and testament becomes a public document.  Anyone who wants to read it, can do so. Your will should not include any account numbers, account values, login information, passwords, or any information you would not want to be shared in public.

Reference: msn.com (July 11, 2021) “Things you should never put in your will”

How to Avoid Medicaid Estate Recovery

Medicaid is a government program that helps seniors and others pay for long term care. However, it’s not always free, explains the article “What Is Medicaid Estate Recovery?” from AOL.com. The Medicaid Estate Recovery Program (MERP) is used by states to recover costs from estates with funds. The goal of Medicaid estate recovery is to make the program affordable for the government, but it can have a severe impact on the beneficiaries of Medicaid recipients. An estate planning elder law attorney should be contacted, if you believe you or a loved one may need Medicaid.

Seniors are eligible for Medicare when they turn 65. This program pays for many healthcare expenses, but not for long-term care in a nursing home. Medicaid is used when someone does not have long term care insurance or enough money to pay for long-term care out of pocket. Medicaid can also be used for long-term or nursing home care, if steps have been taken to protect assets. This usually includes strategies, like trusts and Medicaid Asset Protection Trusts (MAPT).

A federal law passed in 1993 (the Omnibus Budget Reconciliation Act) requires states to attempt to seek reimbursement from a Medicaid beneficiary’s estate after they have died. Some of the costs that the state will try to recover include:

• Nursing home costs
• Home and community-based services
• Medical services received through a hospital where the recipient is a long-term care patient
• Prescription drug services for long-term care recipient

The recovery program lets Medicaid pursue any eligible assets owned by the estate. While this depends upon where you live, any assets that are part of the probate estate could be attached, including:

• Bank accounts
• Your home or other real estate
• Vehicles or other real property

In addition, some states allow Medicaid to recover assets that are not subject to probate, including jointly held accounts, Payable-On-Death (POD) bank accounts, real estate owned in joint tenancy with right of survivorship, living trusts and any other assets that the Medicaid recipient had a legal interest in.

An estate planning elder care attorney in your state will know what types of assets your state tends to pursue and will help you understand what can and cannot be used for Medicaid benefit recovery.

Note that while Medicaid cannot take the primary residence while the recipient is still living, they can place a lien on the home. If the recipient passes away and a beneficiary inherits the home, they will not be able to sell the property until the lien has been satisfied.

For beneficiaries, Medicaid recovery means a smaller inheritance. However, that’s not the only thing to be mindful of. There are laws known as “filial responsibility laws” that allow healthcare providers to sue the children of long-term care recipients to recover nursing care costs. This is not commonly done as of this writing, but the costs of COVID may change this in the near future.

Strategic planning can help you or loved ones avoid the financial impact of Medicaid estate recovery. If you are eligible and can afford to buy a long-term care policy, that may help to cover most of the cost of care. Another option is to remove as many assets from the probate process as possible. An estate planning attorney will be able to help you create a plan to protect your assets.

Reference: AOL.com (February 5, 2021) “What Is Medicaid Estate Recovery?”

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”