Estate Planning for Unmarried Couples: P is for Planning, Not Palimony

Unmarried Couples’ Property Rights Differ State-to-State

What legally defines “marriage” in your state? What are the basic steps to estate planning for unmarried couples? In Kansas or Iowa, you can be legally married without a license. But you must meet the requirements of common law marriage, such as long-term cohabitation. Common law marriage is not valid in most states, and property rights for unmarried couples are virtually nonexistent. Therefore, you would protect your assets through estate planning in the form of a cohabitation agreement or will.

In my state of Illinois, unmarried cohabiting partners who break up have no rights in the property of the other. In other words, the law of property division and alimony, or support that applies to divorcing spouses, does not apply to unmarried couples who separate. Unmarried couples need to think through estate planning like a lawyer — possibly with the help of one.

Blumenthal v. Brewer

The Illinois case, Blumenthal v. Brewer, involved a county judge and a medical doctor. They lived together for 25 years, raised three children, and acquired three homes. They sued each other over the division of their primary home and the ownership of the doctor’s practice. In the end, the judge was told she had no right to any part of the doctor’s practice, even though she had invested money.

The case provides a timely reminder that the law confers certain advantages or qualities to married couples. This is also true in the arena of estate planning for unmarried couples. Consider the following:

• Under the ERISA labor law, a married person must name his/her spouse as a beneficiary of any qualified retirement plans.
• State laws across the country seek to stop a married person from disinheriting his or her spouse. There is a public policy against a person impoverishing his or her spouse at death. If I execute a will leaving all my property to my children, Illinois law provides that my husband nonetheless gets one-third of my property. In other states, this protection extends to all of a person’s property. It doesn’t matter whether it passes by will, corporate trust, beneficiary designation, joint ownership, or other means.
• A surviving spouse is often eligible for a spousal allowance or award. This part of the estate is paid to the surviving spouse for his or her support before creditors are paid.
• If a married person dies without a will, a surviving spouse will receive some share of the deceased spouse’s estate. In Illinois, this is one-half the estate if there are descendants or all of the estate if there are no children. In some states, the surviving spouse receives everything as long as any children are children of the marriage.
• Additionally,  if a married person dies without a will, the surviving spouse typically has the highest eligibility or priority to serve as administrator of the estate.
• If a married person cannot make medical decisions and hasn’t executed a power of attorney, the spouse typically has a high priority to act as a health care surrogate and make medical decisions.
• Similarly, if a married person becomes incapacitated and has not executed powers of attorney, the spouse will normally have high priority as the disabled spouse’s guardian of the person and estate.

Why Estate Planning for Unmarried Couples Is a Priority

None of these preferences necessarily extend to unmarried couples. Certainly, in Illinois, if an unmarried partner dies without a will, the surviving partner receives no portion of the estate. There will be no spousal allowance. The surviving partner has no priority to act as executor or administrator of the deceased spouse’s estate. If one partner has a child not adopted by the other, a court may or may not appoint the surviving partner as guardian.

If there is a disability, a person who legally has no relationship with the disabled partner may have low priority to make healthcare decisions and serve as guardian to protect the disabled partner.

Cohabitation is Common, Cohabitation Agreements – Less So

Cohabitation is increasingly considered a normal part of family life.

According to the US Census, in 2021, 17% of young adults age 25-34 live with an unmarried partner. That figure was 15% in 2018.  In 1968, only 0.2% of Americans of the same age lived with an unmarried partner. If cohabitation is the new normal, people in this demographic must protect their partners and families. They must seriously consider the process of estate planning for unmarried couples. So, how can romantic partners navigate the lack of property rights for unmarried couples?

Cohabitation agreements are legal contracts or implied agreements, which are much trickier. Between live-in partners, they establish the division or distribution of property. They address ongoing financial support, child custody, and visitation rights. They consider health care directives and other personal matters in the event of a breakup or death. In many cases, this includes a will and powers of attorney.

Look to Planning Your Estate Right Now

In happier times, the couple from the Blumenthal case could have participated in mutually beneficial estate planning. A partner could make a will naming his or her partner as beneficiary and as executor of the estate. Such a legal document could also nominate the partner as guardian of a child. The powers of attorney would name the partner to make medical and property decisions in the event of incapacity. A will and powers of attorney give unmarried partners protections the law automatically gives married people.

[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can listen to at your leisure and each includes a comprehensive customer PowerPoint about the topic):

• Estate Planning & Asset Protection in an Hour
• Webinar Series: Alternative Dispute Resolution 101
• Immigration Law 101

This is an updated version of an article originally published on September 4, 2019. It has been updated by Courtney Smith]

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