What legally defines marriage in your state? If you live in Kansas or Iowa, you can be legally married without a marriage license—as long as you meet the requirements of common law marriage, such as long-term cohabitation. But in most states, common law marriage is not valid, and property rights for unmarried couples are virtually nonexistent. In this case, estate planning in the form of a cohabitation agreement or will is necessary to protect your assets.
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 – and possibly with the help of one.
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 on married couples. This is true in the arena of estate planning. Consider the following:
None of these preferences necessarily extend to unmarried couples. Certainly, in Illinois, if an unmarried partner dies without a will, the surviving partner will not receive any portion of the deceased partner’s estate. There will be no spousal allowance, and the surviving partner has no priority to act as executor or administrator of the deceased spouse’s estate. If one partner has a child who has not been adopted by the other partner, a court may or may not appoint the surviving partner as guardian.
If there is a disability, a person who legally has no relationship to the disabled partner may have low priority to make healthcare decisions and to serve as guardian to protect the disabled partner.
Cohabitation is increasingly considered a normal part of family life.
According to the US Census, 15% of young adults aged 25-34 live with an unmarried partner. In 1968, only 0.2% of Americans of the same age were living with an unmarried partner. If cohabitation is the new normal, it is crucial for people in this demographic to protect their partners and families by preparing their own estate plans.
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 that establish the division or distribution of property, ongoing financial support, child custody and visitation rights, 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.
In happier times, the couple from the Blumenthal case could participate 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. Having a will and powers of attorney can confer on unmarried partners the protections and advantages that the law automatically gives to married people.
[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: The Legal & Tax Aspect of Investing: Asset Protection, Estate Planning and Tax Efficiency and Estate Planning & Asset Protection – 101. This is an updated version of an article that was originally published on October 20, 2016.]
Michelle Huhnke is a Partner at Sugar Felsenthal Grais & Hammer LLP. She focuses her practice on estate planning, charitable planning and wealth preservation.
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