You and your partner living in New York have many reasons for not getting married, but that doesn’t mean you are not committed to one another. Unmarried couples have special considerations when embarking upon estate planning, as what you do will have tax implications, along with who will speak for the other if incapacitation occurs.
Additional steps needed to manage your wishes
All couples, whether married or not, should draft the following essential estate planning documents to ensure their needs and wishes will be met:
• A last will and testament
• A living will with health care proxy for medical decisions
• A financial durable power of attorney
Most people know the importance of having a will, as it specifies wishes on how you want your property distributed. However, if you don’t designate an individual for healthcare or financial decisions, the courts may do it for you, and the person appointed may not necessarily be the one you wish to speak for you. With a healthcare proxy, you can specify what life-saving measure you do or do not want, plus indicate who makes the decision. This document also ensures that your significant other will have access to you in the hospital during critical situations. Unmarried couples usually have separate bank accounts, so if you can’t make financial decisions, your significant other has access to funds to pay your bills.
Establishing Essential Estate Documents
These documents are necessary for end-of-life matters and smooth estate administration after your passing. If you want to leave assets to your partner, you should carefully consider which will make the most sense from a family standpoint if you have children and for tax implications. For example, the federal government taxes retirement accounts differently when left to spouses than for unmarried partners.
Speaking with family members about your wishes is also wise. Explain what you’re doing and how you are doing it so your family won’t be surprised and minimize any hard feelings that may arise. Remember that your wishes are paramount in all estate matters, from directives to designated beneficiaries.