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"All they keep askin' me is if I'm gonna be your bride..."
-Taylor Swift, Lavender Haze
More and more commonly, the answer is "no." However, an increasing number of couples choose to live together and start families without getting married. In fact, according to research conducted by the Pew Research Center, there has been a rise in adults who are cohabiting, with the rate of cohabiting adults nearly doubling from 4% in 1990 to 9% in 2019.
Many people are familiar with the default rules for what happens to property when a married person passes away in a community property state. However, as more couples forgo marriage but acquire assets or have children together, those default rules don't apply, and unexpected legal challenges can arise. For example, common-law marriage has been abolished in California, and California will only recognize a common-law marriage if it was validly contracted in another state that recognizes this type of marriage. Generally, unmarried couples have no automatic right to their partner's assets should one of them die, and if an unmarried couple separates and there's no mutual agreement, the division of assets will be left to civil court. Healthcare and end-of-life decisions also generally go to the next of kin, not the unmarried partner.
With this rise in the number of cohabiting adults, the importance of comprehensive estate planning is apparent. Unmarried, cohabiting couples should take proactive steps to protect their rights and ensure that their wishes are upheld. Furthermore, a comprehensive estate plan also minimizes the risk of litigation when one of the unmarried partners passes away. The following estate planning tools can be adapted to address the specific considerations unmarried couples may face because the default rules for married couples won't apply at their death.
Wills and Trusts
"I have this dream my daughter-in-law kills me for the money
She thinks I left them in the will
The family gathers 'round and reads it, and then someone screams out
She's laughing up at us from hell."
-Taylor Swift, Anti-Hero
A will lets individuals designate beneficiaries, name an executor, and identify any specific gifts or instructions. A trust will provide additional protections and control over the distribution of property and is typically used in conjunction with a will.
A will is an essential estate planning tool for an unmarried couple to ensure that their assets are distributed according to their wishes. Without a will, the assets would be distributed pursuant to the state's intestacy laws, which generally pass the property along to spouses or blood relatives. In that case, an unmarried partner would get nothing. A will can direct the unmarried partner's assets to a trust, which then controls the distribution of those assets.
Additionally, the unmarried partner can designate each other as the personal representative of their estate using a will and trust. California law gives priority to surviving spouses to act as the personal representative when there are no estate planning documents. Without a will, the unmarried partner would not have priority over their partner's family members to be appointed as the personal representative, which can create conflicts.
Advance Healthcare Directives
"The buttons of my coat were tangled in my hair
In doctor's-office-lighting, I didn't tell you I was scared."
-Taylor Swift, Soon You'll Get Better
A patient's closest living relative is generally the person who will be asked to make healthcare decisions on behalf of a person if they are incapacitated, lack a written advance healthcare directive, and are not under a conservatorship. If a patient is married, their spouse is generally the closest living relative. However, if the patient is unmarried, their cohabiting partner may encounter difficulties in receiving confidential medical information from the healthcare provider or participating in healthcare decisions.
An advance healthcare directive can be used to designate an agent who has the authority to make healthcare decisions if that individual is incapacitated and unable to make decisions for themselves. This directive is especially important for unmarried couples given the federal Health Insurance Portability and Accountability Act (HIPAA) law that regulates information that can be shared to protect the privacy of an individual's healthcare information. An unmarried partner would not be considered a family member under this law and, therefore, would not be authorized to access protected health information. An advance healthcare directive can specifically identify the patient's unmarried partner as a person entitled to obtain the information.
Financial Power of Attorney
"Bill was the heir to the Standard Oil name and money"
-Taylor Swift, The Last Great American Dynasty
Similar to an advance healthcare directive, a financial durable power of attorney can be used to allow one partner to manage financial affairs for their partner if their partner is incapacitated. If the unmarried partners maintain separate bank accounts, this may be especially important in the event that one partner is incapacitated and unable to contribute their portion of usual joint living expense. The agent designated under the financial durable power of attorney can also execute contracts, like lease agreements, that are necessary to continue the unmarried couple's lifestyle.
Beneficiary Designations
"Friends break up, friends get married
Strangers get born, strangers get buried
Trends change, rumors fly through new skies."
-Taylor Swift, Right Where You Left Me
Assets like retirement accounts, life insurance policies, and investment accounts require the account or policyholder to designate beneficiaries. Unmarried couples can update their beneficiary designations to ensure that the designated beneficiaries align with the goals and wishes of the unmarried couple. Without a beneficiary designation, these assets would be distributed according to the California state law on intestate succession and would likely not be transferred to the unmarried surviving partner.
Cohabitation and Co-Ownership Agreements
"They say you bought a bunch of land somewhere
Chose the Rose Garden over Madison Square"
-Taylor Swift, The Lucky One
Cohabitation Agreements provide a framework for dividing assets, assigning responsibility for debt, and resolving conflicts that may arise if the couple separates. When a married couple who owns property jointly separates, California law will govern the disposition of that property as part of the dissolution of that marriage. If unmarried couples separate, there is no similar framework to adjudicate their property rights. A cohabitation agreement can reduce potential conflicts in the event that unmarried partners separate. A Co-ownership Agreement, similarly, can allocate and memorialize agreements between the couple regarding contributions to the down payment, mortgage payments, and ongoing maintenance, how to allocate deductions for mortgage interest payments, and outline procedures for buying out a partner's interest if they wish to sell. Settling these issues prior to the separation can prevent costly civil litigation down the road.
In conclusion, as more couples are deciding to remain unmarried but build a life with their significant other, it seems that the decision is that all's well that ends well to end up with you. But, having a well-thought-out estate plan for how your assets will be handled that is tailored to your individual relationships and goals will never go out of style.
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