What Are Special Estate Planning Considerations for Unmarried Couples?

Question:

Answer:

In many states, including California, you and your unmarried partner will never have a “Common Law” marriage. This means the family law code will not apply to you, regardless of the length of your relationship.

You are legal strangers and have no rights to each other’s assets or to act as each others’ proxies and agents for healthcare or finances.

You may have no legal right to remain in your partner’s home if they die.

If the co-parent of a minor child dies, the surviving parent may not have access to or the right to control the assets inherited by the minor children. A judge may give that authority to someone else.

Has your CPA may have told you it is better to remain unmarried for income tax reasons? Have you met with an estate planning attorney to determine your capital gains exposure on death?

This video was made with unmarried couples in mind, but married couples should tune in! Did you know that capital gains tax exposure rests on the words used on the face of your deed? Taking the title as “Community Property” has terrific tax benefits – a double step-up in basis. This protects a surviving spouse and your ultimate heirs. All other forms of title (joint tenants, even with rights of survivorship and tenants in common) leave the survivor exposed to capital gains taxation. But that does not mean this is the right way to take the title in every instance – check with your estate planning attorney or family law attorney.