Estate Planning Guidance for Non-Traditional Couples

According to 2010 census data, over 7.5 million unmarried couples are living together.  In the United States, this translates into roughly 15 million people.  In 2010, this total was a 138% increase since 1990 and the estimated average annual increase in these “non-traditional” households is approximately 13%.  Roughly 40% of these unmarried households have children. The estate planning, these non-traditional households are the focus of this article. If you’re in a relationship and have opted NOT to marry, this article is to for you, to offer some guidance concerning estate planning for non-traditional couples and families. Of course, as a Florida estate planning attorney, I’ll focus on Florida law so it is important to get expert advice on your state of residence if you’re somewhere else.

Florida Estate Planning Planning Where Marriage Laws do not Apply

The Special Rules That Apply To Married Couples, Do Not Apply To Unmarried Cohabitants and Thus Necessitates Some Extra Planning.

There are some rules of thumb to follow when you’re considering estate planning for non-traditional couples and blended families. The general rules remain the same, which are to get a professionally prepared, well thought out estate plan that is spelled out skillfully in proper Florida estate planning documents. However, the importance for non-traditional couples may be even greater, due to the absence of marriage laws, and the parties should take a few extra precautions as follows:

1.  Make Sure Your Real Property Ownership Is Properly Titled

The idea of properly titling your Florida real estate might sound obvious; however, it is common practice for folks who are living together to share the cost of the mortgage payment and living expenses.  It is important to discuss this in order to clarify whether one person is simply paying rent to the other, or otherwise intending to contribute to the mortgage payment.  The important question is how to protect that person in the event of death of the real property owner or in the event of a relational break up.

Under current law, if the title to the property is only in one person’s name and the parties aren’t married, the other party will inherit nothing upon the death of the real property owner, even if both parties were making the mortgage payments.  The way to remedy this problem is to add the cohabiting partner’s name to the deed as well as the mortgage and note.  This may become complicated if the cohabiting partner has bad credit or issues with creditors. Another option is to create a joint revocable living trust in Florida to hold the real property and include special protective provisions for both parties.

2.  Make Sure Your Wills And Trusts Properly Distribute The Estate Assets

In most states, a married spouse cannot be disinherited and in Florida, a surviving spouse is entitled to a elective share of the estate even if the last will or trust attempts to disinherit them.  The situation for unmarried cohabitants in an estate settlement is entirely different.  Simply put, the unmarried partner will have zero rights to the deceased partner’s assets.  As stated above, one way to address this is joint titling; however, for some partners with poor credit or debt issues, this may be very unwise.  Another way is to designate the cohabiting partner as the beneficiary of certain asserts via the Florida last will and testament or a revocable living trust in Florida your state of residence.  In my opinion, a joint revocable trust in Florida is preferable because it is a private Florida trust administration process verses the public court process of probate administration in Florida.

3.  Make Sure You Have A Property Settlement Agreement OR Memorandum To Govern The Distribution Of Personal Property

Another great tool is to create a written list of personal property or a “Personal Property Memorandum” and a step further is to write out a Property Settlement Agreement in the event that a break up of the relationship occurs.  The personal property memorandum can also be referenced in a last will or revocable living trust in order to make sure that the cohabiting partner’s personal property rights are protected against other heirs of the estate and also that certain items of personal property belonging to the deceased partner will be distributed to the cohabiting partner.

One Of The Primary Reasons That People Do Not Get Married Is Avoiding Joint Liability For Debts

I’ve written in the past about having an asset protection plan in Florida.  Asset protection is a primary reason why many couples do not get married because they do not want to expose the partner’s assets to their individual debts.  However, they may not realize that in many states, assets that are titled as “Husband and Wife” or “Tenants by the Entirety in Florida”  may be protected regardless.

Still, for long term medical care planning, it can be highly advantageous to stay single in order to qualify for programs such as Florida Medicaid without exposing the spouse’s assets.  This may especially be applicable where one spouse has substantial assets and the other has very little.

As always, the above decisions should be carefully reviewed with your a skilled estate planning attorney in Florida (or your state of residence) prior to preparing documents or making any decisions.

Steve Gibbs, Esq.

This is an updated version of an original article dated March 17, 2016