Does your domestic partner have the same rights as a spouse as it relates to estate planning? The short answer is… probably not. The exact answer depends on the state you live in and maybe even the city or county.
What Is a Domestic Partnership?
While the definition of marriage is pretty obvious, many people don’t know what a domestic partnership is. A domestic partnership is an alternative to marriage that was originally created for same-sex couples who couldn’t legally marry. However, marriage became legal for same-sex couples in 2015, and a domestic partnership remains an option for any couple who might not want marriage.
A domestic partnership, in general, is a relationship in which two adults live together and plan to do so indefinitely. The laws on domestic partnerships and the legal rights and benefits they receive vary widely by state. Most states offer no domestic partnership benefits, while the remaining states offer either full benefits or fall somewhere in between. Examples of these benefits are health insurance, sick leave, parental leave, death benefits, the power to make financial and medical decisions on the partner’s behalf, and adoption rights.
Some states that offer domestic partnership benefits require that the couple formally register in order to receive them. Other states do not require formal registration.
What issues do unmarried couples face when it comes to estate planning?
There are certain estate planning issues that unmarried couples face, including those who are not in a valid domestic partnership recognized by local law. Every state has default rules that address what happens to a person’s property upon their death or who can make decisions for a person who is incapacitated and cannot make decisions for themselves.
For married people, the default person is usually a spouse. But if your significant other isn’t legally recognized as your spouse, problems such as the following can arise:
- Being unable to manage your significant other’s financial affairs or speak with institutions or government agencies on their behalf if they become incapacitated (If your partner has not set up a financial power of attorney naming you as their agent authorized to act on their behalf, a court will need to appoint someone as guardian or conservator to manage their affairs. If there is no spouse, state default laws usually give priority to a child, a parent, or another relative when appointing a guardian or conservator.)
- Being unable to make medical decisions for your significant other, visit them in a hospital, or obtain healthcare information about them during a serious illness or incapacity (If your partner has not set up a healthcare power of attorney and a living will (sometimes referred to as an advance healthcare directive), there are default laws that specify who is authorized to make those decisions and receive medical information—usually a child, parent, sibling, grandchild, or grandparent if there is no spouse.)
- Losing out on income, government benefits, insurance benefits, or retirement benefits that are exclusive to a deceased person’s surviving spouse
- Paying more in federal estate or gift taxes because there is no marital deduction or exemption for unmarried couples
- Being unable to take advantage of a tax deferral by rolling over retirement accounts because they can be rolled over only by the deceased account owner’s surviving spouse
- Being unable to serve as executor or personal representative of your deceased partner’s estate if your partner has not created a will and named you to serve in that role (If a person dies without a will, state default laws usually provide that a surviving spouse, child, or another relative has priority to serve in that role.)
- Losing property or accounts after your significant other’s death if your name was not on the title
- Losing custody of your children if you are not their legal parent either through adoption or a legal proceeding giving you parental rights
As you can see, unmarried couples face a number of estate planning issues. Depending on your state, some of these potential benefits may still be available to you. Other benefits, however, such as benefits under federal estate and gift tax laws or retirement account laws, are available only to married couples.
Domestic partnership laws vary widely, so it’s important to consult an experienced estate planning attorney in your area who can help you understand the laws that apply to your situation. We’re here to help you craft an estate plan that clearly specifies your wishes for your loved ones, money, and property regardless of the legal relationship between you and your partner. Call Santaella Legal Group, serving San Ramon, Danville, Dublin, Pleasanton & the Tri-Valley area, at (925) 831-4840 to set up a consultation.
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