Estate Planning for Unmarried Couples Living Together

8:17 am Uncategorized

According to a USA TODAY article last week, Census Bureau statistics show that the number of unmarried couples who are living together rose 13 percent in 2010.  Some demographers blame the poor job market and the bad economy, while others say that the societal stigma once attached to living together prior to marriage is no longer relevant.

Because the law does not bestow the same ownership benefits on those in long-term relationships as those who are married, unmarried couples need to protect themselves, especially if property is involved.

Estate planning for unmarried couples is especially important. If Congress fails to act on the estate tax by the end of the year, the estate tax returns in 2011 with a top tax rate of 55 percent on estates of $1 million or more.  If a surviving partner inherits real estate, savings and retirement accounts, this could easily exceed the limit.  They may be forced to sell the home to pay estate taxes.  To prevent this and to take advantage of estate planning strategies to protect an estate from taxes, couples that are living together should consult with a California estate planning attorney by the end of the year.

If you and your partner own a house together, you should consider joint tenancy, a form of legal co-ownership that ensures the property passes to one partner as a survivor benefit without requiring the property to go through probate.  Unmarried couples can also draw up a trust or contract that specifies how the property will be handled in case of a break-up.

Contact us today and let our Newport Beach law firm help you with all your financial planning needs.

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