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Planning Tips for Unmarried Couples

Christine Benz

Christine Benz: Deborah, I want to segue to another profile. This would be a same-sex couple attempting to do some estate planning. Do you have any pointers for people in this situation?

Deborah Jacobs: It's very hard for these couples to plan, because many of the traditional protections that married couples enjoy don't apply to unmarried couples, whether they're same sex or heterosexual. So I have a few pointers for these couples.

One is that like, everybody else, they need a durable power of attorney. Another is that assuming they are financially dependent on each other, they should be sure to provide for each other financially, and it's very important for them in particular to pay attention to what are called non-probate assets--that is, assets that pass outside of a will, such as life insurance and retirement accounts, which pass according to the beneficiary designations that you fill out.

Another thing they can do is they can open bank accounts as joint tenants with the right of survivorship, which means that if one of them passes away, the entire account then automatically becomes owned by the other. And this not only provides for financial security but also prevents the sort of situation where, say, a family might challenge the partner's right to the assets altogether.

One warning about this, though, is if you break up, make sure you undo the arrangement.

Benz: So how about civil unions that are available in some states. Do those provide any protections or would those allow the partner to maybe make health-care or financial decisions on behalf of the other partner?

Jacobs: This does vary enormously from state to state, and it does also provide same-sex couples with some emotional satisfaction, because it makes them feel more married than they otherwise would be. But I don't like people to rely on them, because as I say, it varies from state to state, and I'd rather see them put in place systems that are more airtight.

This area of the law is in an enormous state of flux right now. States are doing things. There are also lawsuits pending to challenge the federal law, which says that you are not married unless you are a man and woman, and you are married.

So, we may see some improvement in this over time, but meanwhile same-sex couples need to pay enormous attention to the planning they do for each other.

Benz: And spell it out in the documents rather than relying on the law to do it for you.

Jacobs: Yes.