From
Your Perspective:
Financial planning for nontraditional couples
Estate planning
for nontraditional couples
If you die without a valid
will,
which is called dying intestate, the state decides
how your
assets
will be divided according to state succession laws. These laws
establish a hierarchy of heirs from among your relatives. At this point
they do not include unmarried life partners.
Even if you do have a will, if there’s a chance your family could
challenge it in probate court, that could put your partner’s financial
stability at risk. One way to avoid probate for most of your assets is
to use something called a living
trust.
You can have your lawyer draw up a document naming you as the
trustee
and
beneficiary
of the trust. You then transfer your assets to the trust. You’ll still
have full use of all of those assets as long as you’re alive, you can
change the trust’s provisions if you wish, and you can use the trust to
direct what happens to those assets when you die. Your will, in that
case, transfers only the property you don’t put in the trust.
Trusts are generally harder to challenge in court than wills. And
generally speaking it’s not significantly more expensive to have your
attorney create a living trust than it is a will. If you think there’s
a good chance of a court challenge, a trust may give you more peace of
mind than a will alone and save your estate money in the end.
Privacy is another
reason you might opt for transferring your assets with a
living trust instead of a will. Wills become part of the
public record once they enter probate, but trusts remain
confidential.
