Estate Planning: What Unmarried Couples Need to Know: While married couples have built-in legal protections when it comes to estate planning, unmarried partners face a different reality. In this episode of Ask The Hammer, Jeffrey Levine dives into the potential complications unmarried couples can encounter, from healthcare decisions to inheritance rights, and offers some key advice:
- Estate taxes: Forget the big bucks, most people won’t owe federal estate taxes. But some states have lower thresholds, so check your own.
- The bigger issues: Health care proxies, power of attorney, and wills are crucial for unmarried couples to ensure their wishes are respected. Intestacy laws (what happens when you die without a will) may not align with your partner’s desires.
- Don’t be intestate: Get proactive! Having legal documents in place protects both partners and avoids potential family conflicts.
- Bonus: This episode also addresses state-specific estate taxes and how to submit your own questions for future episodes.
Video Description: Estate Planning: What Unmarried Couples Need to Know
Ask the Hammer: Will Cohabitating Create Complications with Estate Planning? Jeffrey “The Buckinghammer” Levine weighs in on the possible financial dangers of cohabitating with non-spouses and the potential to pay state taxes when transferring assets. Levine provides his thoughts on the following question:
My significant other and I cohabitate, but we aren’t legally married. What sort of estate planning complications might arise? I’ve read that there may be significant estate taxes to be paid when a non-spouse transfers assets.
The least of Levine’s concerns here is estate tax exemptions. In this case, the magic number is $13 million. That is how much money you can pass on to somebody, regardless of whether you are married to them, at your passing while still being exempt from federal estate taxes. However, depending on the state you live in, you may be subject to state estate taxes. What Levine finds to be of more importance are the concerns that fall to a spouse in the event of one’s passing. Without proper documentation defaulting decisions like healthcare, finances and asset transfers to one’s significant other, the court would require those decisions to now be handled by one’s next of kin, be it a parent, sibling, etc.
In order to ensure that your assets are properly transferred to the person of preference, in this case, a non-spouse, you must specify so in your will. If you die intestate (without a will), then the court’s intestacy laws will take priority, and in most states, your estate will likely be handled by the next of kin instead.
To see more episodes of Ask The Hammer, please click on this link: https://www.finstream.tv/videos/ask-the-hammer/