Estate Planning for the Unmarried

People of all ages are living together and not getting formally married; many times because of 2nd or subsequent marriages with children from previous relationships.  Most people think Indiana allows common law marriages, when a couple who has lived together a certain number of years hold themselves out as being married legally.  However, Indiana doesn’t recognize a common law marriage unless entered before 1958; which would be extremely rare today.

Indiana recognizes cohabitation but if couples separate, divorce laws as to equitable division of property do not apply.  Some couples will enter into a written Cohabitation Agreement that spells out in writing and enforced by contract law their rights and division of property and accounts in the event they go their separate ways.

If an unmarried couple has accounts that are jointly held, such as a bank account; upon death, it goes to the surviving joint owner/companion.  You can also provide for the companion by naming them as a beneficiary or TOD/POD (Transfer on Death/Payable on Death) on property in the event of death.  Of course, a Last Will and Testament can provide for their companion as well. If a Last Will and Testament is not executed, and assets are in the name of the deceased companion only, without a named beneficiary or TOD/POD, it would typically go to blood/adopted relatives dictated by Indiana law, and not to the companion. 

One of the biggest issues is when one companion owns real estate/home solely in their name, but wants their companion to have the right to live in the home only; and later if sold, or upon the death of their companion, back to their children from a previous relationship.  A carefully tailored plan on the right to live in the home, and how expenses of maintaining the real estate/home are to be handled, would have to be considered and implemented. 

My office does a lot of Medicaid/asset protection.   For unmarried couples, there are a lot less options for them versus couples who are married when one person needs care at home, assisted living, or in a nursing home. There are generous community spousal protections for a married couple that do not exist for companions.

Another important issue to consider is who will be recognized by health care providers and financial institutions to make healthcare or financial decisions and end-of-life decisions if no designation documents are in place.

I routinely meet with clients who are companions who are not married, to confirm their goals and wishes in the event of either of their disability, or death.