A couple of weeks ago we looked at some key reasons why you and your partner need to discuss estate planning this year if you are not married, or are not planning on becoming so. The law makes some significant distinctions between married couples and those living in a romantic relationship who are not married. While we discussed some general ideas about the situation in our last discussion on this topic, this week we thought we would look at some specific steps and issues you and your partner might need to talk about.
You and Your Partner Need to Discuss Estate Planning: Life Insurance
If either you or your partner has a life insurance policy, you will need to go over the policy details with one another if you intend the other to be the beneficiary. Life insurance policies come in a couple of key forms, but they all generally do the same thing. Namely, when the insurance policyholder dies, the policy provides for the named beneficiary to receive the specified payout. Before you commit to an insurance policy you’ll need to go over its terms, make sure the insurance payout is suitable, and make sure you can afford to pay the monthly or yearly premium.
Beyond that, you will absolutely need to make sure that your partner is named as your beneficiary if you intend your partner to receive the payout. If you are using other estate planning tools, such as living trusts, you may need to include the name of the trust of the beneficiary. However, if such advanced tools are a part of your estate plan, you’ll want to talk to your estate planning attorney about making this adjustment.
You and Your Partner Need to Discuss Estate Planning: Inheritances
Beyond a life insurance policy you’ll also need to make sure that your inheritance plan addresses your partner and names him or her as a beneficiary of your estate. This means, for example, including terms in your will, as well as adjusting any transfer on death assets you might have, such as investment accounts or bank accounts.
You and Your Partner Need to Discuss Estate Planning: Practical Concerns
Beyond the legal issues you will also need to discuss with your partner the practical issues surrounding estate plans and the documents that are a part of them. For example, if your partner becomes incapacitated, do you know where his or her durable powers of attorney are located so that you can begin making any necessary choices on your partner’s behalf? Do you know what kind of benefits your partner has provided for you through his or her inheritance plan?
Discussing these issues prior to creating your plan is essential if you want to get the most from them, and if you want to make sure that both you and your partner are knowledgeable and up-to-date about your partner’s wishes.