For the Love of Your Partner – Plan Now to Avoid Some Serious Problems Down the Road

Presently, many committed couples are choosing not to get married, especially when they have been married in the past but were divorced or widowed. Although these couples are not married, they present themselves as a married couple. They live together, and they share their assets and debts. While this arrangement may allow the happy couple to live in bliss while each partner is alive and well, trouble begins when one of the partners loses their competency or passes away.

Your partner does not have the same legal rights as would a husband or wife. In fact, their legal rights are usually no more than a stranger would have. Fortunately, with proper planning, you can provide your partner with some legal rights even if you are not married.

The first potential issue to be addressed is incapacity. If you lose your capacity, your partner has no legal rights with respect to making financial decisions for you. Although you may share assets and debts, your partner will not be able to fully handle your financial affairs unless you have executed a valid durable power of attorney. This is a document in which you designate someone to make financial decisions for you. At a minimum, naming your partner in this document will allow your partner to pay bills, manage real property and other assets, and deal with government agencies.

Similarly, your partner will have no power to make medical decisions for you if you lose your capacity unless you have executed a valid healthcare proxy. Many people would want their partner to make these decisions, but without a healthcare proxy, medical personnel must seek out your next of kin to make your decisions. A healthcare proxy is a document in which you designate someone to make healthcare decisions for you in the event that you are unable to make your own. Language addressing your end-of-life decisions, which is known as a living will, is also usually included in the healthcare proxy. This language often states that you do not want extraordinary medical procedures used to keep you alive when there is no likelihood that you will recover.

In the absence of a healthcare proxy and durable power of attorney, your partner could petition the Probate Court to become your guardian and conservator; however, your family member(s) would receive notice of this petition and would have the right to object to your partner’s appointment. An objection is fairly common in this situation and can be avoided by having a healthcare proxy and durable power of attorney in place, which would eliminate the need for the court proceeding altogether because you would have already named someone to make the decisions that a guardian and conservator would make.

Further, if you have not properly planned your estate and you pass away, you may unintentionally disinherit your partner. Your probate estate consists of any assets held in your name alone at the time of your passing that do not have a designated beneficiary. When you die intestate, which means without a will, the heirs of your probate estate are your spouse and your blood relatives. As a partner is neither a spouse nor a blood relative, your partner would not receive any of your probate estate unless you have a last will and testament naming your partner as your beneficiary. Your partner may receive those assets that he or she held jointly with you or the assets on which you have named your partner as beneficiary. Another reason to establish a will is so that you may name your partner as the personal representative of your estate, which will give him or her the authority to handle your estate for you.

If you have a taxable estate, which in Massachusetts means an estate greater than $1 million at the present time, you will not be able to take advantage of estate-tax laws that favor married couples. The unlimited marital deduction allows a deceased spouse to leave any amount of money to a surviving spouse without having to pay any estate tax. Since this deduction may be taken only with respect to assets left to a surviving spouse, it is not available to your estate if you leave assets to a partner. As such, it may be necessary for you to address your tax issues in other ways, such as by gifting using the annual gift-tax exclusion of $14,000 per person, or by establishing an irrevocable trust that owns life insurance meant to replace the wealth that will be lost on estate tax.

Even though you may have committed to your partner, if you have not taken the legal steps necessary to protect your partner’s interests should you lose your capacity or pass away, you have overlooked a very important aspect of your relationship. Once you have lost your capacity or passed away, it is too late to protect your partner. For the love of your partner, plan now and ensure their legal rights.