Estate Planning Tips for Cohabiting Couples in Illinois

 Posted on March 12, 2021 in Estate Planning

According to an analysis of information from the U.S. Census Bureau, the number of couples who choose to live together without getting married skyrocketed from 230,000 in 1995 to over 1.5 million today – a 550 percent increase. Included in these numbers are older couples who choose to cohabit without the various legal protections that a legally recognized marriage offers. This lack of protection can have a significant impact on rights of inheritance and other estate planning concerns.

At our firm, we have helped hundreds of families develop an estate plan to meet their unique needs, and we understand the challenges that unmarried, cohabitating couples may face. There are steps that both younger and older couples who cohabit should consider to ensure that if something should happen to one of them, the other is both financially and legally protected.

Transferring Assets

Couples who are married are entitled to tax-free transfers of at least a significant portion of assets upon the death of one spouse. Cohabiting couples, however, are not afforded that same benefit. That is why it is essential for unmarried couples to have a will in place that clearly specifies what their wishes are when it comes to those assets. It may also be a smart move to consider a living trust, which allows for more control during your lifetime and can help to avoid the costs and uncertainty of probate.

Decision-Making Authority

Creating a power of attorney could also be a good idea if you and your partner are not married. There are two types to choose from, as they relate to property concerns: a general power of attorney and a limited power of attorney. With a general power of attorney, the person you appoint is able to make any legal and financial decisions regarding your assets and other property, while a limited power of attorney specifies certain kinds of decisions over which the person has authority.

Cohabiting couples should also draw up a health care proxy and a living will. A health care proxy is sometimes known as a power of attorney for health care, and it covers making medical decisions on your behalf in the event you become ill and/or incapacitated. If you do not name your partner as a health care proxy, he or she will legally have no say in your medical care should something happen to you. With a living will, you are also letting medical personnel know exactly what your wishes are regarding end-of-life treatment.

Named Beneficiaries

Perhaps the most obvious element in estate planning for unmarried, cohabiting couples is that, should you die without any planning tools in place, your partner is not entitled to receive any of your property whatsoever under the intestacy laws in Illinois. Intestate property is any which is not accounted for in a will, trust, contract, or any other legal document. The distribution of intestate property is governed by the Illinois Probate Act, which bases all inheritances on marital and familial relationships. Thus, in order for your partner to receive any portion of your estate, you must make a definitive plan.

Contact a DuPage County Estate Planning Lawyer

If you are living with your partner and have no plans to marry, contact an experienced Lombard estate planning attorney. Our knowledgeable team can help you develop a comprehensive plan that protects both of you. Call 630-426-0196 to schedule your initial consultation at A. Traub & Associates today.

Sources:

https://www.pewresearch.org/fact-tank/2019/11/06/key-findings-on-marriage-and-cohabitation-in-the-u-s/

https://www.forbes.com/sites/brianthompson1/2019/08/11/the-top-10-financial-planning-concerns-for-unmarried-couples/

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2104&ChapterID=60&SeqStart=3700000&SeqEnd=5000000