Estate Planning for Married Couples vs. Unmarried Couples Part 2 – What These Differences Mean

In our previous blog post, we covered some of the differences in estate planning for married vs. unmarried couples. In this edition, we will cover what these differences mean with examples. 

1. Dying without a Will – Intestate Succession.  

The first situation from the last edition was the rules for someone dying without a will, known as intestate succession. Under the intestate succession rules, an unmarried couple has no inheritance rights to the other’s assets. Only the decedent’s surviving spouse and descendants receive assets through intestate succession. 

For example, an unmarried couple lives together in a house that only one of the pair owns. Both consider the house as their primary residence. Even though only one of them owns the house, they both contribute to the expenses, including paying the mortgage and the taxes. Then the owner of the house dies without a will.

  • What part of the house does the survivor receive through intestate succession? The answer to this is nothing. The house passes to the decedent’s children, if any, or if not, to parents if any are living, or if not, to the decedent’s siblings.
  • Does the survivor have the right to remain living in the house? The answer to this question is no. The survivor’s ability to remain in the house will be up to the decedent’s family members who are the new owners.
  • Does the contribution to the mortgage and expenses give the survivor any right to the house? The answer to this question is no. In most cases, the payments would be considered either a gift from the survivor to the decedent or maybe the payment of rent from the survivor to the decedent. 

The above example could be a disaster for the survivor. He/she has nothing and may get kicked out of their home. 

2. Spousal Elective Share. 

The second situation was the surviving spouse’s statutory right to an “Elective Share” of the decedent’s probate assets. As the name implies, this right to receive part of the decedent’s estate who does have a will is only for married couples. The survivor has no Elective Share against the decedent’s will. If the decedent does not make provisions in his/her will for the survivor, the survivor receives nothing.

Using the above example of the unmarried couple and the decedent is the one who owns the house. In this example, the decedent has a will.

  • Can the decedent leave the house to the survivor? The answer is yes, and then there is no problem. The survivor receives the house.
  • What if the will does not leave the house to the survivor? If the will does not leave the house to the survivor, then the house passes to other beneficiaries. Like the intestate situation above, the survivor is at the mercy of the new owner as to whether they can stay or must leave. 

3. Right of Survivorship through Tenants by the Entireties.  

Another situation discussed is when the couple has both their names on the asset’s ownership. This situation can be a little tricky because it can depend on the asset. For instance, a bank account with both names could be considered to have a right of survivorship, even though the couple is not married. But with real property, when two unmarried people are on the deed, it is considered to be owned as Tenants in Common. 

Tenants in Common do not have a right of survivorship between them. Each of the couples owns his/her own separate interest. As such, each person’s will (or intestate succession if no will) directs the passing of the interest in the real property. 

Using the example of the above unmarried couple, with both the decedent and the survivor owning the house together. At the decedent’s death, only his/her 50% portion passes. The survivor keeps his/her 50% portion.

  • What happens if the decedent has a will? The decedent’s 50% interest passes to whoever the will directs. If to the survivor, then the survivor now owns 100% of the house. If not to the survivor, then the survivor still owns his/her 50% and has a new co-owner in the house. 
  • Can the decedent leave the house to the survivor? Yes, and then there is no problem. The survivor receives the house.
  • What if the decedent does not have a will? Again, with intestate succession, the survivor cannot receive the decedent’s 50% interest. It passes to one or more family members as the intestate statute directs.
  • Does the survivor keep his/her 50%? Yes, but the new owners of the decedent’s 50% interest could force the house’s sale, even if the survivor does not want to sell. This is referred to as a “Partition and Sale” action. Even though the house might be sold, the survivor has the first ability to purchase the other 50% interest to become the owner of 100% of the house.

Estate Planning for Married and Unmarried Couples

What does all this mean? An unmarried couple needs to have a thoughtful, well-designed, estate plan to make sure that the assets go to the right people at the right time. Unfortunately, the laws do not favor unmarried couples, so if you aren’t married to your partner, you’ll need to be cautious when it comes to estate planning. At MHPS, we help people with various needs create estate plans that work for their unique situations.

Contact our estate planning attorneys today to find out how we can help.

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