THE IMPACT OF COHABITATION IN ESTATE PLANNING

It seems to be more and more common for people to live together rather than getting married first and then living together. With the divorce rate being more than 50%, it’s hard not to be skittish about tying the knot. When it comes to estate planning, two people in a committed relationship, but not married, can run into problems in the event of disability and upon death.  

If one of the parties gets into a major car accident, and is unable to make decisions, the other person does not automatically get authorization to speak to the doctors and advise him/her of the care needed. If family members are out of town, or estranged, then it’s even more difficult.  It is very important that you have Powers of Attorney for Health Care so that each of you can choose the people who you want in charge of your life.

If you are in the hospital, who is going to pay your bills? Will your partner have the right to get access to your bank account, and pay your mortgage, your utilities, and your car payment?  Most likely not. You should just appoint people in a Property Power of Attorney so that persons that you choose can get access to your accounts and take care of your financial needs and obligations.

When a couple is not married, they also need to discuss what would happen if one of them dies. Would the surviving partner live in the house that may only be in the decedent’s name?  Did the surviving partner assume that he/she would be receiving all of the assets? Does the unmarried surviving partner have any right to the assets? In Illinois, there is no such thing as common law marriage. So technically the surviving partner does not have any right to the property. However, if such surviving partner can show proof that he/she did contribute to the property, he/she may be able to bring it to court and argue for partial ownership.

When you decide to cohabitate, but not get married, it is important to have an open discussion about what would happen upon death or disability. Otherwise, your family may be fighting with your partner on medical decisions, and who has the right to the assets. If they end up arguing in court, the assets can easily be depleted just by the attorney fees alone. The best thing to do is to prepare a comprehensive estate plan with an estate planning lawyer in Schaumburg, IL that lays out what you want to have happened, and who will be in charge. This will avoid the fighting and unnecessary spending of your hard-earned assets.

Thanks to Bott & Associates, LTD. for their insight into estate planning and cohabitation.