What Unmarried Companions Need To Know About Estate Planning by Tammy M. Keirn, Esq.

What Unmarried Companions Need to Know About Estate Planning
(by Tammy M. Keirn, Esq.)

         It’s becoming more and more common for some adults to live together as an unmarried couple for various reasons.  From a legal perspective, there can be various pitfalls that result. 
         First of all, partners should be aware that unmarried companions cannot make health care decisions for each other, cannot have access to each other’s medical records and cannot participate in each other’s care or treatment without some type of written legal authority to do so.  Spouses and adult children have some ability under the law to make healthcare decisions for a spouse or parent without legal documentation, but it is limited.  Unmarried companions or partners need to have a properly drafted Healthcare Power of Attorney and/or a HIPAA authorization for release of medical records/information to make decisions and access medial information for each other.  The same difficulty would arise with regard to accessing or managing individually owned assets without a Financial Power of Attorney appointing your partner and authorizing them to access your accounts or financial information.
         Secondly, unmarried companions may want to leave assets to the other at death.  Indiana does not recognize common law marriage (though some other States do).  If companions own assets jointly or have designated each other as beneficiary of individually owned assets, then those assets will pass to that joint owner or beneficiary by law.  But individually owned assets (without a beneficiary designation) will pass according to the owner’s Last Will and Testament, or if none to the intestate heirs determined by Indiana law (related to the decedent by blood).  Those blood relatives may not be the intended beneficiaries of that individual’s estate.  A Last Will and Testament that is properly drafted by an attorney could save an unmarried companion from being left out in the cold, literally.
         Some people ask, can I do-it-myself either by handwriting a “Will” or “Power of Attorney” or by obtaining a form from the internet or an office supply store?  The answer is usually, “you can, but it may not be valid or effective”.  Sadly, many attorneys have been faced with family members or unmarried companions who bring in a handwritten note or a pre-printed fill in the blank Will form, signed by the decedent as their “Will”.  In most circumstances, those “documents” aren’t worth the paper they are written on because they do not comply with Indiana law and are not properly drafted or executed.  It can be devastating to the family member or unmarried partner who is relying on that “document” when they find out it is not valid.
         Last but not least, unmarried companions should be aware that assets passing to each other at death are subject to Indiana Inheritance Tax (except for some life insurance).  Assets passing between spouses at death are exempt from inheritance tax, but assets passing between unmarried companions are subject to inheritance tax starting at a rate of 10%. 
        See an attorney to discuss your particular needs, especially if you have an unmarried companion or partner whom you want to manage your assets, make healthcare decisions for your or whom you want to receive any part of your assets at death.  If you or a family member have additional questions about this topic or any others, please feel free to contact me for more information.  I can be reached by email at tammykeirn@lawwarsaw.com , by phone at (574) 268-9911 or toll-free at (800) 569-3903.