(Part 1 of a 2-Part Series)
When it comes to protecting unmarried partners, consider several options. One or more strategies benefit you. Make the decision based on:
- The value of your money and property
- Your desired level of protection from your partner’s creditors
- Factors unique to your unmarried partners situation
A word of caution: regardless of which methods you use, work with an experienced estate planning attorney. While do-it-yourself options may be cheaper, they often create more problems than they solve. And the resulting problems can be expensive to remedy.
Add Your Partner as a Joint Owner on an Account or Piece of Property
Making unmarried partners joint owners is easy. Simply give them immediate access to and control over an account or property. Keep the account or property owned jointly, with the right of survivorship. This way, your partner will automatically be named the sole owner upon your death. Probate will not be necessary. However, this option has shortcomings.
Partnership
Therefore, your partner will become the sole owner at your death. They will decide what will happen to the account or property upon their death. Trust your partner to make a decision you would have supported. In addition, once your partner assumes joint ownership of the account or property, your partner’s debts pass to you. Should your partner become subject to a creditor’s claim or lawsuit, creditors could seize your jointly owned account or property to satisfy outstanding judgments. Finally, if you and your partner break up, removing their name from your accounts or property could be problematic. What’s more, they could lead to costly and emotional litigation if your partner is unwilling to cooperate.
Name Your Partner as the Beneficiary of a Retirement Account or Life Insurance Policy
Most retirement accounts and life insurance policies have beneficiary designation forms. These enable you to dictate who will receive your retirement account balance or the death benefit when you die. In many cases, instructions require naming a primary beneficiary and a contingent beneficiary. (These are used as backup in case the primary beneficiary is deceased or does not want the money).
How to Add a Partner
Adding your partner is an easy solution to pass money to your partner at your death. This does not jeopardize your ability to control the account or policy during your lifetime. However, if someone sues your partner, their money could be available to satisfy any judgments against your partner. Also, if money remains when your partner dies, they will choose the person to receive it. In addition, you lose control over how to spend the money. Your partner could spend it all on a lavish vacation or an expensive sports car.
Check back next week to read the conclusion of this two-part series.
About Skvarna Law in Glendora and Upland, California
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services. We cover San Bernardino, Los Angeles, Orange, and Riverside Counties. This includes several cities. Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, Montclair, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma.
