Florida law does not provide unmarried couples with the inheritance protections and automatic decision-making authority it provides to married couples. Even if you are in a longstanding, devoted relationship, from a legal perspective you and your companion might as well be complete strangers. Therefore, if you are not married and want to provide your partner and yourself with certain protections, you must incorporate these protections into a carefully crafted estate plan. Your estate planning attorney should create a plan that outlines not only what happens upon your death, but also upon your incapacity. Here are three critical items to build into your plan:
#1 Guarantee That Your Partner Can Live in Your Home If You Pass Away First
Older unmarried couples often reside in a home that is owned by just one partner. Typically, the owner partner wants his/her own children to inherit the home, but wants the non-owner partner to be able to reside in it for the rest of his/her life if the owner dies first. Without a plan that ensures this, when the children inherit the home upon the owner’s death, they will have the right to make the partner vacate. This situation may not be hard to imagine if your children and partner don’t get along. But even if they do, who knows what circumstances might arise in the future? For instance, your child may fall on hard times and need the proceeds from selling your house. Or perhaps one of your sons- or daughters-in-law will push for a sale.
Making yourself and your partner joint owners with rights of survivorship may appear to be a logical approach, but beware: it is fraught with downsides. Although joint ownership will allow the home to automatically pass to the survivor, it provides no mechanism for the children to get the house after your partner passes away.
A better alternative is to set up a trust providing a life estate for the non-owner partner. The trust should detail how expenses will be paid, including taxes, insurance, HOA fees, repairs, utilities, etc. Your partner will be able to reside in the house for the rest of his/her life, with the house passing to your children or anyone else of your choice once your partner passes on or otherwise moves out.
Your plan should also give your partner the right to remain in the home if you become incapacitated, and should spell out how expenses will be paid if that occurs.
#2 Empower Your Partner To Make Your Health Care Decisions
If a patient does not have a health care surrogate document, Florida law has a clear hierarchy of who makes the patient’s health care decisions if he/she cannot do so: first the spouse, then the adult children, then a myriad of others – all before a “close friend.” It follows that if you want your partner to make your health care decisions, you must create a health care surrogate giving your partner that authority. Without this document, the situation can get ugly. We know of situations in which a hospitalized patient’s devoted partner, some who had been the person’s caregiver for years, was denied visitation by adult children. Let’s face it, not all adult children get along beautifully with their parent’s companion. The animus can get even more heated when the parent/partner is ill. Note that you can name your children as back-up surrogates to your partner, but they may not serve as co-surrogates with your partner. Florida law does not permit co-surrogates. Even if you name your partner as your primary health care surrogate, you can still include your children by making sure you have a HIPAA waiver in your document that allows them to receive your confidential information from your health care providers.
However, in our experience, most people in a committed relationship who are not married prefer to name a child, not the partner, as primary health care surrogate. They then grant their partner HIPAA authority. In this way, the partner can communicate first-hand with medical providers, then pass on the information to the children. This is convenient in situations where the children do not live nearby and the partner usually who accompanies the person to the doctor, and is the one likely to accompany him/her to the hospital.
#3 Empower Your Partner To Handle Your Financial Affairs If You Are Incapacitated
If you become incapacitated, do you want your partner to handle your financial affairs? This could mean handling everything from investment decisions to making sure the electric bill is paid. How can you give your partner this authority?
First, you could make your partner the sole agent under your durable power of attorney. If you wish, you can name your adult children as contingent agents, or co-agents. In addition, you could create a revocable trust making your partner your successor trustee or joint trustee. This allows your partner to take over managing trust assets in the event of your incapacity. But note that his/her authority under the trust would only apply to trust assets. Therefore, the durable power of attorney is also necessary.
On the other hand, you may not want to give your partner authority to manage all of your financial affairs. You may wish to give your partner more limited authority – for example, access to a particular bank account, such as the account you use to pay your bills. In this case, you may create a limited power of attorney giving your partner authority over that account only, and no others.
Talk to our attorneys about the best approach for your circumstances. Call (561) 625-1100 or email KLF@karplaw.com to schedule a consultation.