Taking extra steps to make sure your partner is protected can make a huge difference.
Over the past several years there has been an increasingly popular trend towards couples living together in relationships that are very similar to marriage, without actually becoming legally married. In many circumstances couples may own property together, have children together, and do all of the things that are traditionally associated with marriage – all without actually marrying. (For an article that discusses this trend in more detail, click here.) In many ways, allowing couples to have the freedom to define their relationships as they see fit is overwhelmingly positive. But in these circumstances there is one important consideration that takes on an even more critical role: establishing a good estate plan.
From an estate planning perspective, marriage confers several benefits that protect couples even if the do not have any sort of estate plan in place. One of the first ways this happens is through the rules of intestate succession. The term “intestate succession” simply refers to the default set of rules that apply if a person dies without a will. Under the intestate succession rules in Virginia, if a person dies without a will, then his or her probate estate automatically passes to that person’s spouse. Without a legally recognized marital relationship, this rule of property passing automatically to one’s spouse will not apply.
There are other considerations as well. For example with non-probate assets (i.e. assets that do not pass under a will), there may be additional rules that have the effect of protecting a married partner. Consider retirement accounts that are governed by federal law (ERISA). Under ERISA, the owner of a qualified retirement account must obtain written authorization from a spouse to name anyone other than that spouse as a beneficiary of the retirement account upon the death of the owner. Obviously the effect of this rule is to ensure that an account will pass to a spouse by ‘default’ – and if this default is overridden, the non-owning spouse is kept informed. Again, this rule only applied in circumstances where there is a legally valid marriage.
The solution to concerns like this is fairly straightforward – putting a good estate plan in place. Otherwise, a surviving partner may be effectively locked out of any involvement with the affairs of a deceased partner.