Stages of Life & Estate Planning: Non-Marital Relationships

by Jonathan A. Nelson

We last looked at Professional Singles and the changing assets and relationships driving decisions.  What happens, though, when someone special comes along, but the relationship isn't headed to marriage or hasn't yet reached that point?  The partners may have assumptions and wishes, but without the formality of marriage, they have to take affirmative steps to define the relationship if they want legal recognition.

Provision for a partner if something should happen can be done with beneficiary designations and a will, but unlike marriage, if the relationship ends but the will isn't changed, Virginia would not automatically cut out the ex. Similarly, a power of attorney or joint account can allow the partners to share responsibilities and assets, but there are few protections if the relationship ends.  Even the question of who keeps the dog or who is responsible for rent may not have a straightforward means of resolution if not documented beforehand.

One particularly important document is a medical directive.  In the event a person cannot make their own medical decisions and does not have a medical directive, there is a statutory list of people authorized to make decisions (Va. Code § 54.1-2986), which includes spouse, adult children, parents, and so on down the line, but if the Significant Other is recognized at all, their priority is after "any other relative of the patient in descending order of blood relationship."  This document is critical for giving a partner power to make medical decisions, and is important for consistency, since not every state has the same order in the default list. 

 In marriage, the law puts in place a number of default rules and protections; in a less formal relationship, some of these can still be acquired through a non-martial partnership agreement, which is enforceable under the rules for contracts.  Topics for the agreement can include expenses, assets and liabilities acquired together, and even pets. There are limits, and the agreement cannot deal with scope of cohabitation, disability, death, or children.

Next in this series: Young Families

Virginia attorney Jonathan A. Nelson uses his extensive legal knowledge and trial experience to resolve conflicts, negotiate settlements, navigate compliance matters, and vigorously advocate in the courtroom in order to achieve the best possible outcomes for his clients. He practices in estate planning, probate, trust and estate administration, corporate law, and civil litigation related to these fields.

The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.

Stages of Life & Estate Planning: Professional Singles

by Jonathan A. Nelson

The last Stages of Life post talked about college students and estate plans. Moving forward in life, professional singles (in varying degrees individually) can have significant debt, growing assets, and changing relationships.

As mom and dad tend to become less a part of daily decision-making (though hopefully no less loved), changing the power of attorney and medical directive to someone trusted who has more knowledge of and proximity to the person may make sense. Depending on the assets and debts, a will can control estate costs, facilitate handling increasing assets, and, by naming an executor, prevent creditors from taking control of the estate.

There may also be personal or tax reasons to direct the estate to different beneficiaries than the legal default: without a will, the estate of a person with no spouse and no descendants goes to his or her parents, but leaving the assets to siblings or a family college fund for nieces or nephews may be more tax efficient than sending the money back to the parents’ generation, only to have it come forward again later.

Estate planning outside these documents is also important at this stage: financial accounts need appropriate beneficiary designations; life insurance is inexpensive at this age but can protect cosigners (parents on education loans!) or co-tenants who may be left holding a lease. Although they are not legal documents, a list of major assets and points of contact, bills set on autopay, and means of electronic access to accounts are extremely helpful in the event there is an emergency and someone is stepping in and figuring out what to do.

Next in this series: Non-Marital Relationships

Virginia attorney Jonathan A. Nelson uses his extensive legal knowledge and trial experience to resolve conflicts, negotiate settlements, navigate compliance matters, and vigorously advocate in the courtroom in order to achieve the best possible outcomes for his clients. He practices in estate planning, probate, trust and estate administration, corporate law, and civil litigation related to these fields.

The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.