At the Kushner Legal Corporation, we emphasize that estate planning is essential for everyone, but it becomes even more critical for unmarried couples. In California, the law treats married couples and unmarried partners very differently when it comes to inheritance, property rights, and decision-making authority. Unlike many other jurisdictions, California does not recognize common-law marriage.
Without the legal protections that marriage provides, unmarried couples need to take deliberate steps to ensure their wishes are respected. One of the most effective tools for estate planning in this scenario is a trust. Here, we will explore key considerations for unmarried couples and the significant benefits of using a trust.

The Legal Challenges Unmarried Couples Face

California does not grant automatic inheritance rights to unmarried partners. If one partner passes away without a will or trust, the surviving partner has no legal claim to the deceased’s property. Instead, the estate will typically be distributed to the deceased’s closest legal relatives, such as children, parents, or siblings, under California’s intestate succession laws. This can leave the surviving partner vulnerable and potentially without access to shared assets.

Other challenges unmarried couples may face include:

Healthcare Decisions: Without proper legal documentation, an unmarried partner may not have the authority to make medical decisions if their partner becomes incapacitated.

Property Ownership: Jointly owned property may not automatically pass to the surviving partner unless specific arrangements, like joint tenancy with right of survivorship, are in place.

Estate Taxes: Unmarried couples do not benefit from the same estate tax exemptions as married couples, potentially exposing their estate to higher taxes.

How a Trust Can Help?

A trust is a legal arrangement where one party (the trustee) holds and manages assets on behalf of another (the beneficiary). For unmarried couples, establishing a trust provides numerous advantages:

Avoiding Probate: A properly funded trust allows assets to transfer directly to the named beneficiaries without going through probate. This not only speeds up the process but also keeps the transfer private and avoids costly probate fees.

Ensuring Inheritance: With a trust, you can specify exactly how your assets should be distributed, ensuring that your partner receives what you intend. This eliminates any ambiguity or legal disputes that might arise among other family members.

Asset Protection: Trusts can be designed to protect assets from creditors or legal claims, ensuring your partner’s financial security.

Incapacity Planning: A trust can include provisions for managing your assets if you become incapacitated, giving your partner the authority to step in without the need for court intervention.

Minimizing Estate Taxes: While unmarried couples do not share the same tax benefits as married couples, a trust can help reduce estate tax liability through strategies like gifting or establishing an irrevocable trust.

Flexibility and Control: Trusts allow for greater customization. You can set conditions for how and when your assets are distributed, offering peace of mind that your wishes will be carried out exactly as intended.

Types of Trusts to Consider

Unmarried couples may benefit from several types of trusts, depending on their goals and financial situation:

Revocable Living Trust: This allows you to maintain control over your assets during your lifetime and make changes as needed. Upon your death, the trust becomes irrevocable, ensuring a smooth transfer to your partner.

Irrevocable Trust: Once established, this trust cannot be changed. It offers significant tax benefits and asset protection but requires relinquishing control of the assets.

Joint Trust: For couples with shared assets, a joint trust can simplify estate planning by consolidating their assets into a single trust.

Additional Steps to Consider

In addition to creating a trust, unmarried couples should also consider the following:

Durable Power of Attorney: Designate your partner as your agent to handle financial and legal matters if you become incapacitated.

Advance Healthcare Directive: Appoint your partner to make medical decisions on your behalf.

Beneficiary Designations: Update the beneficiary designations on your retirement accounts, life insurance policies, and other financial accounts to include your partner.

Cohabitation Agreement: Clearly outline how assets and expenses will be managed during the relationship and after one partner’s passing.

Conclusion

Estate planning for unmarried couples in California requires careful thought and proactive measures. By creating a trust and taking other legal steps, you can ensure that your partner is protected and your wishes are honored. At the Kushner Legal Corporation, we pride ourselves on taking the time to get to know our clients individually to ensure that they receive white-glove service from start to finish and a custom estate plan that matches their individual needs. A trust not only provides peace of mind but also offers a practical and effective way to address the unique challenges unmarried couples face.

Contact the Kushner Legal Corporation today to schedule a consultation to discuss your estate planning.