Proper planning becomes even more important when minor children are involved.
If you're having a baby but aren't yet married, "Having a baby, but not married? Some financial advice," from New Jersey 101.5 says that a soon-to-be father will need certain documents to make sure the mom will get his assets in the event something unfortunate occurs. In addition, what will need to change if and when you do get married?
In many states, the rights of unmarried couples are different than those of married couples. As far as a minor child, child custody issues are the same whether or not you are married, as the courts make decisions based upon the best interest of the child. Of course, the surviving parent will be the default guardian, but in the event that both parents die, issues can arise without a will and the designation of an alternate guardian. In addition to an unforeseen death, you also need to consider what could happen if you and your partner split up.
Distribution of property is very different between married and unmarried couples that break up. If you are married, almost all property will be distributed equitably and alimony can be awarded. However, when unmarried couples split up, individual property is retained by the original owner—and only jointly owned property, like a home with both names on the deed, is divided between the parties. Further, neither party of an unmarried couple gets alimony, but this can be addressed by an unmarried couple if they sign a cohabitation agreement.
Also, the laws in most states treat married and unmarried couples differently if you die without a will. When you die without a will, you are subject to the intestacy laws of your home state. This means property typically goes to a surviving spouse. Otherwise, the law states that it goes in a certain order—usually after the spouse, first to children, then to parents and other relatives. If you have drafted a will, you can specify who inherits your assets, so this will solve the issue.
There are also federal and state estate taxes to consider. If you are not married, planning for the tax-efficient transfer of assets at death (especially important for a high net worth unmarried couple) is tougher than planning for a married couple. A married couple won't have any estate tax due upon the first death if the estate plan fully utilizes the unlimited marital deduction. However, this deduction doesn't apply to the survivor of an unmarried couple. Plus, some states have both an estate tax and an inheritance tax. If you're not married, you'll have to pay whichever tax is more, or perhaps both.
As far as who can make decisions about your final wishes, if you are not married, there will be problems. Unless you state otherwise in your will, many state laws say that a surviving spouse can decide everything from the funeral to the disposition of your remains. If you aren't married, the closest surviving adult family member gets to decide these issues. That could be a parent or your siblings.
Reference: New Jersey 101.5 (December 28, 2015) "Having a baby, but not married? Some financial advice"
Talk with an experienced estate planning attorney who can help you with these documents, such as a will, durable power of attorney, and an advanced healthcare directive. If you decide to get married, all of these items should be reviewed. Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.