Estate Planning for Unmarried Couples

Shawn Plummer

CEO, The Annuity Expert

You must protect yourself and your partner if you are in a committed relationship but are not married. Without proper estate planning, your loved ones could be left fighting over your assets after you die. This guide will discuss the basics of estate planning for unmarried couples.

Understanding the Challenges of Insurance for Unmarried Couples

The legal recognition of marriage comes with certain benefits, such as receiving spousal benefits from Social Security or pensions. However, unmarried couples often do not have access to these benefits. This lack of legal recognition can extend to insurance, making it difficult for unmarried couples to get coverage that meets their needs.

Legal Considerations for Unmarried Couples

Unmarried couples do not have the same legal rights and benefits as married couples. This means they may not have access to spousal benefits from Social Security, pensions, or other types of financial support available to married couples. In addition, this lack of legal recognition can extend to insurance, making it difficult for unmarried couples to get coverage that meets their needs.

Insurance Options for Unmarried Couples

Unmarried couples can choose from various insurance options, including life insurance, health insurance, disability insurance, and long-term care. However, the availability of these options and the level of coverage may vary depending on the insurance company and the state in which the couple resides.

Limitations of Insurance for Unmarried Couples

Even with insurance coverage, unmarried couples may face benefits and legal rights limitations. For example, they may not be able to receive spousal benefits from a life insurance policy or have the same rights to make medical decisions for each other in case of incapacitation.

Death Benefits for Unmarried Couples: Why They Matter

Life insurance is one of the most important types of insurance, as it provides financial protection for loved ones in case of unexpected death. For unmarried couples, this can be particularly important, as they may not have access to other forms of financial support available to married couples.

Life Insurance Basics for Unmarried Couples

Life insurance is a type of insurance that provides a death benefit to a designated beneficiary in case of the insured person’s death. Unmarried couples can purchase individual or joint life insurance policies that cover both individuals.

Types of Life Insurance for Unmarried Couples

There are two main types of life insurance: term life insurance and permanent life insurance. Term life insurance provides coverage for a specific period, while permanent life insurance provides coverage for the entire lifetime of the insured person.

Pros and Cons of Life Insurance for Unmarried Couples

Pros of life insurance for unmarried couples include providing financial protection for a partner and ensuring that debts or expenses are covered in case of unexpected death. Cons may include higher premiums for older individuals or those with pre-existing health conditions.

Estate Planning Unmarried Couples

Joint Life Insurance for Unmarried Couples: A Viable Option?

Joint life insurance is a type of policy that covers two individuals, usually married couples. However, some insurance companies offer joint life insurance policies for unmarried couples. This can provide various benefits, including reduced premiums and simplified policy management.

How Joint Life Insurance Works

Joint life insurance is a type of policy that covers two individuals, usually married couples. However, some insurance companies offer joint life insurance policies for unmarried couples. These policies can provide reduced premiums and simplified policy management.

Benefits of Joint Life Insurance for Unmarried Couples

The main benefit of joint life insurance for unmarried couples is cost savings. Since the policy covers both individuals, the premiums may be lower than two separate individual policies. Additionally, it simplifies policy management by consolidating coverage into one policy.

Risks and Limitations of Joint Life Insurance for Unmarried Couples

Joint life insurance for unmarried couples may have risks and limitations, such as the potential loss of coverage if the couple separates or one individual dies. Additionally, the policy may not provide the same coverage or flexibility as individual policies.

Estate Planning For Unmarried Couples

Health Insurance for Unmarried Couples: Considerations and Options

Health insurance is an essential type of insurance that covers medical expenses, including doctor visits, hospitalizations, and prescription drugs. For unmarried couples, several options are available, including individual policies, group policies, and domestic partner coverage.

Individual Health Insurance Policies

Unmarried couples can each purchase their health insurance policies. These policies may offer different levels of coverage, deductibles, and premiums depending on the individual’s health needs and financial situation.

Group Health Insurance Policies

Unmarried couples may also access group health insurance policies through an employer, union, or other organization. These policies can provide access to comprehensive coverage at a lower cost than individual policies.

Domestic Partner Coverage

Some insurance companies offer domestic partner coverage for unmarried couples, which can provide access to benefits such as health insurance and dental insurance. However, the availability of domestic partner coverage may vary depending on the state and the insurance company.

Pros of Health Insurance Options for Unmarried Couples

  • Access to comprehensive health coverage: Unmarried couples can choose a joint policy or individual policies with comprehensive coverage, which can include preventative care, emergency care, and specialist care.
  • Cost-sharing opportunities: By choosing a joint policy, unmarried couples can share the cost of premiums, deductibles, and out-of-pocket expenses.
  • Flexibility to choose individual policies: Unmarried couples can also choose policies that meet their needs and budget.
  • Access to domestic partner coverage: Some employers offer domestic partner coverage, which can provide additional health insurance options for unmarried couples.
  • Opportunity to save with HSAs: Unmarried couples who choose high-deductible health plans can save money on premiums and contribute to Health Savings Accounts (HSAs) to save for future medical expenses.

Cons of Health Insurance Options for Unmarried Couples

  • Limited access to employer-sponsored plans: Unmarried couples may not have access to employer-sponsored health insurance plans, which can limit their options.
  • No legal recognition of domestic partnership: Some states do not recognize domestic partnerships, which can limit access to domestic partner coverage.
  • No tax benefits for joint policies: Unmarried couples may not receive the same tax benefits for joint policies as married couples do.
  • Potential coverage gaps: Unmarried couples may face coverage gaps if one partner loses their job or if they choose individual policies that do not cover certain medical expenses.
  • Cost-sharing challenges: Unmarried couples who choose individual policies may face challenges when it comes to cost-sharing, as they cannot share the cost of premiums, deductibles, and out-of-pocket expenses.

Life Insurance For Unmarried Domestic Partners

In the last decade, the number of adults living with an unmarried partner has risen by almost 30%. On the other hand, estate planning hasn’t always kept up with developments. Unmarried couples, including same-sex unmarried and cohabitating couples, who face particular financial issues that aren’t addressed by marriage’s structure, should take careful estate-planning measures to organize their assets strategically.

Marriage provides spouses a variety of legal protections, such as the right to receive spousal Social Security benefits and inherit property automatically, as well as the power to make healthcare and financial decisions for their partners. In addition, many state inheritance rules and basic estate-planning guidelines prioritize surviving spouses and biological children.

However, this can cause difficulties for unmarried couples since the surviving partner may not be legally recognized as an heir or by the deceased partner’s family. This situation might result in conflict and financial hardship when things should be going smoothly.

Life Insurance For Unmarried Domestic Partners

The advantages of life insurance are numerous

These issues may be addressed through life insurance, which can be more effective when coupled with trust. However, it is necessary to establish insurable interest, which varies by state, to use this approach. Each unmarried couple may have to produce evidence such as joint property ownership, business stakes, and wills to establish an insurable interest in each other.

The irrevocable life insurance trust (ILIT) is one of the unmarried partners’ post-death options when an insurable interest has been established. An irrevocable life insurance trust can be set up by one of the unmarried partners, usually the one who desires to be insured (ILIT). Then, when a partner dies, their ILIT can receive a payment from their policy’s death benefit.

The ILIT’s assets are intended to benefit the named recipients. This structure eliminates any ambiguity about who will get the assets. This characteristic may assist in preventing family conflict over how to distribute the deceased partner’s property. An ILIT may also provide the surviving partner an opportunity to obtain the money that would otherwise go unnoticed by typical inheritance laws.

Funding The ILIT

An ILIT can be funded with annual cash contributions to pay policy premiums, which are not taxable. Unmarried couples cannot transfer assets to one another tax-free in the same way married couples may do through conventional marital deductions. The gifts should not be subject to gift taxes if they qualify for the annual exemption and lifetime gift tax exclusion.

If the ILIT is funded and set up correctly, the trust will receive a tax-free death benefit from the life insurance death benefit funds upon the insured person’s death. Those assets might be able to help you reduce the estate tax bill if the deceased partner’s estate is large.

Individual Life Policies

In most circumstances, individual life insurance policy proceeds are paid tax-free. Therefore, each partner could purchase an individual life insurance policy on themselves, with the other partner as the designated beneficiary (not the estate).

Term and permanent life insurance are the two most common kinds of life insurance.

Term life insurance

A term policy lasts for a predetermined number of years (the term) as long as the premium is paid. When the term expires, you are no longer protected by the policy. To continue coverage, you can either shop for a new policy or convert your existing one to permanent life insurance. Term life insurance has a death benefit in the form of a lump sum paid out to a beneficiary when you die.

Term life insurance is the cheapest form of life insurance.

Permanent life insurance

Life insurance policies that do not terminate are called permanent life insurance. Unlike term life insurance, which offers death benefit protection for a set number of years, permanent life insurance may endure the insured person’s lifetime as long as premiums are paid according to the policy’s conditions.

These policies might also have the ability to accumulate cash value. The cash value of permanent life insurance plans grows tax-deferred, which means you won’t pay taxes on any profits until you withdraw income and as long as the policy is valid.


In most states, death benefits from annuities avoid probate. Rolling or transferring qualified retirement plans such as an IRA or 401k into a qualified annuity and naming the other partner (not the estate) the designated beneficiary could help transfer assets smoothly and quickly.

Next Steps

In conclusion, regardless of marital status, estate planning is essential for everyone. For unmarried couples, it is crucial to take the necessary steps to protect their assets and ensure their wishes are carried out in the event of incapacity or death. By working with a qualified estate planning attorney and having meaningful conversations with their partner, unmarried couples can create a plan that provides peace of mind and safeguards their future together.

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Frequently Asked Questions

Is estate planning less critical for unmarried couples?

Married or state-registered couples may need an estate plan, but the importance of having one is even greater for unmarried or unregistered couples. It protects the surviving partner and any minor children in case something happens to them and allows them to name people responsible for making medical and financial decisions on their behalf. A well-crafted estate plan can make all the difference in a crisis.

How should unmarried couples split finances?

While combining funds through a joint bank account is one of the more popular choices for couples, whether married or not, it can be risky. However, those who find success in keeping a joint account often reap the benefits from its convenience and accessibility to withdraw and deposit money with ease.

How do you protect assets if not married?

Creating a Living Trust is often the optimal solution for those who have amassed significant wealth. Additionally, it’s wise to construct both a Living Will and Durable Power of Attorney for further protection. To share ownership of your assets with another individual you trust, exploring Joint Ownership options may be beneficial too. Finally, regarding banking accounts and investments such as retirement funds, consider the most suitable avenues for protecting your interests in these areas.

At what age do most people do estate planning?

Most people think eighteen is too young to start planning an estate, but it’s one of the best times. Even though most teenagers have few possessions and a long life ahead, there are many advantages to starting early – far more than waiting until later in life! No matter your age, today is the best time to set up your estate plan. So don’t miss out on this opportunity; take control of your future and secure its success with an estate plan as soon as possible!

What is the most critical decision in estate planning?

Having a will or trust is one of the most critical steps to take when creating an estate plan, even if you don’t have significant assets. A will ensures that your property and belongings are distributed by what you desire as long as it meets all relevant state regulations.

Who should be my beneficiary if you are single?

Many single people usually name their parents or siblings as primary beneficiaries when no children are involved. Another viable option is to designate someone accountable for settling your final debts and covering the funeral expenses. If you are financially responsible for multiple loved ones, each beneficiary can be named a primary recipient.

What happens when your partner dies, and you are not married?

Without a will, if an unmarried partner passes away, their family is legally entitled to all of the decedent’s assets and possessions. This can leave their significant other with nothing while they suffer through this tragedy – no justice! Through intestacy laws, the court has complete discretion when distributing property among heirs based on relationship ties.

*Disclosure: Some of the links in this guide may be affiliate links. I may receive a commission at no cost to you if you purchase a policy. It helps us keep the lights on!

Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed insurance agent and annuity broker with over a decade of first-hand experience. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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