New York — For the growing number of unmarried couples in long-term relationships, the lack of legal marital status can lead to severe financial and personal consequences upon death or incapacity, unless proactive estate planning measures are in place. Unlike spouses, unmarried partners are not recognized as a default legal unit, meaning assets can be directed to blood relatives instead of the surviving partner if no plans are made.

"The law does not see you as a default unit," explained certified financial planner Jared Gagne. "If one partner dies without planning, state law typically sends assets to blood relatives... not the partner who’s been sharing a home and a life with them." This risk is relevant to millions: roughly 9.5 million U.S. households were headed by unmarried partners in 2024, a number that has risen sharply among adults over 50.

Essential Documents: Powers of Attorney and Beneficiary Designations

Financial advisors stress that the first critical step is establishing durable powers of attorney for both healthcare and finances. These documents grant partners the legal authority to make medical decisions and manage assets if the other becomes incapacitated—a contingency often overlooked until it's too late. "The big mistake is people don’t do anything at all or they try to do it too late," said CFP John Hixson.

Equally important is meticulously reviewing and updating beneficiary designations on retirement accounts (IRAs, 401(k)s), life insurance policies, and health savings accounts (HSAs). These designations typically override instructions in a will. "Unmarried couples should review those forms... to confirm a partner is intentionally named," Gagne advised, noting the importance of removing outdated beneficiaries like ex-spouses.

Navigating Property and Probate with Wills and Trusts

For individually owned assets like homes and bank accounts, a will is essential to state intent. Without one, the state's intestacy laws dictate distribution. However, even a will may not avoid probate, a potentially lengthy court process. For smoother transfer, advisors often recommend "payable on death" designations on accounts or the creation of a revocable living trust. A trust can hold assets like a house, allowing them to pass directly to the beneficiary without probate and providing more control, such as allowing a partner to live in the home for life with the remainder going to other heirs.

As societal norms shift, with nearly 70% of adults viewing cohabitation without marriage as acceptable, the need for deliberate strategic financial planning has never been more critical for unmarried couples. Navigating this complex legal landscape requires a proactive and documented approach to ensure that shared lives are financially protected, representing a fundamental high-stakes responsibility in modern relationship planning.