What happens to your life partner if you die without a living trust – Important but not Urgent
Steven Covey, author of Seven Habits of Successful People, divides tasks in life into four quadrants: important and urgent, important and not urgent, not important and urgent, not important and not urgent. He goes on to explain what should be in each quadrant, and there is a lot of information to be found on this, but the interesting thing is that the things that we need to most take care of in life fall into the Important and Not Urgent quadrant. This means that most people are inclined to push the items in there forward, as in “I’ll take care of it tomorrow/next week/next month. This ends up stretching into “never.”
Were you aware that, according to recent surveys, more than 50% of Americans with children die without a will or living trust? Having a will or living trust falls under “important but not urgent,” and clearly too many people leave it until it gets done never.
If you die without either a will or living trust, the state where you are considered a resident decides how your property is distributed. This might not work out so well for you. If the state gets to decide on the division of your property (through the probate process), your partner might lose the home that has been his or her home too for many years.
This can actually happen if the house you feel you both own, and into which you have both invested time, money, and energy into upgrading and making into your home is in your name only, for instance, and the state deems that it should go to a blood relative with whom you might not even have a relationship.
Or say the house is in both your names, but you don’t have a will or living trust, the state could well give your half of the house to the aforementioned relative which also leaves your partner homeless unless he or she has the means to buy out your relative.
If you die with a will, but without a living trust, your estate will go through probate, which, in some cases, can take as long as two years to settle! In other words, not only are your heirs grieving for you, they are forced to go through this grueling process too.
And, in probate, something you deem belongs to your partner but never took the time to add to your will either, could also well be bestowed upon your relative instead, depending on the laws of the state in which you live.
If your living trust package includes a pour-over will, everything you have not yet transferred to your living trust will be willed to the living trust. So, as long as your partner is a successor trustee and, or, beneficiary of the living trust, he or she will get the property you meant for them to get.
If you die with a funded living trust, your property immediately passes to whomever you designate as your beneficiary(ies). This means that if your partner is your beneficiary, whether or not you are married to one another, your estate (or everything from it that you wish to go to him or her), goes to them with no problems at all. As a matter of fact, anything in your funded living trust already belongs to your beneficiaries; it’s just that they don’t have access to it until after your demise.
With the increase in unmarried couples over the past five years, this issue has become critical. Throw a child into the mix and the surviving partner doesn’t get the same protections that are default under law for a married couple.
If you care what happens to your family after your demise, then you might want to move the creation and funding of a living trust into the “important but not urgent” quadrant.
And actually do it.