Planning for Your Life Together – And Beyond
Now that you’ve decided to register your domestic partnership, you need to plan for your life together. If you and your partner decide to be just roommates you have no property or inheritance rights. But, as registered domestic partners, you have both. Proper financial and estate planning are important steps in understanding each others wishes about your property and respecting how each of you want your affairs handled should you die.
Everything you earn during your registered domestic partnership is presumed to be community property. That means that each partner has a 1/2 interest in everything the other partner earns. It is important that you discuss how you are going to invest your community earnings. Will you invest in mutual funds, bonds, stocks? Who will you name as beneficiary of these accounts? Do you have enough insurance to take care of each other if one of you becomes disabled or dies? What about insurance for your children?
You also need to make decisions regarding your families, including children from prior relationships. As a domestic partner, you are treated as a spouse if your partner dies. This means that, absent proper planning, property which you or your partner want to go to children from a prior relationship will be diluted, leaving less for those children. Let’s look at an example. Bob and Adam form a domestic partnership. Each has a child from a previous relationship. If Adam dies without making any plans, his property will be divided between Bob and Adam’s child. If Adam has 2 children, his property will be divided three ways. Is this what Adam really intended? If both Bob and Adam are each financially independent, perhaps they would rather leave the bulk of their property to their respective children.
What about children that you have together? You need to provide for those children and decide who will act as guardian if you both die. How will you pay for college or deal with a child with special needs?
A proper estate plan can address all of these issues and give you both peace of mind as you build a life together. At a minimum, you each need a will. A will is a document which sets forth how you want your property distributed after you die. Remember the children who didn’t get as much as you wanted them to? A will can avoid such a situation. A will also lets the court know who you want to act as guardian of your children. When you have a will, the court must make sure your debts are paid and your property distributed according to your written wishes.
You might consider a revocable living trust. A trust is like a box in which you put your property. The property inside is yours to do with as you please while either or both of you are living. When you both die, or become incompetent, the trust sets forth how your assets are to be managed and how to distribute them after you die. The best part of a trust is that it does not need a court to do or oversee anything. You can even keep your property in trust for your children so they don’t spend their inheritance during youthful indiscretions.
Other parts of a good estate plan are financial and health care powers of attorney. Although a registered domestic partnership gives you the same rights as a spouse, it does not automatically give you rights to act for one another with respect to financial or health matters.
Nevada’s Domestic Partnership Act is very exciting. But with it comes greater responsibility toward your partner and your family. Proper planning before and after you register your partnership can give you both peace of mind for a happy future.