Estate planning is important regardless of your marital status. In fact, because Indiana law has safeguards for married couples that do not extend to unmarried partners, unmarried couples have to take extra steps to plan for their surviving partner. Consulting with a knowledgeable estate planning attorney can help unmarried couples identify and navigate these steps.
Succession
When a person dies without a will, Indiana statute provides that a surviving spouse is entitled to: 50% of the departed’s real and personal property if the decedent is survived by a child (or grandchild, great-grandchild, etc.), 75% if the decedent is survived by 1 or more parents, without children, and 100% if the decedent had no surviving parents or children (or grandchild, great-grandchild, etc.). Depending on the whether this was a spouse’s second (or subsequent) marriage, the law provides the surviving spouse has a claim to some portion of the departed’s property.
| Survived by a Child, grandchild, great-grandchild, etc.* | Survived by one or both Parents | Percentage of Property Surviving Spouse is entitled to |
| Yes | No | 50% |
| No | Yes | 75% |
| No | No | 100% |
* in estate planning, these are called a person’s “issue”
These entitlements do NOT extend to unmarried partners. In order to transfer ANY real or personal property to a surviving partner upon death, the partner who dies first must specify their wishes in writing. This can be done in a will, or by designation on a deed, title, or account.
Spousal Election
Indiana law does not require spouses to provide for each other in their will. However, if the deceased’s will does not leave anything, or leaves a smaller portion to the surviving spouse than what they would have gotten (see above rules on estate succession), the surviving spouse may “elect” to take property against the will. This “elective share” is equal to “one-half (1/2) of the net personal and real estate of the testator.” Thus, even if a will provides for a smaller share, a surviving spouse, through this “Spousal election,” is entitled to one-half of the personal and real estate of the deceased.
This option is not extended to a surviving non-married partner, who cannot “elect” because they lack this protection in statute. If the deceased had a will and failed to name his or her partner, the surviving partner has no right to any portion of the decedent’s probate assets.
Spousal Allowance
In addition to the spousal election, a surviving spouse may also claim up to $25,000 of the deceased’s assets on TOP of one-half of the real and personal estate of the deceased. Not surprisingly, a surviving partner who is not married is not entitled to the spousal allowance, or any other claim against the decedent’s estate.
Estate Tax
Married couples have an “unlimited marital deduction” via the Internal Revenue Code which permits the transfer of assets to their surviving spouse without incurring estate or gift taxes.
Unmarried couples are not entitled to this tax benefit. Unmarried partners who have assets significant enough to be subject to gift or estate taxes are treated the same as every other unrelated individual.
Right of Survivorship
In Indiana, jointly owned assets of a married couple are presumed to be owned as “tenants by the entireties”. As a matter of law, tenancy by the entireties (TE) is limited to married couples. One significant benefit to TE ownership is the automatic right of survivorship upon the first death, whether the decedent had a will or not. The TE property is said to pass to the surviving spouse “outside of probate”.
Assets that are jointly owned by non-married couples are presumed to be owned as tenants in common (TIC), meaning each person is presumed to own 50% of the assets. If the partners want to avoid a 50-50 split of such assets upon the death of the first partner, jointly owned assets must be titled as joint tenants with rights of survivorship (JTWROS).
Estate Planning for Unmarried Couples
As noted above, if only the decedent’s name is listed on a title or account, the surviving partner is not entitled to any part if upon the death of the named owner (unless specified in a will). If both names are listed on a title or account, they are presumed to own the property as TIC, and each owns 50%. If the title or account indicates JTWROS, the surviving partner would own 100%, and the asset would pass to the surviving partner without going through probate. Your attorney will be able to better explain what would happen to each ownership type of property upon the death of a partner, and make certain that your will, or property designations, reflect those wishes.
Next Steps
The next step is to consult an estate planning attorney who can help you understand what protections you can incorporate into your estate planning to protect your surviving partner. You should be prepared to answer the following questions:
- Whose name is on the title to the house you live in?
- Do you have any joint bank accounts?
- For any individually held accounts, have you named a payable on death recipient?
- How are your cars titled?
- Have either of you added a payable on death designation to your bank or investment accounts?
- Who is named as the beneficiary of your retirement accounts?
Careful estate planning can extend those protections, and ensure a surviving partner is not literally left out in the cold. Melissa McCarty provides estate planning advice to individuals – both married and unmarried – at Kroger, Gardis & Regas, LLP.
