Companion Protections – or Lack Thereof

The “Golden Bachelor” is back on TV this fall. While many fans of the program yell at the screen when a favorite bachelorette fails to receive a rose, I yell at the screen for different reasons.

I realize marriage is the stated goal for the show’s participants, but wedded bliss is not always in the cards. Sometimes a relationship stays in the companionship zone. It could be live-in or live-apart – we’ve seen it all. This means we’ve seen countless boyfriends and girlfriends in non-marital companionships get the short end of the deal by estate planning failures.

Don’t let that happen to you.

Marriage bestows certain estate rights and obligations on both spouses. New York State law protects a surviving spouse’s financial interest when one spouse dies. If there is no will, a surviving spouse is entitled to 50 percent plus $50,000 of the deceased spouse’s probate assets.

If the deceased spouse made special will provisions, utilized trusts or filled out financial account beneficiary forms to lower or eliminate a surviving spouse’s share, then elective share rights can bump up those shares to 30 percent.  

These protections are non-existent for companions. Lived together in the same home for 30 years but the home’s title is exclusively in the name of the deceased boyfriend? Tough luck. Pack your bags.

Your girlfriend promised you she would add your name as beneficiary to her will and her IRA but failed to do so before she died? That money is not going to you.

The only real way to ensure assets pass from one companion to another after they die is to make an effective estate plan. In many companion cases, a will and its expected probate is not the right choice. Trusts and beneficiary designations are usually the way to go.

Companionship relationships often present challenges to immediate family – children, grandchildren, and siblings. Probate requires necessary parties to “sign off” on a deceased person’s will. The tales of adult children who do not get along with a parent’s boyfriend or girlfriend is legion.

Costly delays in probate and contested proceedings drain estates. Trusts and beneficiary designations allow for smoother transitions and transfers of assets to a companion without court intervention or easy blockages by disgruntled family members. 

Companions excluded from advance directives (powers of attorney, health care proxies, HIPAA forms) run into major difficulties when their partners become ill. Adult children who are also agents under a power of attorney will exert control and begin removing access to assets to prepare for Medicaid planning. This separation momentum sometimes includes health care access if adult children and the companion are at odds and the companion is not a health care proxy or listed on a HIPAA form.

The estate planning conversation can be tricky, especially if one companion has pushed for marriage and the other has resisted. Ultimately, this is about protecting your companion. You share a life and offer security to each other. To not provide proper estate planning protection to each other can have a profoundly adverse impact.

Alan D. Feller, Esq., is managing partner of The Feller Group, located at 572 Route 6, Suite 103, Mahopac. He can be reached at alandfeller@thefellergroup.com.