Probate, Community Property, and Common Law Marriage: What You Need to Know
Navigating the legal landscape of probate can be complex, especially when questions about community property and common law marriage come into play. With common law marriage and community property laws falling under state jurisdiction, understanding the laws in your state is essential when you own assets with your unmarried partner or soon-to-be spouse. Furthermore, beneficiaries and executors may want to understand these laws around relationship dynamics and how they impact the distribution of assets and the probate process. So, let's delve into the realm of probate, community property, and common law marriage to unravel the essential details you need to know.
What is Common Law Marriage?
A common law marriage is simply when couples live together or cohabitate without a formal and legal marital relationship. When you enter a common law marriage, you form a committed relationship without a wedding ceremony or legal marriage documents. In some US states, common law marriage is valid provided the following requirements:
Couples show intent to marry
A significant period of living together (no specific requirement, but the longer the better)
Individuals are both of legal age
Individuals are of sound mind
Neither are married to other people
Behaving as a married couple (own a home together, have children together, joint bank accounts, etc.)
Is Arizona a Common Law State?
No. Common law marriages are not recognized here. Hence, a surviving common law spouse is not recognized in the event of probate for their partner’s estate. This fact is critical to consider if you are in a committed yet unmarried relationship and want to protect your and your partner’s inheritance rights.
However, Arizona does recognize common law marriages that were established in other states. Thus, your common law marriage will be honored if it originated in the following common law states:
Colorado
South Carolina
Rhode Island
Texas
Utah
D.C.
Montana
Iowa
Kansas
What is Community Property?
Community property refers to the legal principle that assets acquired during a marriage belong equally to both spouses, regardless of which spouse earned or acquired them. In community property states like Arizona, this means that any income earned, property acquired, or debts incurred during the marriage are considered community property and are owned equally by both spouses.
This includes wages, real estate, investments, and even debts. However, there are exceptions, such as inheritances or gifts received by one spouse, which are typically considered separate property unless commingled with community property. Understanding the concept of community property is crucial, especially in the context of probate, as it can significantly impact how assets are distributed upon the death of one spouse.
Additionally, since Arizona is not a common law state, the community property law does not apply to unmarried couples.
Estate Planning for Unmarried Couples
Because unmarried couples in Arizona don’t have the benefit of a common law marriage to fall back on during probate, they must plan ahead through estate planning. An estate plan ensures their assets are protected and distributed according to their wishes. Here are some key aspects to consider when creating an estate plan:
Will or Trust
Drafting a will or establishing a trust is crucial for unmarried couples to specify how they want their assets to be distributed upon death. Without a legally valid document in place, the state's intestacy laws will dictate how assets are distributed, which means that unmarried partners will be left out.
Beneficiary Designations
Review and update beneficiary designations on retirement accounts, life insurance policies, and other financial accounts. Naming your partner as a beneficiary ensures they will receive the assets directly, bypassing the probate process.
Power of Attorney
Assigning powers of attorney for healthcare and finances allows unmarried partners to make medical and financial decisions on each other's behalf in the event of incapacity. Without these documents, decisions may be left to family members or the court.
Joint Ownership
Consider joint ownership of assets, such as bank accounts or real estate, to facilitate the transfer of ownership to the surviving partner outside of probate. However, be aware that joint ownership may also expose assets to creditors or legal claims against either partner.
Advance Directives
Create advance directives, such as living wills and healthcare proxies, to outline your end-of-life wishes and appoint someone to make medical decisions for you if you become unable to do so yourself.
Review and Update Regularly
Life circumstances and relationships may change over time, so it's essential to review and update your estate plan regularly to ensure it reflects your current wishes and circumstances.
By taking these proactive steps in estate planning, unmarried couples can protect their assets and ensure their partners are provided for in the event of death or incapacity. Consulting with an experienced estate planning attorney can help navigate the complexities of estate planning for unmarried couples and ensure their wishes are legally documented and upheld.
Secure Your Future Together with Rilus Law
Whether you're considering marriage, living together, or entering a committed partnership, proactive legal planning is essential to safeguard your assets and ensure your wishes are upheld. Rilus Law's marriage plans and cohabitation agreements offer personalized solutions to address your specific needs, providing clarity and protection for your relationship. Don't leave your future to chance—book a free consultation with our experienced attorneys today to create a customized plan that secures your legacy and protects your loved ones