New Jersey Estate Laws for Unmarried Couples: What to Know

Understanding estate laws is crucial for everyone, but it becomes particularly important for unmarried couples in New Jersey. Many unmarried partners erroneously believe that they have the same legal rights as married couples when it comes to inheritance and estate planning. In reality, this is not the case. Below are key considerations unmarried couples should keep in mind regarding estate laws in New Jersey.

1. Joint Ownership of Property

Unmarried couples often choose to buy property together. In New Jersey, they can own property as joint tenants or tenants in common. Joint tenancy includes a right of survivorship, meaning if one partner passes away, the surviving partner automatically inherits the full ownership of the property. In contrast, tenants in common do not have this right, and ownership would pass according to each partner's will or by New Jersey’s intestate succession laws if no will exists.

2. Wills and Intestate Succession

It is crucial for unmarried couples to have wills. In New Jersey, if a person dies without a will (intestate), their estate will be distributed according to state laws, generally favoring biological relatives first. Therefore, an unmarried partner would not automatically inherit anything unless explicitly stated in a will. Drafting a will allows partners to designate each other as beneficiaries, ensuring that their assets go to the intended person.

3. Power of Attorney and Healthcare Proxy

Unmarried couples should also consider setting up a durable power of attorney and healthcare proxy. These legal documents enable one partner to make financial and medical decisions on behalf of the other in case of incapacity. Without these documents, hospitals and financial institutions may disregard your partner's wishes, favoring family members instead.

4. Tax Implications

Unmarried couples can face different tax implications when it comes to estate planning. Unlike married couples, who can transfer property to each other without incurring gift taxes, unmarried partners may have to deal with gift tax regulations when transferring assets. Consulting with a tax professional can help clarify these issues and lead to better financial decisions.

5. Life Insurance and Retirement Accounts

Another important aspect of estate planning is considering life insurance and retirement accounts. Unmarried partners should ensure that they name each other as beneficiaries on these policies. Without this designation, benefits will typically default to designated individuals, often family members, which could unintentionally exclude partners from receiving any financial support.

6. Legal Agreements

Unmarried couples might also consider drafting a cohabitation agreement. This agreement outlines how property and assets will be handled both during the relationship and in the event of separation. It can provide clarity and potentially prevent disputes in the future.

Understanding New Jersey estate laws is essential for unmarried couples who wish to protect their assets and ensure their partner's rights. By establishing clear legal documents and comprehensive estate plans, couples can enjoy peace of mind knowing that their wishes will be honored, and their partner will be cared for, should the unexpected occur.

Always consult with a knowledgeable attorney specializing in estate planning to navigate the complexities of New Jersey's estate laws effectively.