Other Issues
Other issues that unmarried couples face include wills, trusts, and advance directives. While the last is not directly related to finances, it's definitely related to your relationship should one of you die while you're together.
Wills
Dying intestate means dying without a written will. Each state has laws that designate the method of distributing your property if you die intestate, and there's a good chance your property won't go to the individuals you'd want to receive it. That's why a will is important even if you're single. If you have kids, it's absolutely critical, because your will is the instrument for indicating who you'd want to take guardianship, something that is much too important to leave to chance or the courts.
Dying is not something you usually think much about in your twenties and thirties, but it happens to people of all ages, so think about taking steps to protect your loved one, especially if he or she develops a serious illness.
If you're married, in most states your spouse and children automatically inherit your property if you die intestate. If you're unmarried and die intestate, your property will be divided among your parents, sisters and brothers, and other relatives. Your partner will not receive anything. Without a written nonmarital contract, the only way to leave property to your partner if you die is through a will or beneficiary designation (on your retirement account or life insurance policy). If you have neither a contract nor a will, the chances of your partner getting anything are slim. See Chapter 20 for more information about wills and advance directives.
Advance Directives
An advance directive is a legal document identifying the treatments and lifesaving measures you want if you become ill and there's no reasonable hope of recovery. There are two basic types of advance directives: a living will and a durable power of attorney for health care. In a living will, you state the kind of health care you want under certain circumstances and the kind you don't want. For example, if you're terminally ill, you may not want to be resuscitated if you stop breathing. In a durable power of attorney for health care, also called a health care proxy, you designate somebody close to you to make decisions about your health care if you're unable to make them for yourself.
It's a good idea to have both types of advance directives. If you want your partner to be the person making health care decisions for you if you're unable to, a durable power of attorney for health care is a must.
