Cannon Financial Institute

Who Gets the Golden Retriever? What You Need to Know About Clients in Non-Traditional Relationships


What is the marital status of couples in your practice? Do they cohabitate? Are they legally married? To each other? Do you know?

As a Financial Advisor, you need to make certain you know the marital status of your clients who are couples. Straight or gay, unmarried couples must pay special attention to their financial affairs if they want their property to pass to their partner.

You, as their FA, must ensure they pay attention. Remember: people who think “it won’t happen to them” are the people “it happens to.”

Here is a classic issue: whoever is named as the primary beneficiary of your IRA inherits the assets in this account no matter what your last will and testament directs. Why? Because the beneficiary designation on your IRA overrides your will. After a breakup or divorce, many people forget to change the primary beneficiary of their IRA’s. Instead of your unmarried partner getting the assets, someone with whom you had unhappy differences decades ago could inherit the largest part of your wealth.

If you die without a will or a trust, then the law says you have died intestate. Your assets will pass to your blood relatives in order of their closeness to you. As with everything there are exceptions. Remember that state law governs who gets what and each state can have slightly different laws.

One of the most important issues facing non-married couples is ensuring that the property they think of as “their” home is correctly titled in both names. If one partner is the sole owner, and that person dies, the home will not pass automatically to the surviving partner unless the proper documents have been signed. Terrible stories abound of people turned out of what they regarded as their homes for want of clear title or a will which specifically left the property to them.

Perhaps the most difficult issue for any couple is this one: who is authorized to take you off life support if you have suffered from an accident or illness which has left you without measurable brain function and no possibility of recovery? Hopefully, this will not be something your clients will have to confront. Yet, they should plan for it.

You can be of most help to your clients by suggesting they execute the following two documents:
1) a health care proxy (durable power of attorney) for health care decisions, also known as a health care surrogate appointment, or advanced health care directive, is a document that names someone you trust to make health care decisions on your behalf if you cannot.
2) a properly created living will tells your doctor and your hospital which treatment you want if you stop breathing or your heart stops. Among the stipulations can be a “do not resuscitate order.”

As an FA who is a holistic advisor to your clients, you need to recommend they consider making these documents a part of their life planning. Unfortunately, if your clients have not left a properly executed health care proxy or advanced healthcare directive (different states have different terminology) then the person they love the most can’t be involved in carrying out their expressed desires in this situation because the two partners are not legally married.

Finally, who gets your golden retriever? Not clear if you die intestate but if you include directions in your will as to who should get your loyal companion, then the executor of your estate will ensure that person gets your golden retriever.

To learn more about this topic, register for our Certified Wealth Strategist program of study.

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