What are de facto relationships?
A “de facto relationship” is a legal term employed to define couples who reside together but have not entered into a formal marriage contract. In California, this living arrangement is often termed “cohabitation.” It is important to note that this status differs from a “registered domestic partnership,” in which the couple is required to officially register their partnership, and it does not carry the same legal rights and responsibilities.
How are finances distributed in de facto relationships?
In essence, couples in de facto relationships are regarded as distinct entities in the eyes of the law, even though they may share their lives together. In the event of a separation, the approach to asset distribution is contingent on the nature of the finances.
If a couple has pooled their resources and jointly holds assets, the principle of equitable distribution comes into play. In this scenario, the assets are typically divided evenly between the partners, reflecting a shared ownership of these resources.
Conversely, when it comes to individually owned assets and finances, the legal perspective remains that they are separate property. Thus, what each partner brought into the relationship as their personal financial holdings and any assets acquired individually during the partnership maintain their separate status.
What is probate? What role does it play in de facto relationships?
Probate is the legal process that occurs following an individual’s passing. It serves the crucial purpose of determining the existence of a valid will and establishing who will inherit the deceased person’s assets or be named as beneficiaries. If a person passes away without a will, Probate Code § 8461 provides a clear priority list for selecting the personal representative of the decedent’s estate. The first person in line for this role is the surviving spouse or domestic partner, as defined in Section 37 of the law.
However, it’s important to note that de facto partners, who may share a similar life together but haven’t formalized their relationship through marriage or domestic partnership, are not considered domestic partners under the law. Consequently, in the unfortunate event of a partner’s passing, de facto spouses do not have priority status for inheriting the assets or being appointed as the personal representative of the deceased’s estate.
What should people in de facto relationships do to prepare for their partner’s death?
In the absence of a legal marriage, it’s crucial to establish a comprehensive estate plan if you wish to designate your partner as your beneficiary. An estate encompasses all the assets and possessions owned by an individual. To facilitate this process, consider the following key measures:
Retirement Accounts: You have the option to designate your partner as the beneficiary of your retirement accounts. By doing so, you can ensure that they receive the benefits you’ve saved up for during your working years.
Bank and Brokerage Accounts: In cases where bank and brokerage accounts are solely in one person’s name, it’s essential to take action. You can complete a transfer-on-death or payable-on-death designation to explicitly specify your partner as the recipient of these assets upon your passing.
Real Estate Ownership: Regarding real estate, particular attention must be paid to property ownership. For both partners to have a claim on the property, it’s vital for both names to appear on the property deed. This ensures that they retain either partial or full ownership rights following the death of one partner.
By addressing these estate planning elements, individuals in de facto relationships can safeguard their partner’s financial future and ensure a seamless transition of assets in the event of their own passing. These proactive steps offer peace of mind and financial security in an arrangement where legal marital status is not present.