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Issues Facing Non-Traditional Families

Families today come in all shapes and sizes, but the laws in North Carolina and elsewhere have not evolved as quickly as the modern family.  Generally speaking, the law presumes "families" are made up of only traditional married couples and their children.  As a result, non-traditional families face unique legal challenges in many aspects of their lives.  For the purposes of this article, "non-traditional families" include unmarried heterosexual couples, grandparents raising grandchildren, siblings who live together, and same-sex couples (whether or not married in another state or country).  These families all want, expect, and deserve to be treated with respect and to have the importance of their family relationship recognized in their interactions with the world.  Careful, advanced legal planning can often protect the interests and achieve the objectives of non-traditional families.

Shared Assets and Inheritance

Like most traditional married couples, members of non-traditional families share a residence and have shared finances and assets.  In other words, non-traditional families often function just like a traditional family and see themselves as a unified household.  However, the law often considers and treats the members of non-traditional families as strangers to each other.  Consequently, when a non-traditional family suffers a break-up or one of its members becomes incapacitated or dies, the people involved do not have recourse to the complex system of protections that the state provides to married couples.  

To illustrate the disadvantage suffered by non-traditional families, consider the following:   There are existing guidelines governing the distribution of marital property upon a married couple's separation and divorce.  Spouses have the right to hospital visitation and can make medical decisions for each other.  A surviving spouse generally has the power to make funeral and burial decisions for their deceased husband or wife.  And married couples have an automatic (albeit imperfect) right to inherit from each other.  Non-traditional families do not automatically enjoy any of these protections. They must plan ahead and execute legal documents to protect themselves.

Cohabitation Agreements and Domestic Partnership Agreements

Guided by the objectives of the parties involved, a non-traditional family in North Carolina can execute a binding agreement that will govern issues of property ownership and support obligations.  Often a couple will want their relationship to be treated similar to that of a married couple, with joint and equal ownership of all property even though the parties did not contribute equally.  A couple might want this sort of agreement if, for example, one party works full-time, while the other party works part-time and has primary responsibility for maintaining the household or caring for the children.  

In other situations, a couple may want to maintain separate assets, even where there would otherwise be a co-mingling that could lead to claims of co-ownership.  For example, one party may own a home prior to the relationship and want to keep 100% ownership over the home even though his or her partner may contribute toward the mortgage and maintenance of the house.  

Whatever the parties objectives in these agreements, the key to success is careful drafting and a strong understanding of the law.

Changing the Title to Property

Another strategy for protecting the interests of non-traditional families is to title property in the name of both parties with the right of survivorship.  In doing so, it is important to keep gift-tax issues in mind.  It may also be important to make a record that joint ownership and rights of survivorship were intended, and the addition of a partner's name was not done solely for purposes of convenience.   While this strategy is not a substitute for proper estate planning, it is an important tool for protecting non-traditional families.

Wills, Trusts and Estate Planning

The importance of estate planning for everyone is discussed in a separate article.  It is even more critical for members of a non-traditional family.  As already noted, married persons have an automatic--if imperfect--right to an inheritance on the death of a spouse.  That is almost never going to be the case for a non-traditional family.  

Consider the situation facing different non-traditional families:  In a family where a grandparent is the primary caregiver or guardian of a grandchild, the grandparent may want and expect his or her assets to go to the grandchild.  Absent a will or trust arrangement, the grandparent's assets will not flow to the grandchild if the grandparent's own children are still alive.  

Similarly, where siblings have been living together and jointly raising each others' children, the siblings may intend for their assets to go to each other with the expectation that the surviving sibling will continue to care for all the children.  Putting aside the custody problems in this example, absent a will or trust arrangement, the siblings' assets are going to flow to their own children, not to the surviving caretaker sibling.  And as discussed in the separate article on estate planning, it is usually not a good situation for minor children to directly inherit property because of the cost and difficulty associated with long-term court supervision of the assets.  

The situation facing same-sex couples and unmarried opposite-sex couples is perhaps even more bleak.  These couples often consider themselves married and often intend for their partners to inherit their property, especially their shared home.  Absent proper planning, the laws of intestacy (the rules that govern inheritance when there is no will) will give the deceased persons assets to his or her children, parents or siblings.  This is true even if the relatives in question were estranged from the deceased person.  

A properly executed will can avoid unintended outcomes like those discussed.  By using wills and/or trusts, the members of non-traditional families can provide for and protect their loved ones by controlling the distribution of their assets.  

Health Care Decision Making and Hospital Visitation

Another area where non-traditional families experience difficulties is in the healthcare setting.  When a person becomes incapacitated and cannot make medical decisions for himself or herself, doctors and hospitals look to the patient's closest relative (usually a spouse, parent, or child) to make those decisions.  Because the members of non-traditional families are usually not each other's closest relatives (even in the case of siblings), unmarried partners are usually shut out of the medical decision making process.  And because hospitals often restrict visitors to immediate family in critical care areas, an unmarried partner cannot even visit the patient in the hospital.  

Fortunately, with advanced planning, the members of non-traditional families make sure that each other have the right to make medical decisions for each other and can visit each other in the hospital.  North Carolina (like most other state) has enacted legislation creating a statutory health care power of attorney, which gives every person the right to designate who will make medical decisions if that person becomes incapacitated.  Members of a non-traditional family can also execute a HIPAA Authorization Form that will allow doctors and hospitals to release medical information to their unmarried partner, sibling, or others.  North Carolina's patient bill of rights has also been amended to permit patients to designate individuals who may visit them in the hospital.  As a result, with these three documents, a non-traditional family can largely level the playing field and make sure their family is treated just like a traditional family in the healthcare setting.  

However, as with estate planning, if you put off executing these documents until they are needed, it will be too late.  

Seize the day.