Same Sex Estate Planning
Estate planning is a daunting task, but it's essential for everyone who wants to protect their loved ones and assets following their death. Even after the Supreme Court ruled in 2015 that same-sex couples have the right to marry, it could still be very important for LGBTQ families.
Since same-sex marriages became legal in 2015, there were many new tools and tax-savings that were previously unavailable to heterosexual couples. However, same-sex couples still have many special planning needs, such as adopting non-biological parents or dealing with complicated family dynamics.
A survey conducted by the Pew Research Center revealed that over four in ten adults in the LGBTQ community have been rejected by their friends or family due to their sexual orientation. This could affect their estate planning.
The survey also revealed that over four in ten adults in the LGBTQ community have been rejected by their friends or family due to their sexual orientation. This could affect their estate planning. Unsupportive family members could sabotage the plans of same-sex couples.
In the event of the partner's death or incapacity, their wills could be contested by a family member who doesn't recognize the couple's relationship. This could affect their ability to make financial and medical decisions for their partner.
Although it's not necessary for same-sex couples to create estate planning documents, they should regularly review their existing ones to make sure that they're in compliance with current laws. This can help ensure that their wishes are carried out properly. Having the right language in these documents can also help protect both partners' loved ones and ensure that their wishes are carried out properly after they die. Keep in mind the following estate planning considerations for same-sex couples:
1. Make Sure Your Assets Transition According to Your Wishes
A study conducted by the Harris Interactive revealed that the percentage of LGBTQ investors who have a will is lower than that of heterosexual individuals. For instance, only 56% of investors with a net worth of less than $100,000 have a will. On the other hand, 70% of non-LGBTQ investors have one.
In most states, the rules regarding the distribution of assets vary significantly. For instance, if you have a will in a state that doesn't allow domestic partners, then your assets could be divided among the surviving family members.
A will can help determine the distribution of assets following your death. It can also help protect both partners' loved ones from potential legal issues.
One of the most important factors that people should consider when it comes to their wills and beneficiary designations is to make sure that they're up to date. For instance, if you have an ex-partner as a beneficiary on an IRA, then that person can collect the asset regardless of who you left it to in your will.
If you're worried that your partner's family will not contest your will, then you might want to consider creating a trust. This type of trust can help protect both partners' assets from potential legal issues. It can also help minimize the stress and pain of a contested estate planning process.
Unfortunately, creating a trust can be very expensive. If you're not sure that this is a viable option, then you might want to consider adding a "no contest" clause in your will. This type of document can help protect both partners' assets from potential legal issues. For instance, if Jane Doe wanted to leave her estate to her partner, then she would have less chance of having it contested.
You should also keep a record of all of your estate planning documents, as if they were ever contested, it would be harder to prove undue influence or fraud.
- Go Beyond a Will for End of Life Care
Although wills are commonly thought of as the main documents that people should have when it comes to estate planning, same-sex couples should also consider other documents. This is because, unlike heterosexual couples, gay individuals often face challenges when it comes to making financial and medical decisions for their partners who are incapacitated. Having the proper documents can help minimize the stress and pain of a contested estate planning process.
A durable financial power of attorney can be a type of document that people can use to manage their financial affairs if they become incapacitated or ill. There are different types of powers of attorney that can be used, and the requirements vary depending on the state.
A health care power of attorney is a type of document that can be used to make medical decisions for an individual who is too ill or incapacitated to make their own decisions. This type of document is especially important for gay couples who are in domestic partnerships or unmarried.
One of the most important types of documents that people can use to manage their health care is a privacy authorization form, which allows doctors and other healthcare providers to access their patient's medical records. This type of document can be used to establish a trustee or health care power of attorney for the purpose of managing their estate.
A health care directive is a type of document that people can use to ensure that they have the necessary health care at the end of their lives.
- Take Advantage of the Unlimited Marital Exemption
Before same-sex marriage was legalized in the US, many couples who are in a domestic partnership or an unmarried relationship would have purchased life insurance policies to help cover their partners' estate taxes.
Since same-sex couples were allowed to enjoy the same federal estate and gift tax exemption, many couples who are in domestic partnerships or an unmarried relationship would have purchased life insurance policies to help cover their partners' estate taxes. With the new law, gay and lesbian couples can now enjoy the same level of financial success that heterosexual married individuals have enjoyed.
Previously, same-sex partners were not allowed to roll over assets from their partners' retirement accounts to their own accounts without a required minimum distribution or lump-sum.
With the new law, gay and lesbian couples can now enjoy the same level of financial success that heterosexual married individuals have enjoyed. They can now revisit their estate and financial plans to free up more liquidity. This type of action is an ongoing process, and it can require the roll-back of previous plans.
- Close the Loop for your Children
When it comes to planning for their children, gay and lesbian parents have unique concerns. They need to be able to clearly identify their children, either born or adopted, in the estate planning documents.
In your will, you can also designate a guardian for minor children. Without a will, the courts can't make a decision regarding the child's future without taking into account the biological parents' wishes. The court can only choose the best possible guardian based on the child's needs and the wishes of the biological parents.
Non-biological parents should also consider adopting their children to avoid potential conflicts with the biological parents. This type of action can help prevent the child from going through a custody battle if the couple gets married. In most states, a legal relationship between a non-biological parent and a biological parent can be established without having to go through a court battle.
In addition to being able to pass on their assets to their children, adoption can also play an important role in the estate planning process for gay and lesbian couples. Since it's more common for same-sex couples to have only one biological parent, adoption should be considered.
- Consider Real Estate Ownership
Before getting married, gay and lesbian couples should also thoroughly review their real estate documents to make sure that the ownership of their properties is listed according to their wishes.
A common type of property ownership arrangement for gay and lesbian couples is called tenants in common. It gives both partners a share of the property, but allows them to pass their shares to another person in the event of their death.
A joint tenancy agreement is also a type of legal document that allows gay and lesbian couples to share ownership of their properties. If one of them passes away, the other will get sole ownership.
In some states, couples can also enter into a tenancy by the entirety ownership arrangement, which is similar to a joint tenancy agreement. This type of legal document provides additional protection for one partner against creditors.
Before making any binding decisions, you should get sound legal advice to take into account your unique situation.
- Tie-Up Loose Ends from Before Marriage Equality
Despite the legal recognition of same-sex relationships in all 50 states, many LGBTQ individuals still face challenges when it comes to planning their estate.
Some couples who got married in states that recognized their unions before the Supreme Court ruled in 2015 were then forced to move to other states that didn't recognize their marriages. They may have mistakenly thought their unions didn't count as valid in the other states.
Some states have also started to recognize civil unions or domestic partnerships as legal marriages. This means that people who got married in these unions may not have known that they were officially married.
To protect their interests, LGBTQ individuals should also resolve their various legal relationships, such as civil unions and domestic partnerships, from before marriage equality was allowed.
- Work with Professionals for Comprehensive Financial Planning
Estate planning is also important to ensure that your wishes are carried out properly and that your assets are distributed in the manner that you want them to be. This can be a more complex issue for the LGBTQ community.
It's also important for same-sex couples to work with professionals to ensure that their financial situation is handled properly. A comprehensive financial planning service can help couples manage their assets and ensure that their needs are met.