LGBT Estate Planning

Estate planning is critical for everyone: single, married, straight and LGBT. However, for the LGBT community, estate planning provides additional rights and protections which may not be guaranteed as a result of same-sex marriage not being recognized nationwide.

In many states, if a member of the LGBT community fails to plan properly, the result can be devastating to his or her spouse or partner and family. Having no estate plan, or relying upon a Will, Joint Tenancy, or Tenancy in Common as an estate plan, is tantamount to giving up control of one’s estate and management of one’s well-being in times of incapacity. This need for an estate plan is critical in case of an accident or illness that renders a partner incapable of making decisions or managing his or her affairs. Without a proper estate plan, the other spouse or partner could be legally precluded from having any role in the decision-making of his or her spouse or partner’s care, managing his or her affairs, or even having access to the incapacitated partner.

Even if you reside in a state that recognizes same-sex marriage, planning is critical in the event of travel to other states and jurisdictions which do not recognize your marital rights.

History of Same-Sex Marriage

June 26, 2013, was a landmark day for LGBT couples across the United States. With two much-anticipated rulings, U.S. v Windsor and Hollingsworth v. Perry, the U.S. Supreme Court made federal benefits available to spouses in same-sex marriages and cleared the way for same-sex marriage. In U.S. v. Windsor, the Supreme Court struck down a section of the Defense of Marriage Act (DOMA), a federal law defining marriage as only between a man and a woman. That section of the law denied federal recognition to same-sex couples validly married under state law.

The purpose of the Court’s ruling was to ensure that all married couples within a state are treated equally under federal law. As a result, if a same-sex couple is married and resides in a state that recognizes their marriage, they will be entitled to all the federal benefits granted to other married couples in their state. Additionally, an IRS ruling provides that validly married same-sex couples will be treated as married by the IRS, regardless of where they live.

The majority of U.S. states now allow same-sex marriage. However, many states still prohibit same-sex marriage and its recognition, either by state statute or their state constitution. These developments are a celebration in civil liberties and a step towards the full equality for everyone under federal law. However, as you may imagine, this development has created legal complexities in estate planning for same-sex couples.

Marriage By Any Other Name . . .

Some states and local jurisdictions offer domestic partnerships, civil unions, or similar methods of legal recognition for same-sex couples. In some states these forms of relationships are in addition to marriage, whereas in other states they may be offered instead of marriage. The rights and responsibilities of domestic partnerships or civil unions vary substantially from jurisdiction to jurisdiction. For example, in some states such relationships other than marriage do not affect property rights between the parties, but in other states they do. One thing is clear, these non-marriage alternatives will not result in recognition of the relationship by the federal government.

Before committing to a marriage, domestic partnership or civil union, be sure to speak with a qualified estate planning attorney, who is familiar with the unique legal and personal needs of the LGBT community. That attorney can counsel you on the implications in your unique situation.

The Problems Estate Planning Solves for the LGBT Community

An LGBT couple can avoid numerous problems through proper estate planning:

  • For a married same-sex couple living in a state that recognizes their marriage, proper estate planning will ensure they get all the state and federal benefits of their marriage, while avoiding probate, maintaining their privacy and protecting their assets.
  • For an unmarried same-sex couple, or a married same-sex couple living in a state that does not recognize their marriage, proper estate planning will ensure their spouse or partner will have legal rights to make health care decisions, protect their rights to inherit assets from each other while avoiding probate, and utilize planning strategies to avoid the burdens of extra taxation when possible.
  • A Living Trust can nominate the spouse or partner as the trustee, i.e. manager of their spouse or partner’s affairs (if he or she so desires), if he or she becomes incapacitated through illness or accident.
  • The Health Care Power of Attorney can avoid potential problems if a spouse or partner becomes incapacitated. It allows a spouse or partner to nominate their spouse, partner or someone they care about to make health care decisions on their behalf if they are incapacitated. This prevents potential problems where a spouse or partner may not be given access to his or her incapacitated spouse or partner.
  • A proper estate plan will ensure your assets are distributed to whom you want, when and how you want.
  • The Living Trust guarantees privacy, through avoidance of probate and its process of opening court records. This is beneficial for any same-sex spouses or partners who wish for their relationship, assets, and disposition wishes to remain confidential.
  • An estate plan allows you to nominate the person you want to care for and raise any surviving minor children.

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