LGBTQ Estate Planning
Estate planning for LGBTQ couples and individuals can be a difficult process if you are unfamiliar with the rules and regulations. Throughout most of the United States’ history, LGBTQ couples have had to fight for the same rights and securities that straight couples are guaranteed.
There has been some progress in recent years, but LGBTQ couples still need to be thoughtful when it comes to estate planning. Even with simple estates, the estate planning process can be tricky, but it can be even more difficult and daunting when you add in the legal complexities that the LGBTQ+ community faces today.
LGBTQ estate planning tips for LGBTQ couples
Estate planning is important for everyone, and LGBTQ couples certainly have a number of unique issues and concerns when it comes to LGBTQ estate planning. Here are our top estate planning tips for LGBTQ couples to make sure that your directives and intentions are respected after you pass away:
Legally naming your spouse or partner is important
Even if you are legally married to your partner, we recommend naming them in at least one of the multiple estate planning documents out there if you want them to be able to make financial or medical decisions for you when the time comes. These documents include:
- Durable financial power or attorney or POA. The durable financial power of attorney or POA authorizes someone to make decisions for you about your financial affairs if you are unavailable or incapacitated and unable to make these decisions on your own.
- Living will. The living will is also often known as an advanced healthcare directive. This living will explicitly states your end-of-life care wishes if you are ever incapacitated and unable to express these wishes for yourself.
- Medical power of attorney or POA. The medical power of attorney or POA gives authority to another person, usually your partner or spouse if you are part of an LGBTQ couple, to make all of your medical decisions for you if you are incapacitated and unable to make these medical decisions on your own.
- Health care directive. The health care directive designates the kind of health care you want to receive at the end of your life in the case that you are either incapacitqated or otherwise unable to speak for yourself and make these health care decisions on your own.
- HIPAA. The Healthcare Insurance Portability and Accountability Act of 1996, also known as HIPAA, privacy authorization form gives consent to healthcare providers and doctors to disclose and discuss your condition and records with the person you designate. This form is particularly important for LGBTQ couples, especially if your medical records are ever needed to confirm or establish your mental condition or mental capacity after your passing to execute your wishes.
Proper estate planning can provide many benefits
An estate plan can provide other financial benefits in addition to protecting your partner or spouse. Estate plans can help you avoid probate, potentially offer tax benefits, and even provide you with legal and creditor asset protection if you are using the right legal vehicle.
Making sure your children go to your partner means appointing guardianship
If you share children with your partner, this is one of the most important parts of the LGBTQ estate planning process for LGBTQ couples. Courts will often step in and make decisions about guardianship for children, especially for LGBTQ couples. Often, another biological parent or the family of origin will be given preference over your partner or spouse.
You can avoid any misinterpretations about who should step in as guardian by formally nominating your partner or spouse to become the legal guardian of your children if you become incapacitated, pass away, or are somehow unable to care for your children.
A properly prepared estate plan will remain confidential
Aside from your will, which will become public record, most of your estate plan is private and confidential, as long as it is properly prepared. This includes your revocable living trust, as well as any powers of attorney or POA you set up, both financial and medical. The power of privacy can be a huge blessing for LGBTQ couples.
Failing to plan can often be planning to fail for LGBTQ couples
Without the proper estate planning documents in place, your partner or spouse might not be legally entitled to anything, including property, bank accounts, children, retirement accounts, and other important assets, if you pass away. The best and only way to make entirely sure that your family and partner are protected is by having an estate plan firmly in place.
Take advantage of the unlimited marital exemption
Prior to the Supreme Court ruling legalizing same-sex marriage, many LGBTQ couples would buy a life insurance policy to help cover estate taxes if one member of the couple planned on leaving a bequest to a partner. Today, same-sex couples enjoy the unlimited marital deduction for federal gift and estate taxes, meaning that they can typically leave an unlimited number of assets to their surviving spouse without triggering a federal estate tax, as long as they are both United State citizens.
A same-sex spouse can also roll over assets from a deceased spouse’s retirement accounts to their account without a mandatory lump-sum distribution or minimum distribution, which was not previously an option for LGBTQ couples. Same-sex couples can also revisit their financial and estate plan to free up considerable liquidity by taking advantage of the marital deduction and rolling over their assets.
Consider real estate ownership
We also recommend reviewing your real estate documents, especially for any property that you bought before marriage equality went into effect, to ensure that the ownership is listed according to your wishes:
- Tenants in common gives both you and your partner a share in ownership of the house or property but enables each person to will their shares to someone else in the case of their death.
- Joint tenants with rights of survivorship signifies that both people are owners. If one person passes away, the other automatically gains sole ownership.
We recommend speaking to an attorney at the Van Horn Law Group to learn more about LGBTQ estate planning.
LGBTQ-Friendly Estate Planning
When it comes to estate planning, we want to make sure the LGBTQ community is getting the best possible advice and help – and we have decades’ worth of experience handling such matters. If you have any questions or simply want to know your options, start by filling out our Free Case Evaluation form.
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