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Estate Planning for Same-Sex Couples & Families

Estate Planning for Same-Sex Couples & Families

Most people, regardless of their sexual orientation, should make an estate plan. However, same-sex couples/families and LGBT individuals may have more to gain from making an estate plan than straight couples because of the ever-changing nature of the laws surrounding same-sex marriage and other LGBT issues.  An estate plan can also help clarify the nature their relationship for those family members or professionals who may not understand it or approve of it.

An Estate Plan Addresses Important Legal Issues

State and federal laws affect how couples own property together, who gets which assets when one member of a couple dies, how taxes are calculated and paid, and who has the right to make health care decisions if one member of the couple becomes incapacitated.  Generally, laws protect spouses in all these situations. For examples, spouses have a right to visit each other in the hospital, and to inherit from one another. They get tax breaks as well. But because same-sex couples cannot marry in most states, they are denied these benefits. They need to create estate planning documents that spell out their wishes and, as far as possible, make them legally binding.

6 Key Estate Planning Issues for Gay and Lesbian Couples

Same-sex couples have unique concerns when creating an estate plan.  Here are six estate planning issues that same-sex couples should consider:

1.    Writing a Will   A Will is a foundational element of many estate plans.  It is a simple, powerful, and relatively inexpensive document that you may be able to make yourself. With a will, you can:

  • determine who will inherit your assets
  • nominate a guardian for your children
  • arrange for an adult to manage any assets children inherit, and
  • ·name an executor (called a Personal Representative in Nevada).

You can also use your will to name a caretaker for a pet, direct how taxes should be paid, forgive debts, and more.  If you do not make a will, you will die intestate, and your property will be distributed according to Nevada's laws of intestacy.   Dying intestate almost always has an undesirable effect.  This is especially true for same-sex couples because intestate succession laws rely on the legal relationships of marriage – so if you are not married, or cannot get married in your state, intestate succession laws may leave your partner with no right to your property. 

2.    Probate Avoidance  Probate is the court process of wrapping up your estate.  Probate (for more information, click here) can be a long and expensive process, and it is rarely a benefit to the estate. There are ways to avoid probate, and many estate plans focus on doing so.    Avoiding probate may be more complicated for same-sex couples because, in many states, they cannot take advantage of laws that allow property to pass to spouses without probate.  You can avoid probate by using these estate planning tools:

  • Creating a Living Trust (also known as “Revocable Living Trusts” or “Family Trusts”)  For more information on basic estate planning, click here.  For more information on advanced estate planning, click here
    • Planning via Transfer-on-Death Accounts, Registrations, Deeds; and
    • Joint Ownership

    Additionally, some states have simplified probate procedures for small estates. So if you don’t have much property, you may not need to plan for probate at all- but keep in mind, the state of Nevada has a pretty low threshold (read, $20,000) for probate.

    3.    Appointing Health Care Decision Makers- Advance Health Care Directives  Advance Health Care Directives (or “Health Care Power of Attorney”) documents let you set out your wishes for end-of-life health care, in case you cannot speak for yourself. There are three key components to proper health care planning:

    • A Health Care Power of Attorney, where you name a person to make health care decisions for you if necessary;
    • A Living Will, where you state what kind of care you want or don’t want, and
    • A HIPAA Release, where you give authorization for your decision makers to receive medical information about you from medical providers.  Without this document, many plans DO NOT WORK!

    Health care directives are a vital aspect of a same-sex couple’s estate plan, because they give healthcare professional clear and legal instructions for providing care – without room for any speculation about the legality of the couple’s relationship.

    4.    Appointing a Financial Power of Attorney   With a Financial Power of Attorney document, you give another person power over your finances. You can make a limited power of attorney for a specific purpose or time, or a durable power of attorney, in which you name someone to take care of your finances in case you become incapacitated and can’t take care of them yourself.  If you anticipate incapacity, or just want to make sure that your partner is named to take care of your finances in case of emergency, it’s very important to appoint a durable power of attorney.

    5.    Planning for Estate Taxes   Most people do not have to worry about estate taxes, but if you do and you and your partner are not married, you won’t be able to use many of the tricks that married couples can use to avoid these taxes.

    Only estates worth more than $5.43 million will be subject to federal estate tax in 2015. So, if you die in 2015, and you leave a taxable estate worth less than $5.43 million, you don’t need to worry about federal estate tax. And all assets left to a surviving spouse -- including a validly married spouse of the same sex -- are exempt from federal estate tax.   One caveat: Find out whether your state has its own estate tax.   Of the states that do, most exempt less than the federal government does. So, your estate could end up owing state estate tax, even if it doesn’t owe federal estate tax. Nevada does not currently have a state estate tax.  

    If you are worried about estate taxes, you and your partner should see a lawyer or tax professional to discuss how to reduce them. For example, if you and your partner are married, leaving everything to each other, and are worried that your combined estate may cause the surviving spouse to owe estate tax, you can use the "portability" provision of the tax law, or use a bypass trust  to give the surviving spouse access to the first spouse’s property, without having that property included in his or her taxable estate.

    6.    Making Final Arrangements

    As part of your estate plan, you and your partner should also consider making a final arrangements document. In this document, you lay out your wishes and plans for your final arrangements.  You can specify your wishes, in as much detail as you choose, about:

    • burial or cremation
    • embalming
    • caskets and urns
    • headstones or burial markers
    • ceremonies, and
    • paying for final arrangements.

    While this document is not legally binding, it can come as great relief to those who must take care of these details after you die. Knowing what you wanted can calm concerns and put to rest any questions about your final wishes. This may be of particular help to your partner if you anticipate that other people in your life may have strong opinions about how to lay you to rest.

     An Estate Plan Also Addresses Non-Legal Issues

    Unlike straight unmarried couples, gay couples cannot rely on society’s norms to validate their most important relationships. While an unmarried straight couple might be readily recognized as a couple by friends, family, social workers, or hospital employees, a same-sex couple might have to do more convincing. 

     An estate plan can indicate to everyone involved that your partner is your partner and that he or she should be treated as such -- particularly when it comes to knowing about your wishes. This may be important for same-sex couples whose families do not know about or support their partnership. It is also important for decisions that don’t require legal backing.

    How to Create an Estate Plan

    Some people can make an estate plan on their own. However, because laws affecting same-sex couples and families can be complicated – especially when it comes to how property rights change from state to state – and are ever-changing, meeting with an estate planning attorney is the a solid plan.   If you have a taxable estate, or have recently moved (or are considering moving) to a different state, it’s imperative to meet with an estate planning attorney who works with same-sex couples.  It’s also a good idea to run your estate plan by an experienced estate planning attorney, just to make sure you’ve got your bases covered.

     Make an Estate Plan Even If You Are Registered as a Domestic Partner or Legally Married

    Do not rely on the law to do your estate planning for you.  Even if you are legally married, in a domestic partnership, or in a civil union, make a plan so that your wishes are documented no matter where you live or who is assessing the legality of your partnership.

    To schedule a consultation with Las Vegas Estate Planning attorney Tiffany Ballenger Floyd, who regularly works with LGBTQ individuals and same-sex couples and families with their estate planning, please click here.  


    Phillips Ballenger is located in Las Vegas, NV and serves clients in the Las Vegas, Summerlin, Henderson, and Boulder City areas.



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