PB Law Blog... Trusts and Stuff

Most people, regardless of their gender identity or sexual orientation, should make an estate plan. However, same-sex couples/families and LGBTQ individuals may have more to gain from making an estate plan than others because of the ever-changing nature of the laws surrounding LGBTQ issues.  An estate plan can also help clarify the nature their relationship for those family members or professionals who may not (sadly) 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.

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

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 decide:

• Who Gets Your Stuff? Determine who will inherit your assets
• Who Gets Your Kids? If you have children under age 18- you NEED a will, in order to nominate a guardian for your children
• Who Will Handle My Kids’ Money?  Equally important is arranging for a responsible adult to manage any assets that you’ve set aside for your kiddos; and
• Who’s In Charge?  A will nominates an executor (“Personal Representative” in Nevada) to legally handle your affairs.

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!!!

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. 
• Use Beneficiary Designations: Planning via Transfer-on-Death Accounts, Registrations, Deeds; and
• Joint Ownership: Titling property as “Joint Tenants with Rights of Survivorship” often avoids probate

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.

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.

Once you have your Health Care documents signed, register them with the Nevada Living Will Lockbox- it's free and easy! 

#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.

Most people do not have to worry about estate taxes, because only really large estates (think estates over $11mm for a single person, double that for a married couple), 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.

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.

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.

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.

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 experienced Nevada estate planning attorney is the best plan.  Also, 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.

Do not rely on Nevada 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.

“Lesbian, Gay, Bisexual, Transgender and Queer (LGBTQ) Pride Month is currently celebrated each year in the month of June to honor the 1969 Stonewall Uprising in Manhattan. The Stonewall Uprising was a tipping point for the Gay Liberation Movement in the United States. In the United States the last Sunday in June was initially celebrated as “Gay Pride Day,” but the actual day was flexible. In major cities across the nation the “day” soon grew to encompass a month-long series of events. Today, celebrations include pride parades, picnics, parties, workshops, symposia and concerts, and LGBTQ Pride Month events attract millions of participants around the world. Memorials are held during this month for those members of the community who have been lost to hate crimes or HIV/AIDS. The purpose of the commemorative month is to recognize the impact that lesbian, gay, bisexual and transgender individuals have had on history locally, nationally, and internationally.” - Library of Congress

To schedule an in-depth consultation with top-rated Las Vegas Estate Planning attorney Tiffany Ballenger Floyd, who regularly works with LGBTQ individuals and same-sex couples and families with their estate planning, asset protection, and business planning needs, please contact us online, or you can give us a call at 702-997-5701.  We look forward to meeting with you soon! 

-by Tiffany Ballenger Floyd, Esq. (Nevada Estate Planning Attorney), © 2019, Phillips Ballenger, PLLC

Photo by Yoav Hornung on Unsplash