Estate Planning for Same-Sex Couples

It’s been less than ten years since the Supreme Court case of Obergefell v. Hodges made same-sex marriage legal throughout the United States. Prior to that landmark decision, same-sex partners who wanted to be able to inherit from each other had to set up careful estate plans to achieve their goals (and often, to prevent their disapproving families of origin from interfering with those goals). They did not have the basic, statutory right, as opposite-sex spouses did, of inheriting from each other automatically under state law, and being more likely to make medical decisions as next-of-kin. 

Even though the Supreme Court decision now allows same-sex spouses the same legal rights as opposite-sex spouses, that doesn’t mean that their estate planning needs are exactly the same. And, of  course, there is the possibility that existing rights could be taken away, as happened with Roe v. Wade being overturned. Some commentators, have suggested it is possible that the same thing could happen to Obergefell v. Hodges.  In that event, LGBTQ+ individuals will need to be even more vigilant with their estate planning in light of the possibility their marriage could be declared invalid. This is not to scare anyone, but it is something to consider if you are putting off estate planning.  Here are several LGBTQ+ estate planning considerations.

Make Sure Your Property Goes Where You Intend

Only about 10 percent of LGBTQ+ individuals are married to a same-sex spouse. When it comes to inheritance, that matters a lot. If you are legally married to your partner, you have a legal right to inherit from each other under state law. But if you are not, without an estate plan, you have no legal right to inherit from each other. 

If your partner dies before you, their property will go to their legal family members: children, if they have any, and if not, parents or siblings. If the home you share is in your partner’s name, you could find yourself homeless as well as grieving. Other assets that both of you used and and enjoyed could likewise disappear if they were titled only in your spouse’s name. 

Even if you are married, it’s important to have an estate plan to clearly set forth your wishes for your property (and guardianship for children, if you have any). 

Married LGBTQ+ individuals should have an estate plan, but it’s an absolute must for any committed unmarried couple, whether same-sex or opposite-sex.

Don’t Overlook Beneficiary Designations and Jointly-Owned Property

Some assets pass through a will or trust or under state inheritance law if there is no estate plan. Other assets, like retirement accounts and investment accounts, pass through a beneficiary designation. For many people, a retirement or investment account is their biggest asset. You may have been required to name a beneficiary when you set up the account, and you may have since forgotten about it. 

A beneficiary designation on an account supersedes a bequest in a will, even if the will was created later. So, if you named your parent as your beneficiary on an account before you met your partner, and you later created a will leaving “all of (your) assets” to your partner, the partner will not receive assets from the account that names your parent as a beneficiary. 

Likewise, if you own real estate as a joint occupant with rights of survivorship with another person, that means that when one owner dies, the surviving owner takes the deceased owner’s share. So if you own a vacation home jointly with a sibling, if you die, your partner doesn’t inherit your share; your sibling does.

The bottom line: an attorney can make sure all of your assets are addressed in your estate plan and that they will pass to the people you want to have them. An attorney can also help you decide if you need a will or a trust, or both, to achieve your goals.

Protect Your Children’s Interests

When LGBTQ+ couples become parents, it’s generally the case that only one of them is the child’s biological parent. That can be a big problem, especially if there is not an estate plan in place. For example, let’s say that Stacy and Chris have a child together. The child is biologically related only to Chris, and has been raised since birth by both parents. 

If Chris dies before Stacy, and Stacy has no biological or legal relationship to the child, Stacy will have no legal right to custody after Chris’s death; one of Chris’s biological family members could become the child’s guardian. Furthermore, the lack of a legal relationship between Stacy and the child would deprive the child of the opportunity to inherit from Stacy. 

That legal relationship could be created by naming Stacy as a parent on the child’s birth certificate if the child was born through assisted reproduction technology. A court might also find a parent-child relationship based on Stacy’s acting as an intended parent from early in the child’s life. Second-parent adoption would also establish a legal parent-child relationship.  In addition, adoption would protect Stacy’s rights to custody and visitation with the child in the event Stacy and Chris divorced.

However, a simple way to ensure that the wishes of same-sex parents regarding their child are honored is to make an estate plan to that effect. Chris should have an estate plan naming Stacy as the child’s legal guardian in the event of Chris’s death; Stacy’s estate plan should provide for the child to inherit. 

Protect your child by making sure they are legally related to both parents through a second-parent adoption. Protect them further using an estate plan that protects their right to inherit from both parents. 

Plan Ahead for Incapacity and End-of-Life Care

Estate planning isn’t just about transferring your assets or even deciding who will care for your children. Estate planning also enables same-sex couples who will make important decisions on their behalf if they can no longer make those decisions for themselves. 

Incapacity planning is especially important for same-sex partners who are not married. If you want someone other than your legal next-of-kin to make financial and medical decisions for you, you must create legal documents that give them that authority, including: 

• A durable financial power of attorney to allow someone you choose (your agent) to make financial decisions and transactions on your behalf. Unlike a healthcare directive, a financial power of attorney can be utilized even when you are able to make your own decisions. However, it becomes even more important when you are unable to manage your own affairs.
• A health care directive allows you to designate an agent to make medical decisions on your behalf if you are not able to make or communicate those decisions;
• Within a healthcare directive, you are also able to describe your wishes for treatment such as when to continue or cease treatment, opinion on life support, and end-of-life care. You can even state the choices you would like your healthcare agent to take after your death such as organ donation or burial/cremation.
• HIPAA release of information, which allows your medical care providers to communicate otherwise private information to someone you choose.

Incapacity planning isn’t just for the elderly. Anyone can become incapacitated by a sudden illness, accident, or injury. Having powers of attorney and other documents in place ensures that the person making decisions for you is someone you trust. This is especially true if your biological family is likely to be at odds with your partner. 

Make Sure Your Funeral Wishes Will Be Honored

One other issue that may arise in LGBTQ+ estate planning is ensuring that the wishes of the deceased for their funeral or memorial service and burial or cremation will be honored. It is not uncommon that a biological family might choose to honor their own wishes and traditions rather than those of their LGBTQ+ child. If the deceased was trans, there is even the possibility that they could be deadnamed and referred to by the wrong pronouns at their memorial and gravesite. 

You can avoid these outcomes by designating a funeral representative in a signed, written document. Make sure your chosen representative can readily access this document so that no one else makes arrangements on your behalf.

The bottom line: Your memorial should reflect your life. Make your wishes known, and put them in a signed legal document so they won’t be ignored. 

Every family is different, and every family deserves security and respect. Make sure your estate plan reflects your family’s unique goals and addresses their needs. To learn more about estate planning for LGBTQ+ couples, contact Fremstad Law to schedule an appointment.