Regardless of your gender identity or your sexual orientation, estate planning is crucial to protecting your assets, your wishes, and your loved ones.
Estate planning allows you to designate your partner, whether you are married or not, as the person who can make decisions for you if you are unable to make them yourself.
This offers protection against discrimination by people who may be reluctant to recognize your relationship. You can also provide financial support for your partner in your estate plan.
How RFMA Affects Same-Sex Couples
On December 13, 2022, President Biden signed the Respect for Marriage Act (RFMA). The RFMA requires the recognition of valid same-sex and interracial civil marriages by the US federal government and all US states and territories. Note that this law doesn’t apply to unmarried couples.
However, unmarried couples can still get partnership decision-making benefits and privileges by way of a different type of estate planning. However, you define your partnership, creating a valid estate plan to protect yourselves is possible and important.
With proper estate planning, married same-sex couples may receive all federal and state benefits of marriage, including unlimited marital deductions for federal estate and gift taxes.
By using other legal strategies, unmarried same-sex, transgender, or non-binary couples who can’t receive marital tax benefits can still ensure they will receive the legal right to inherit each other’s assets. They will also be able to make financial and health care decisions for each other.
Trusts for the LGBTQIA+ Community
Whether you're in a marriage or a similarly committed relationship, a revocable living trust allows you and your partner to nominate each other as trustees of your respective trusts. This will allow you and your partner to manage each other's financial affairs if one of you becomes incapacitated.
A trust is also the best way to ensure your loved one receives the assets and privileges you want them to have. If a same-sex, transgender, or binary couple has children, in which one parent is a biological parent, a trust allows the biological parent to name the other parent as guardian of the children while they are minors if the biological parent were to become incapacitated or die.
Durable Financial Powers of Attorney for the LGBTQIA+ Community
A durable financial power of attorney is an easy way to designate your partner as the person who may handle your financial affairs if you become incapacitated. Durable financial powers of attorney documents vary somewhat from state to state, so it's important to review and modify this document if you move to a different state.
Advance Health Care Directives for the LGBTQIA+ Community
Executing an advance health care directive allows you to specify medical treatments you want or don't want. It also allows you to name a person, or persons, to make health care decisions for you if you are unable to make them yourself. An advance health care directive can prevent your biological family members from interfering with your partner's ability to make health care decisions for you.
Including a HIPAA form with your advance health care directive is important. The form permits health care professionals to disclose pertinent health information and medical records to your partner.
Wills for the LGBTQIA+ Community
A will allows you to name a person to act as executor of your estate after you pass away. An executor is tasked with producing an inventory of your estate, paying all credible debts, paying remaining taxes, and distributing assets to heirs. In your will, you can indicate to whom each asset should be allocated.
If a same-sex, transgender, or binary couple has children, in which one parent is a biological parent of the children, a will addresses guardianship of the children if the biological parent dies while they are still minors. This can help prevent a custody battle between the surviving parent and the children’s biological parent’s family.
Before finishing your estate plan, you should make sure you tie up any loose ends from any previous committed relationships. If you were in a legal union before same-sex marriage was an option, you might be subject to updated state laws that now consider your previous legal union as a lawful marriage. Some states have automatically converted registered civil unions or domestic partnerships into legal marriages.
Prior to the US Supreme Court’s Obergefell v. Hodges ruling in 2015, some same-sex couples married in states that recognized their marriage but then moved to states that did not recognize their marriage. Some of these couples may have split up without legally dissolving their marriage, believing it was no longer valid in their new home state. Many LGBTQIA+ people are unaware they are still married to former partners. This can lead to the possibility of future claims against their estate from a former partner.
Estate Planning is Important for Everyone
Estate planning can be especially beneficial for non-married LGBTQIA+ couples in a committed relationship. If you and your partner have not properly executed adequate estate plans, state laws will, by default, grant rights to biological family members. This may contradict your wishes.
Members of the LGBTQIA+ community have unique needs that can potentially make estate planning more nuanced. We are happy to meet with you to discuss how to properly document your wishes regarding the inheritance of your assets, who can make decisions for you if you're unable to, and who should care for your minor children if the need arises.