While estate planning is important for everyone, no matter the size of your estate, planning for same-sex couples is an absolute necessity. It’s tricky enough navigating the intestacy laws and making the tough decisions about your finances and medical care with the rights and privileges that are automatically bestowed upon married couples. Same-sex couples face a veritable gauntlet just putting themselves into the same position their opposite-sex counterparts enjoy.
While the needs may be more vital, the basic documents that same-sex couples should obtain do not vary much from other estate plans - including wills, powers of attorney, and living wills. Same-sex couples usually require a little additional planning in the form of inter-vivos or testamentary trusts however, to help pass assets to their partner. These are necessary because same-sex couples do not enjoy the benefits of the marital deduction, allowing assets to pass to a spouse tax-free. With the estate tax exemption set to return to $1 million next year, it is very likely that estate tax will come due even on modest estates consisting of a residence, some savings, and life insurance.
As many same-sex couples are aware, family will be given the rights to make decisions before a partner, without specific designations in place. This means that partners won’t be able to make medical or financial decisions for their partner, and in many cases may even be denied hospital visitation. Similarly, an increasing number of same-sex couples are raising children and need to establish clear guardianship designations. This is necessary because many states will not allow both partners to share custody or adopt a child jointly, leaving the child to government care while court battles determine their future.
If you or someone you know is currently in a committed same-sex relationship, encourage them to do some estate planning. And remember, whatever planning you decide to do should be updated as your life and the laws change.
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