5 Estate Planning Considerations for LGBTQ Couples

Proper estate planning can be especially important for LGBTQ couples who have unique financial and legal considerations. 

For many families, estate planning can feel like a morbid and daunting responsibility. Perhaps that’s why so many people lack basic estate planning documents.

Yet the truth is everyone needs an estate plan, no matter your net worth or stage of life. This can be especially true for LGBTQ couples, who may have unique circumstances to consider.

If you lack an estate plan or haven’t updated yours in several years, taking steps to document your end-of-life wishes can save your loved ones a great deal of stress and unnecessary conflict. It can also help ensure the efficient distribution of your assets when you pass.

Here are 5 unique estate planning considerations for LGBTQ couples:

#1: Review Estate Planning Documents Drafted Before 2015

The 2015 Obergefell v. Hodges Supreme Court decision required all states to legalize marriage between same-sex couples and recognize marriages that were lawfully performed out of state. Naturally, this decision had significant implications for many LGBTQ couples who previously lacked the same rights and benefits as married couples.

That doesn’t mean same sex married couples need different estate planning documents than opposite sex couples in most cases. However, if you and your spouse created an estate plan prior to 2015, it’s a good idea to review your documents to ensure they contain language consistent with current marriage laws, including portability and marital deduction provisions. This will help protect your beneficiaries and distribute your assets according to your wishes when you pass.

#2: Unmarried LGBTQ Couples Also Need Basic Estate Planning Documents

According to the U.S. Census Bureau, about 42% of same-sex couples are unmarried. If you’ve chosen not to marry your partner, having basic estate planning documents in place is especially important. Otherwise, state laws may not afford your partner certain rights if you pass away or become incapacitated.

The following estate planning documents can help protect you and your family in a worst-case scenario:

• Last will and testament. While both married and unmarried LGBTQ couples can benefit from having a will, it’s especially important for partners who aren’t married. If you die without a will, the intestacy laws of your home state dictate how to distribute your estate. Though laws vary by state, state law disinherits domestic partners in most cases.
• Revocable living trust. A living trust accomplishes many of the same objectives as a will but with certain additional benefits. Primarily, it allows you to bypass the probate process which saves cost and time and affords you more privacy.
• Durable financial power of attorney. Like a health care power of attorney, this legal document designates who can make financial decisions on your behalf in the event you become ill or incapacitated.
• Health care power of attorney/health care proxy. This is a legal document that authorizes your partner to make medical decisions on your behalf if you’re unable to do so yourself. In California, the healthcare power of attorney, living will, and decisions regarding your remains are listed in a single document referred to as an Advanced Healthcare Directive.
• HIPAA privacy authorization form. This form allows doctors and other medical professionals to disclose your health care records and other important information to your health care power of attorney or trustee.
• Living will. A living will specifies your wishes regarding end-of-life care in the event you’re unable to make the decision yourself. In California, this document is often referred to as an advanced healthcare directive.
• Power of attorney to dispose of remains. This document authorizes your partner to carry out your wishes for burial, cremation, organ donation, etc. upon your death.
• Advanced Healthcare Directive. In California, the healthcare power of attorney, living will, and decisions regarding your remains are listed in a single document referred to as an Advanced Healthcare Directive.

#3: Update Beneficiary Forms Periodically

For many people, retirement accounts and life insurance policies comprise the lion’s share of their assets. Thus, it’s important for LGBTQ couples to review your account beneficiary forms as you update your estate plan. Indeed, this designation supersedes whatever you’ve written in your will.

In other words, if you previously named an ex-spouse or partner as beneficiary on your accounts, this person would inherit your assets—even if you’ve named your new partner in your will.

#4: Take Legal Steps to Protect Your Family If You Have Children

In many LGBTQ families, it’s possible that only one parent is the biological parent or that neither is. While laws vary by state, in most cases the biological parent is the one with the legal rights barring legal documentation that says otherwise.

Non-biological parents should strongly consider legally adopting minor children or obtaining a parentage judgment. This helps ensure you have legal rights, so that your family can remain intact if something happens to your spouse or partner.

#5: Consider How Family Dynamics May Impact Your Wishes

Lastly, you may need to consider how your family might react to your end-of-life wishes when the time comes. In many cases society has become increasingly more accepting of LGBTQ families. Yet unfortunately, this isn’t the case with every family.

If you fear this may be the case with your family, it’s even more important to put necessary safeguards in place to protect your partner and children. Unsupportive family members may try to contest your will.  Alternatively, they may initiate a custody battle over children if the biological parent dies.

They may also try to interfere with your spouse’s or partner’s ability to make medical or financial decisions on your behalf. Having the right legal documents in place can help your loved ones avoid this painful process in the event you’re not there to protect them.

An Experienced Advisor Like SageMint Wealth Can Help

Estate planning can be a complex process, especially for LGBTQ families with unique considerations. As you document your end-of-life wishes, be sure to work with an experienced financial advisor and estate planning attorney. They can help you make the best decisions for your assets and loved ones.

SageMint Wealth is a wealth management firm that specializes in the financial and estate planning needs of the LGBTQ community. Our team of financial professionals and legal experts can help you develop a long-term plan to grow, protect, and distribute your wealth. Please contact us to find out more.