Taking Care of Business

Pending court decisions, estate planning remains essential for many LGBT couples.


With the future of marriage equality as yet undecided in many states, estate planning remains a necessity to protect one’s loved ones in many parts of the LGBT community – at least for this year.


Since the Supreme Court struck down the Defense of Marriage Act last year, same-sex marriage bans have been challenged in every state that had them across the country. Decisions in most of these states are still pending appeal although a few, like Illinois, have begun issuing marriage licenses.


But whether same-sex marriages are now legal in your state or remain illegal, it is a good idea to visit with an estate planning attorney to see which options are available to you to protect your loved ones.


Pending final legal decisions in more than half of the states, estate planning is the only way to ensure that the surviving partner in an LGBT couple can have an inheritance, a home or even the right to bury his beloved. This may all change in the next year, but unfortunately, some couples may not be able to wait out their court’s appeals process.


States that do not as yet recognize same-sex unions often will recognize contractual agreements, which offer many of the same protections.


A will is a good place to start, but it does not guarantee a partner’s protection, especially if the deceased’s family did not approve of the union. A will is a public document, available to anyone to read. In states where same-sex unions are not recognized, family members can contest the will of an LGBT couple and have it overturned leaving the partner with nothing.


An alternative is to set up a living trust and transfer all assets envisioned for the partner, such as bank accounts or a home, into that trust. The partner then becomes the trustee in the event of incapacity or death. A trust is private, requiring no court intervention and is harder to overturn than a will.


Another way to document and give legal standing to a LGBT relationship is a domestic partnership agreement, which explains the contractual legal rights and responsibilities of each partner and clarifies ownership and division of property in the event of a break up or the death of your partner.


If a LGBT couple wants to make sure that the surviving partner inherits their home, they should make sure that the warranty deed lists both partners as joint tenants with right of survivorship. Without this specific language many state courts will presume that the partners were tenants in common meaning that the deceased’s share of the property would pass to a legal heir, such as a spouse, child or other biological relative.


It is also important for LGBT couples to name their partners as beneficiaries for IRAs, 401(k)s, life insurance policies and any other investment, savings or retirement accounts if they want them to inherit these funds.


In addition, LGBT couples should think about setting up a health care directive, durable powers of attorney and writing a final arrangements document to ease the burden on their same-sex partners of handling their final arrangements.


A health care directive designates which life prolonging treatments you approve, if any, should you become incapacitated from a terminal illness or permanent vegetative state. Durable powers of attorney can give your partner the right to make health or financial decisions for you if you are unable to speak for yourself. A final arrangements document, while not legally binding, can be helpful if your partner’s burial wishes differ from her family’s tradition.


Finally, LGBT couples with children need to consider what might happen if the natural or legal parent dies. The non-natural parent may be named guardian in the will, but again, wills can be overturned. If, the non-natural parent is also named the trustee of the child’s trust, the trust can specify how often the trustee “meets” with the children, which at least ensures visitation.


If instead, your state now recognizes same-sex marriages, you should consult with an estate planning attorney to find out which estate planning options are now available to you and your spouse. Married couples enjoy a special status in regards to estate and gift tax exemptions and portability. Your estate planner now may be able to offer you a plan that will better protect you and your loved ones.


Richard Barid and Michael Smith are co-founders of Savannah-based Smith Barid LLC, which specializes in elder law, estate planning and special needs planning. They can be reached at 912-352-3999 or richard@smithbarid.com or msmith@smithbarid.com.





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