Essential Estate Planning Tips for LGBTQ+ Couples
Federal law recognizes same-sex and other queer couples' rights to marriage and its benefits, however, members of the LGBTQ+ community still struggle to see their rights properly upheld across the entirety of the country and need to take specific things into consideration when it comes to estate planning. According to Gallup, since Gay marriage’s passing in 2015, there has been a steady decline in domestic partnerships in same-sex couples from 13% in 2015 to only 6% in 2021.
And while we’ve seen a rise in same-sex marriages, the 2021 Census tells us that out of the 1.2M same-sex couple households, 59% of them are married, leaving 488,871 unmarried same-sex households.
Estate planning is important for everyone, regardless of wealth, sexual orientation, marital status, and family construction but for LGBTQ+ individuals and families, it may be even more crucial.
Estate Planning Considerations for LGBTQ+ Couples
Despite having access to similar laws when it comes to unions, LGBTQ+ couples are still subject to discrimination both in the personal realm and in the legal realm.
Intestacy
Dying intestate means dying without a will. If you and your unmarried partner do not make an estate plan and something happens to either of you, your partner will not be able to access assets, make medical decisions on your behalf, or legally have a say in your funeral plans, amongst other considerations. Further, if you die intestate and are married but move to a state or have assets in a state that does not uphold same-sex marriage laws to the highest degree, your spouse may encounter complications when claiming your estate. The only way to get peace of mind is to put a comprehensive estate plan together.
Children
While most opposite-sex couples can have children that are biologically related to each partner, same-sex couples often need to go through adoption and other legal processes to ensure both partners have legal rights over their children. About 15% of same-sex households have at least one child under 18 living with them. This is important to take into consideration when it comes to estate planning because courts often rule in terms of biology. For instance, if the biological parent dies intestate (meaning without a will in place) and the other parent does not have clear parental rights in place, it is unclear how the courts will rule in terms of guardianship. This is especially true for states in which same-sex/LGBTQ+ unions remain complex legally.
Older LGBTQ+ Partners
Since the federal law was only passed less than a decade ago, many aging and older same-sex couples aren’t married and, therefore, do not have access to the benefits of marriage when it comes to estate planning. Some are in domestic partnerships but said unions are not recognized in the same way across states and offer less protection than marriage when it comes to assets, medical decisions, and more.
Persisting Discrimination
While Gay Marriage was federally legalized on June 26, 2015, some states still “cling to outdated gay marriage bans” and others work to put laws in place to deny equal rights to same-sex and LGBTQ+ couples. The variance in laws across state lines makes it even more important for LGBTQ+ couples to have comprehensive estate plans in place.
Family Opposition
Unfortunately, LGBTQ+ acceptance rates remain a complicated topic and certain families have trouble embracing their queer members. This can become a problem when it comes to estate planning in terms of will or trust contestation.
What Estate Planning Document You and Your LGBTQ+ Partner Need
A Will or Trust
A will is a legal document in which you outline your final wishes, detail how you wish your estate, assets, and property to be distributed between beneficiaries, and leave instructions for the guardianship of your children but it has its limitations. A trust operates similarly in that it is a legal document in which you detail your wishes but it is considered to be a more robust document that provides you with greater flexibility and certainty.
The main difference between a will and a trust is that a trust avoids probate unlike a will and allows for the legal transfer of assets to your beneficiaries. This may be particularly useful if you and your partner, unfortunately, encounter familial conflict regarding your relationship. A trust can help you ensure that no one will be able to contest your wishes, keeping your partner and children safe. Learn more about the difference between a will and a trust, here, and learn more about the various types of trusts, here.
In terms of guardianship, it is very important for you to name your partner as the guardian of your children to ensure your family's well-being should anything happen to you.
Power of Attorney
A power of attorney is a legal document that allows you to authorize someone to make financial decisions on your behalf if you are incapacitated. If your partner has power of attorney over your finances, they will be able to access your bank accounts, pay your bills, and more. Read more about how to assign power of attorney, here.
Health Care Proxy and Advanced Health Directive
Your Health Care Proxy allows you to appoint a person to make health decisions on your behalf should you become incapacitated. Your Advanced Health Care Directive provides your health care proxy and loved ones with guidelines on how you want your health to be managed in order to ensure the decisions they make are in line with your wishes. Learn more about advance directives, here.
The GoodTrust Difference
At GoodTrust, we are committed to democratizing estate planning, making it affordable, simple, and easily updatable. Our Estate+ Plan is a modern plan that provides you and your family with all the necessary estate planning documents you need to build your comprehensive estate plan. Take control of your family’s future and get started here, today!