Same-sex marriage advocates are thriving alongside the last decade of equality progress. Now they’re defeating their courtroom opponents with continual ease. Legal acceptance is spreading throughout the country fast thanks to judges striking down States’ discriminatory same-sex bans as unconstitutional. Now 37 states legally recognize same-sex marriage. And that opens a lot of new legal pathways for same-sex couples who live in states where their marriage was previously illegal. One area of legal expansion in a post-DOMA country is estate planning, and it’s easy to get lost in the various opportunities and necessary decisions.
The estate planning challenges facing same-sex couples are somewhat similar to those their heterosexual counterparts deal with, but there are a few unique distinctions. Whether the same-sex couple is legally married or only in a relationship or domestic partnership also plays into the legalities of estate planning.
Akin to the regulations guiding opposite-sex partners, an unmarried same-sex couple needs to heed the Durable Power of Attorney in their estate planning in order to safeguard assets and provide for medical decision-making. They also must validate that inheritance bequeathals are properly executed, and create a living will for unforeseen medical tragedies.
However, that’s where most of the similarities end. A lawfully-wed same-sex couple needs to take extra precautions to verify their affairs are in order because some states handle same-sex marriage benefits differently than the federal government.
U.S. v. Windsor addressed many of the extensive federal questions concerning estate planning benefits and spousal rights. This tackles scenarios like a spouse receiving access to their deceased partner’s 401(k) and unlimited marital deductions. However, should a same-sex couples who are legally married and move to one of the 13 remaining states state that does not recognize their marriage these benefits may not apply. Massive issues such as asset protection, income tax liability, inheritance and succession will surface. Wealth Counsel, an estate planning agency, recommends that one solution to these problems is a properly funded trust. “Whether that’s a revocable living trust, irrevocable trust, or another vehicle, a trust will assure that the couple has in place default inheritance provisions and avoid probate, but it minimizes the likelihood of family conflict and resentments.”
Family conflicts about estates are often unavoidable, regardless of the gender orientation of the marriage. Estate bequeathal has an unfortunate way of bringing out a person’s greed. Consequently, one of the most important choices when planning a post-mortem estate is who to name as the executor and trustee. It’s common for family members to receive this role, whether that’s a spouse, sibling or child. The other option is hiring an estate manager to handle everything.
Being the executor of your will and the trustee of your trust can be a job that lasts for years. Depending on how complicated your assets and securities are your estate will need managing more often than somebody with little fiscal wealth.
With the legal changes arriving for same-sex couples, it’s crucial to understand the new laws affecting their estates. Choosing the right person to explore, explain and double check these complicated procedures is vital to have any final wishes bestowed properly. There are tax and legal documents to file, records to keep, and ongoing financial decisions to make. Once the 13 states refusing to recognize same-sex marriage or partnerships some form of legal unity might come forth. But until then, failing to brush up on these legal changes limits the new civil liberties and tax breaks given to same-sex couples. And that might turn into a hassle for those an estate is bequeathed to.
