Estate planning is a critical aspect of financial planning for everyone, but it holds special significance for members of the LGBTQ community. In the United States, inheritance laws for married heterosexual couples are generally recognized in all 50 states, regardless of where the couple was married. However, inheritance laws for same-sex couples can vary by state. Therefore, there may be fewer legal protections for same-sex couples who are not married or in a registered domestic partnership. States that do not recognize same-sex marriage may prevent same-sex couples from inheriting from each other without a valid will or other estate planning documents in place.
Why Creating a Comprehensive Estate Plan Is Essential
Creating a comprehensive estate plan is essential for LBGTQ individuals to protecting their assets and providing for their loved ones. This includes documents such as wills, trusts, and power of attorney. Therefore, make sure to designate beneficiaries for:
- Financial accounts
- Life insurance policies
- Retirement plans
To follow are essential considerations for LGBTQ estate planning.
Understanding the Differences between Same-Sex Marriage, Domestic Partnership, and Civil Union in Estate Planning
It’s important to understand the legal differences between: same-sex marriage, domestic partnership, and civil union between same sex couples. The benefits and rights guaranteed to couples can vary greatly depending on the state laws where you reside. It’s essential to know what you and your partner are legally entitled to, ensuring your estate plan specifies your wishes as accurately as possible.
Importance of Naming Your Partner or Spouse in LGBTQ Estate Planning Documents
In LGBTQ estate planning, it is crucial to name your partner or spouse in specific legal documents. This will ensure they have the authority to make important decisions for you in the event of incapacity or unavailability. Even if you are legally married, it is important to have certain documents to safeguard your interests and your partner’s. Here are some essential estate planning documents for LGBTQ individuals:
- Living Will – This document explicitly states your end-of-life care wishes in the event of incapacitation.
- Durable Financial Power of Attorney (POA) – This authorizes someone to make financial decisions on your behalf if you are incapacitated or unavailable.
- Medical Power of Attorney (POA) – This grants authority to your partner/spouse to make medical decisions for you if you are unable to do so.
- HIPAA – HIPAA form authorizes healthcare providers to disclose health information to a designated person. It protects privacy and ensures the following of medical wishes.
By having these documents in place, you can ensure that you partner or spouse has the necessary legal authority to make important decisions and carry out their wishes.
A Will Is Essential for Several Reasons
- Protecting their assets: LGBTQ+ individuals may have unique and complex financial situations, such as joint assets with a partner or family members who may contest inheritance. A will can ensure that they distribute their assets according to their wishes and reduce the likelihood of legal battles over inheritance.
- Providing for their loved ones: LGBTQ+ individuals may have non-traditional family structures, such as a partner or close friends who they want to provide for after passing. A will can specify who receives what assets, including personal items that hold sentimental value.
- Naming guardians for dependents: As an LGBTQ+ couple with children, one of the most critical components of estate planning is to ensure that your children are under the care of your partner or spouse. Unfortunately, courts can intervene in guardianship decisions for children. A court may give preference to biological parents or family members. Nominating your partner or spouse as the legal guardian for your children is crucial. This will help to avoid any ambiguity or misinterpretation in the event of your incapacity or death. You can do this by using formal Estate Planning documents (such as a Last Will and Testament) to ensure that your wishes are upheld and the right hands take care of your children.
- Expressing final wishes: A will also includes instructions for final arrangements, such as funeral or cremation preferences, burial location, and other specific requests.
- Avoiding discrimination: Unfortunately, LGBTQ+ individuals may face discrimination from family members or others who may contest their inheritance or ignore their wishes. A will can provide legal documentation of the individual’s wishes and reduce the likelihood of discriminatory actions.
The Importance of Working With an Experienced Estate Planning Attorney
When it comes to estate planning, LGBTQ individuals should seek out an experienced estate planning attorney. Estate planning attorneys understand the unique challenges the LGBTQ community faces. This is especially true for those who live in states that do not recognize same-sex marriage or civil unions. Therefore, additional legal steps may be necessary to ensure that a partner or family member is provided for. It is important to create an estate plan tailored to your specific needs. An experienced attorney can provide guidance and support throughout the process.
Regularly Reviewing and Updating Your Estate Plan
Once an estate plan is in place, it’s essential to review and update it regularly. This will ensure that it remains relevant and reflects your current wishes. LGBTQ individuals may experience changes in their relationships or legal status. This can affect their estate planning needs, making it particularly important to stay up-to-date. Staying up-to-date on your estate plan ensures that you can distribute your assets according to your wishes.
Make Sure You Register Your Will
If you are not married, and a will is not found, the state will use the Intestacy Laws to distribute your estate. People in the LGBTQ community have reported cases where family members make wills disappear if the will doesn’t favor them. If a will disappears, your family members, not your partner (unmarried) will inherit your assets.
Once your estate plan is in place, it’s also a good idea to register it with The U.S. Will Registry. The registry can help ensure that your loved ones can locate your estate planning documents when the time comes. This can give you added peace of mind, knowing that your wishes will be followed.
LGBTQ individuals face challenges that can make it difficult to provide for their loved ones. Estate planning can be crucial in addressing these challenges. By understanding the importance of estate planning, creating key documents like a will and trust, and working with an experienced attorney, LGBTQ individuals can ensure that they protect their assets and provide for their loved ones, even after they pass away.