In 2015, LGBTQ+ and same-sex couples were permitted to legally marry throughout the country as a result of the United States Supreme Court ruling in Obergefell v. Hodges. However, while this meant that estate planning for these couples would now be similar to the process for other married couples, estate planning is particularly vital for unmarried LGBTQ+ couples. To learn about estate planning for LGBTQ+ couples, consider contacting a San Francisco estate planning attorney from Von Rock Law by calling (866) 720-0195 to schedule a consultation.
What Is Estate Planning?
Estate planning refers to the process whereby individuals anticipate and arrange the distribution and management of their assets during their lifetime to prepare for their death or incapacity. This process usually involves bequeathing an individual’s assets to loved ones, heirs, or chosen charities.
What Are the 4 Pillars of Estate Planning?
There are several protections available in the estate planning process, and one of these protections is a Last Will and Testament (will). According to the American Bar Association, a will is one of the most crucial documents associated with estate planning. Including wills, the pillars of estate planning are:
- Wills and trusts: These are crucial aspects of an individual’s estate plan that enable the direct distribution of property and assets to the intended beneficiaries after the individual’s death.
- Durable power of attorney: This refers to an individual’s authorization of a trusted person to manage legal and financial affairs when the individual can no longer perform this function.
- Advance healthcare directives: These legal documents specify an individual’s medical care preferences for a time when the individual can no longer make these decisions.
- Beneficiary designations: These refer to assets that transfer to beneficiaries directly, regardless of the terms of a will, such as financial or retirement accounts and the proceeds from a life insurance policy.
What Assets Should Be Considered When Planning Your Estate?
The most crucial assets to include in an estate plan are:
- Money, including checking and savings accounts
- Investments, such as stocks and bonds
- Real estate, including property and land
- Guardianship considerations concerning children and pets
- Business interests
- Other assets, including family heirlooms, jewelry, art, collections, or cars
What Are the Most Important Purposes of Estate Planning?
Estate planning is important to many people for many different reasons. A California estate planning attorney at Von Rock Law may be able to explain more about the importance of estate planning for LGBTQ+ couples. Some of the main reasons to create an estate plan include:
- Avoiding probate: This refers to the costly and time-consuming process of having the probate court validate a deceased person’s will, value the person’s assets, pay outstanding taxes and bills, and distribute the remaining assets to the person’s beneficiaries.
- Minimizing estate taxes: Careful estate planning can reduce or eliminate inheritance and estate taxes, maximizing the value of the assets left to beneficiaries.
- Preventing confusion: Estate planning can help avoid family arguments due to confusion concerning a deceased or incapacitated individual’s wishes.
- Protecting beneficiaries: Estate plans help to protect dependents by appointing a conservator or guardian and safeguard adult beneficiaries from creditors, divorcing spouses, outside influences, and poor decision-making.
Estate Planning Tips for Unmarried LGBTQ+ Couples
Estate planning for unmarried LGBTQ+ couples is particularly crucial, as it can help to ensure recognition of the relationship after one partner’s death and ensure that the surviving partner will receive similar benefits to those of a surviving spouse. The following are some estate planning tips for unmarried LGBTQ+ couples:
- Produce a living trust or will: These key estate planning documents are relatively inexpensive and easy to create. Without one, state intestacy laws determine who inherits what, meaning that a surviving partner may wait years to get anything or might receive nothing at all.
- Try to avoid probate: This is normally achieved by using living trusts or other estate planning tools, such as joint ownership or transfer-on-death deeds, registrations, and accounts.
- Set a healthcare directive: This is particularly useful if one or both partners’ families are not aware of the relationship or have decided not to accept it, as the directive will enable one partner to make key medical decisions on the other partner’s behalf.
- Create a financial power of attorney: This can be an effective way of ensuring that one partner can take care of the other partner’s finances and legal matters if there is an emergency.
- Write a final arrangements document: While not legally binding, this document can help to prevent arguments between the deceased individual’s partner and relatives concerning final arrangement wishes. Typically, the document covers the deceased person’s plans regarding cremation or burial, embalming, urns and caskets, burial markers or headstones, ceremonies, and payments.
Estate Planning Tips for Married LGBTQ+ Couples
Married LGBTQ+ couples may still want to consider the following tips when planning their estates:
- Review beneficiary designations: During divorce proceedings,many individuals remove former partners as beneficiaries from their accounts as part of the legal process. However, since LGBTQ+ couples could only marry recently, any previous relationships were unlikely to end in divorce, meaning that there is no formal process for splitting assets and adjusting beneficiary designations. In light of this, married LGBTQ+ couples may want to check their accounts to make sure the beneficiary designations are correct.
- Include potential no-contest clauses: When added to a living trust or will, these clauses state that if someone challenges the validity of a trust or will in court and loses the claim, that person will inherit nothing. These can be useful clauses to include for LGBTQ+ couples with disgruntled relatives, but they are not enforceable in all states.
- Consider any children: LGBTQ+ couples might want to think about what will happen to their children after one partner dies and what the children stand to inherit. This is particularly crucial for married couples in which one partner is not a legal parent.
Contact a California Estate Planning Attorney
Learning about the potential challenges associated with estate planning and the protections available can be beneficial for LGBTQ+ couples. If you would like to understand more about estate planning for LGBTQ+ couples and get help with the estate planning process, consider contacting an experienced California estate planning attorney from Von Rock Law by calling (866) 720-0195 to schedule a consultation today.
