Same-sex couples have faced a myriad of challenges through the decades, and one of them includes estate planning.
One would think that the U.S. Supreme Court's monumental decision in 2015 that legalized same-sex unions would have clarified some matters in this area.
Well, not quite.
Protecting your spouse, children, estate
Like other married couples, LGBT couples have similar goals in estate planning, and that is protecting your spouse, your children and your estate.
But you also must be extra vigilant in other areas, such as dealing with a spouse's family that may contest the will; who do they desire to be beneficiaries for financial accounts; and even having to look into adoption of your children if you are not the biological parent.
Vital issues that need attention
Here are some pertinent issues that couples in same-sex unions must consider:
- Review and update your will to ensure your assets and estate will be inherited by your spouse. If you die without a will, your spouse may not be recognized as the heir. And if there are children from a previous marriage, your assets may go to them and not your spouse.
- Review beneficiary designations, especially retirement accounts and life insurance policies. For 401(k) plans, your spouse may be the default beneficiary, however this is not the case with IRAs.
- Some same-sex parents may need to pursue adoption proceedings as part of their estate planning, because usually only one of the parents is the biological parent of the child.
- Consider a prenuptial agreement before getting married. This may help should you and your spouse decide to separate.
- Look into long-term care insurance.
Consider power of attorney, creating a trust
Besides a will, same-sex couples should consider a power of attorney, which allows your spouse to handle personal business matters on your behalf.
A trust also can provide peace of mind.
A trust allows same-sex couples to determine who will receive specific assets when one of them dies. There's also less opportunity to contest a trust because trusts usually don't go through probate even if you are estranged from your birth family as some LGBT families may be.
Retain an experienced attorney
Please don't improvise when it comes to estate planning.
Since estate planning for same-sex unions has a number of unique challenges, you really need to retain a lawyer with experience in LGBT legal issues. Avoid the do-it-yourself plans that are found online.