Same-sex couples have unique concerns when creating an estate plan. Here are six estate planning issues that same-sex couples should consider, and some resources for further help.
Read more about Estate Planning for Gay Couples.
A will is the heart of any estate plan. It is a simple, powerful, and relatively inexpensive document that you may be able to make yourself. With a will, you can :
You can also use your will to name a caretaker for a pet, direct how taxes should be paid, forgive debts, and more.
If you do not make a will, you will die intestate, and your property will be distributed according to the intestate succession laws of your state. Dying intestate almost always has an undesirable effect. This is especially true for same-sex couples because intestate succession laws rely on the legal relationships of marriage – so if you are not married, or cannot get married in your state, intestate succession laws may leave your partner with no right to your property. Learn more about Intestate Succession.
You can make a simple will yourself with a quality will-making program like Quicken WillMaker Plus. If you want a more complicated will, see a lawyer for help.
Learn more about Wills on Nolo.com.
Probate is the court process of wrapping up your estate. Probate can be a long and expensive process, and it is rarely a benefit to the estate. There are ways to avoid probate, and many estate plans focus on doing so.
Avoiding probate may be more complicated for same-sex couples because, in most states, they cannot take advantage of laws that allow property to pass to spouses without probate.
You can avoid probate by using these estate planning tools:
Additionally, most states have simplified probate procedures for small estates. So if you don’t have much property, you may not need to plan for probate at all. Learn more about Probate Shortcuts in Your State.
Health care directives let you set out your wishes for end-of-life health care, in case you cannot speak for yourself. There are two pieces to a health care directive:
Health care directives are a vital aspect of a same-sex couple’s estate plan, because they give healthcare professional clear and legal instructions for providing care – without room for any speculation about the legality of the couple’s relationship.
Learn more about Health Care Directives.
With a financial power of attorney, you give another person power over your finances. You can make a limited power of attorney for a specific purpose or time, or a durable power of attorney, in which you name someone to take care of your finances in case you become incapacitated and can’t take care of them yourself.
If you anticipate incapacity, or just want to make sure that your partner is named to take care of your finances in case of emergency, consider making a durable power of attorney.
Learn more about Financial Powers of Attorney and how Health Care Directives and Financial Powers of Attorney can work together to protect you and your partner.
Most people do not have to worry about estate taxes. But if you do, you and your partner may want to use your estate plan to reduce your estate tax liability.
Only estates worth more than $5.45 million will pay federal estate tax in 2016. So, if you die in 2016, and you leave taxable assets worth less than $5.45 million, you don’t need to worry about federal estate tax. And all assets left to a surviving spouse -- including a validly married spouse of the same sex -- are exempt from federal estate tax.
One caveat: Find out whether your state has its own estate tax. Of the states that do, most exempt less than the federal government does. So, your estate could end up owing state estate tax, even if it doesn’t owe federal estate tax. Read State Estate Taxes to learn about the estate tax in your state.
If you are worried about estate taxes, you and your partner should see a lawyer or tax professional to discuss how to reduce them. For example, if you and your partner are married, leaving everything to each other, and are worried that your combined estate may cause the surviving spouse to owe estate tax, you can use the "portability" provision of the tax law, or use a bypass trust to give the surviving spouse access to the first spouse’s property, without having that property included in his or her taxable estate. Learn more about reducing estate taxes in the Estate Tax section of Nolo.com.
As part of your estate plan, you and your partner should also consider making a final arrangements document. In this document, you lay out your wishes and plans for your final arrangements. You can specify your wishes, in as much detail as you choose, about:
While this document is not legally binding, it can come as great relief to those who must take care of these details after you die. Knowing what you wanted can calm concerns and put to rest any questions about your final wishes. This may be of particular help to your partner if you anticipate that other people in your life may have strong opinions about how to lay you to rest.
A final arrangements document is one of many documents available with Quicken WillMaker Plus. This program – with which you can also make a will, healthcare directive, and financial power of attorney -- walks you through all of the issues listed above, allowing you to leave as much or as little detail as you like about your final wishes.
Learn more about how to Protect Your Relationship: Taxes, Estate Planning & More.
Learn more about Tax Issues for Same-Sex Couples.
Learn more about legal issues affecting same-sex couples in the LGBT Law section on Nolo.com.
Many laws affecting same-sex couples are state-specific, so it’s a good idea to see a local lawyer who specializes in estate planning for same-sex couples to help you. To find a lawyer, ask friends for references or search Nolo’s Lawyer Directory.