Estate Planning for Same Sex Couples

Basic estate planning for heterosexual couples involves creating a Will, Financial Power of Attorney, Medical Power of Attorney and Advanced Health Care Directive. In this traditional plan, each spouse usually leaves money to the other (occasionally in trust for tax planning purposes). On the death of the surviving spouse, everything is left to the children. The surviving spouse is usually executor and trustee of any trusts. If a traditional couple does not create a Will, the state's intestacy scheme will generally send the money in the same direction - but without any trust or tax planning and without an efficient probate scheme. As a result, it is cumbersome, but not the worst result in the world. It is much more important to prepare estate planning documents for same sex couples because the laws for same sex couples vary widely by state, and the federal government does not recognize the validity of a same sex marriages or civil unions for tax purposes or for most other purposes. If one partner dies without a Will, in most states, the state intestacy law will not protect the surviving partner. Additionally, in many states, the partner will have no rights to administer their loved one's estate or act as a guardian.

Since state law will usually not protect the rights of same sex couples, it is imperative for gay and lesbian couples to prepare a Will, Power of Attorney and Health Care Directive. Additionally, trust and tax planning becomes even more important as does coordination of the couple's other assets. This is particularly true if there are children involved.

Even in states where the law is favorable, same sex couples must plan to minimize the federal estate tax, as the unlimited marital deduction only applies to heterosexual couples. Planning must also be done to minimize state estate taxes and state inheritance taxes if the couple is thinking about moving to another jurisdiction.

Most planning for same sex couples is similar to that for heterosexual couples, but the number of techniques that we can use to minimize taxes is greatly reduced as there is no ability to make unlimited gifts to the life partner. Ignoring the issue not only leads to litigation, but a more expensive estate administration process and higher taxes. If you are in a same-sex relationship, it is very important to speak with a competent estate planning attorney in a jurisdiction near you to flush out all the issues that affect you.

For more information on Estate Planning for Same Sex Couples, please visit my blog: Kevin A. Pollock BLAWG

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