Estate planning is difficult under the best of circumstances. No one wants to think ahead to their own death and what it means for the loved ones they’ve left behind. But estate planning is an important and responsible thing to do. It’s especially important when it comes to same-sex couples, who not only don’t enjoy the typical benefits married couples have, but who don’t get any of the legal protections and benefits given to married couple when one spouse dies.
Why Bother with Estate Planning
When married people purchase a home together, the law keeps tax from becoming a burden. They enjoy the benefit of their marriage in being able to share property, and give each other expensive gifts, without tax consequences.
Same-sex couples have no such privilege. The tax burden could be extreme, especially on an expensive gift or an attempt to add the other partner’s name to a bank account or property title. Financial planning and estate planning can help with these issues. Every benefit given to married couples must be acquired for same-sex couples through legal planning and paperwork.
Even in states where same-sex couples can be recognized as domestic partners, or where gay marriage is allowed like in Massachusetts, the federal government recognizes no such legal partnership. Estate planning and careful legal documents are required to give same-sex couples similar rights as married couples when it comes to their property and rights.
The need for wills or trusts is crucial, so that each partner can name who will be responsible for his or her final arrangements, who will receive their assets, who will become responsible for any children and who will handle the estate. Without a will naming the remaining partner in any of these capacities, everything will legally fall to the next of kin.
Power of Attorney
Careful legal planning isn’t just designed to help one partner after the death of the other, though. If one partner should be hospitalized, be admitted to a nursing home, need long-term care, or need someone to make medical decisions on his or her behalf, the person’s partner will need to have been given the legal right to do so. Even in a state where you are recognized as the domestic partner, you don’t automatically have the rights that a legal spouse in a heterosexual marriage would be granted.
Other reasons for careful financial planning include the possibly that the relationship will end. Unlike married couples, same-sex couples don’t get legal divorces in which assets and custody are decided at the end of a marriage. A partnership agreement that’s very similar to a nuptial agreement, which should be part of your legal and financial planning, will outline who gets what, and any agreements about children, their support and even visitation rights.