While the United States Supreme Court’s landmark decision in the 2015 case of Obergefell v. Hodges confirmed same-sex couples’ Constitutional right to marry under the Fourteenth Amendment, both married and unmarried same-sex couples continue to face unique challenges with regard to asserting and protecting many of the legal rights that opposite-sex couples take for granted. In addition, while Obergefell v. Hodges is the current law of the land, as the Justices sitting on the Supreme Court are gradually replaced, there remains the possibility that the recognition of same-sex marriages in America could once again become an issue of debate and uncertainty.
All of this means that, for same-sex couples, crafting a sound-but-flexible estate plan takes on heightened importance. While the estate planning tools that are available to same-sex and opposite-sex couples are generally the same, planning within the context of a same-sex relationship involves some unique considerations.
All Same-Sex (and Opposite-Sex) Couples Should Have an Estate Plan
To begin, let’s talk about what happens if a same-sex partner or spouse dies without an estate plan. In this situation, the distribution of assets is governed by the law of intestate succession (“intestate” is the legal term for, “without a will”). For unmarried couples, this generally means that the deceased partner’s assets will be passed to his or her surviving blood relatives – this is the same for same-sex and opposite-sex couples. Intestate succession laws vary by state, so knowing exactly what would happen requires an examination of the specific state law that applies.
For married couples, in most circumstances, when one spouse dies, the laws of intestate succession entitle the surviving spouse to a substantial portion – if not all – of the deceased spouse’s estate. However, (i) when the surviving spouse is only entitled to a portion, determining which portion is rarely a simple process; and, (ii) if the state of the law regarding same-sex marriage changes, dying intestate could lead to substantial uncertainty regarding a same-sex spouse’s rights during the probate process.
Speaking of probate – the costs, time commitment, emotional burdens, and inherent uncertainty of the probate process all provide strong incentives to have an estate plan as well. While wills are subject to probate (more on this later), there are numerous estate planning tools that same-sex couples can use to avoid going through probate after one spouse’s death.
While distribution of assets is often thought of as the primary purpose of estate planning, it is by no means the only reason why all same-sex couples should have an estate plan. With comprehensive estate planning, same-sex couples can also:
- Provide guidance for healthcare decision-making in the event of incapacity
- Provide for guardianship of the couple’s minor children
- Achieve philanthropic and charitable goals
- Clearly communicate their wishes regarding funeral and burial arrangements
- Minimize their estates’ tax obligations after death
Being Comprehensive and Consistent are Keys to Effective Estate Planning
If you own a home, are saving for retirement, or have life insurance through your job, there is a good chance that you have already done some estate planning – even if you did not know it. You may have unknowingly made certain decisions (particularly with regard to ownership of your home), and you may have casually appointed certain beneficiaries without putting much thought into how you truly want to distribute your estate.
When you bought your home, did you title it in your own name, or in your name and your partner’s name jointly? If you were married at the time, did you title the property as “joint tenants” or “tenants by the entirety.” While this may all sound like unnecessarily-complicated legalese (and, indeed it is), it can also have significant implications for what happens to your home after you or your spouse’s death.
When you started your retirement savings account or opened your life insurance policy, who did you name as your beneficiary (or beneficiaries)? Do you remember? These are legally-binding decisions, and they are often made in a matter of seconds while filling out paperwork at the start of a new job.
These examples are intended to show that (i) you may have already made certain decisions that will impact the distribution of your estate, and (ii) there are lots of factors that go into creating a comprehensive and consistent estate plan. When putting your plan together, one of the first steps should be to create a list of all of the documentation that already exists which has estate planning implications. Fortunately, it is not too late to make changes; and, if you wish to replace a previously-named beneficiary with your same-sex partner or spouse, this is something that can be done during the formal estate planning process.
Beginner’s Tips for Same-Sex Estate Planning
So, you know you need an estate plan, and you know that it needs to address a wide variety of topics while providing consistent direction for your partner or spouse and other family members after your death. Now, how do you make it happen?
1. Start Thinking About What You Want
When most people begin the estate planning process, they have general ideas like, “I want my children to have certain keepsakes and I want my spouse to keep everything else.” Or they might want to ensure that some of their savings go to charity. While these are good places to start, you will need to get much more specific as you begin to formulate your estate plan. Which keepsakes should remain with which of your children? How much do you want to leave to charity? What if something unexpected happens and you do not have as much savings as you currently expect when you die? Answering these types of questions will help you start to see the bigger picture and make decisions that will protect your wealth and your family for decades to come.
2. Consider the Various Estate Planning Tools that are Available
Despite its limitations with regard to distributing assets, the will remains an important tool for a variety of estate planning purposes. While using a will to distribute assets is generally undesirable because it means that your loved ones will be forced to go through the court-administered probate process, a will can still be an efficient tool for purposes of establishing guardianship, communicating final wishes, and ensuring that any assets that fall outside of your other estate planning documents will still be governed by your estate plan (as opposed to the laws of intestate succession).
In addition to a will, most same-sex couples will benefit from using one or more of various forms of trust. The revocable living trust is a popular option for a variety of reasons, and irrevocable trusts can serve special purposes while also providing enhanced asset protection. Foundations, powers of attorney, advance health care directives, beneficiary designations, and insurance policies are all useful estate planning tools under the right circumstances as well.
3. Understand that Plans Change
Finally, many people assume that once they create an estate plan, their plan is set in stone. As a result, they wait far too long before putting a plan in place. But, the reality is that it is never too early to plan for life’s unexpected events, and you can craft an estate plan that gives you the flexibility you need since family, financial, and legal circumstances can change over time.
Learn More about Same-Sex Estate Planning
If you would like more information about same-sex estate planning, you can contact Jiah Kim & Associates for an initial consultation. To schedule an appointment at your convenience, please call (646) 389-5065 or get on our calendar today.
This blog post is written for educational and general information purposes only, and does not constitute specific legal advice. You understand that there is no attorney-client relationship between you and the blog publisher. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.