Estate Planning for Same-Sex Couples

The 2015 Supreme Court decision that affirmed the legality of same-sex marriage across the United States is still fairly recent in the country’s history, leaving many same-sex couples without the estate planning documents they need to protect themselves in the event of their partner’s death. It’s important for same-sex couples to set aside time to get familiar with the laws of their state and get the proper estate planning documents in order.

Legal Adoption Papers

One issue that may exist for some same-sex couples is the need for legal adoption papers. If couples use assisted reproductive technology, one partner may be the biological parent of a child. In some states, both parents immediately become the legal parents of a child when it is born. In others, the non-biological parent must go through additional steps to become the child’s legal guardian. Ensure that all of this paperwork is in order. If the biological parent of the child passes, their spouse may have an uphill battle trying to get custody of the child if they haven’t gone through the proper legal avenues—even if they’re the only other parent the child has ever known.

Healthcare Proxy and Power of Attorney

Ensure that you and your spouse have paperwork in place that allows you to make decisions for the other person—if that’s how you choose to set up your estate plan. In many states, the right to make healthcare decisions for your spouse, visit them in the hospital, and receive updates regarding their condition is automatic. However, discrimination still happens, and same-sex spouses may come up against intolerance while trying to exercise these rights. Make sure you have copies of essential documents on hand. Doing so can save precious minutes when your spouse is in critical condition.

In addition to protecting you and your spouse from discrimination by healthcare professionals or administrative staff, these documents are often essential if one or both families do not accept the marriage. There have been cases where one spouse dies and the decedent’s parents attempt to take control of the estate, ignoring the surviving spouse’s rights.

Look Into State Laws

Some states recognize common law marriages. In these situations, couples are considered legally married after living together for a set period of time. However, few states still recognize common law marriages, so some couples do not have the protections they believe they do. Look into your state’s laws regarding marriage as you begin exploring your estate planning needs.

Benefits of Marriage Over Civil Unions

Some same-sex couples choose civil unions in lieu of marriage. Rights vary between states. While civil unions may grant some of the same rights and protections of marriage, a legal marriage definitely has some advantages over a civil union.

• Social Security: If one spouse is at a lower SS level than their spouse and their spouse passes away, they may be able to claim their deceased spouse’s larger SS benefits. This benefit does not exist for couples in civil unions.
• Estate taxes: A surviving spouse does not have to pay taxes on their deceased spouse’s estate if the decedent names them as their beneficiary. Those in civil unions do have to pay taxes if the estate is worth more than $11.2 million.
• Mortgage payoff: If only one spouse is named on the mortgage, the other person may not be asked to repay the remaining balance if the named spouse passes away. In a civil union, the other partner may have to refinance or pay off the mortgage to keep the home.
• Retirement accounts: When a spouse passes away with money in their IRA, the remaining spouse can roll it over into their own IRA without paying penalties. The surviving partner in a civil union must go through extra steps to avoid a lump sum payment that triggers penalties and taxation.

There is one key benefit that civil unions have over marriage: when one partner dies, the other partner is not expected to pay the decedent’s medical bills. In a marriage, the surviving spouse is expected to pay the deceased spouse’s remaining medical bills.

Estate planning should be a priority for all adults. Choosing an estate planning attorney with experience in your specific situation can streamline the process.