There's been a lot discussed and written lately about estate planning for same sex couples, particularly in light of the United States Supreme Court decision in 2015 that legalized same sex marriages.
But in reality, estate planning for same sex couples is not that different that estate planning for anyone else. However, the potential for problems surfacing with same sex couples can be greater given that people in a same sex relationship may be estranged from certain members of their birth family.
One decision involves whether same sex couples should engage in Will planning or Living Trust planning. Many couples like the privacy and simplicity that Living Trust planning brings - primarily avoiding the court-supervised Succession or probate judicial proceeding.
When trusts are discussed with same sex couples, a discussion often takes place regarding they should have one joint trust or two separate trusts. Some couples like the one joint trust because it further indicates they are a married couple who wants to treat their assets as community property. However, some couples prefer two separate trusts because they may each have their own separate assets with separate beneficiaries. For example, one person may want to ultimately leave assets to nieces and nephews, while the other partner or spouse may want to leave their share of the assets to charities or other individuals. If you are a same sex couple engaging in estate planning, talk to your estate planning attorney about whether you should make a trust part of your overall program, and whether you, as a couple, should have one joint trust or two separate trusts.
Incapacity legal planning also is critical for same sex couples. Most people want their same sex partner of spouse to have the legal authority to speak to doctors and make financial decisions in the event of an incapacity. If a same sex couple is not married, then the partner would have no authority to make decisions without the proper legal documentation in place. Again, trusts and powers of attorney done correctly typically takes care of these issues. Living Will Declarations can also allow your wishes to be carried out regarding the withholding of life-support procedures.
Estate taxes typically won't be an issue that couples will have to concern themselves with in the immediate future. Single individuals can have up to $11.2 million in assets without needing to file a federal estate tax return - married couples can potentially exempt $22.4 million. Very few people have that much wealth - so fewer people need to concern themselves with federal estate tax planning.
Whether a same-sex couple is married or not can have significant impact when they name each other as the designated beneficiary of an individual retirement account, or other qualified retirement account. Spouses who are beneficiaries of an IRA follow different rules regarding required distributions than individuals who are not the spouse of the IRA owner.
This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.