While the need for proper estate planning is the same for both traditional and non-traditional families, some of the planning techniques used are different. Same sex couples are not treated the same as traditional married couples for many purposes and while these differences in treatment present challenges, they are not insurmountable with proper planning.
Same sex couples, just like opposite sex couples, must have the four key documents. The four documents include a will, a medical power of attorney, a durable power of attorney and a living will. These documents are the foundation of any estate plan, whether for traditional or non-traditional families.
Non-traditional families must pay special attention to several key areas. Who will make decisions for you if you are unable? What are the tax implications of transfers now and at death? When can beneficiary statements solve the problem? Each of these questions is touched on below and will be covered in depth in a future blog post.
What can same sex or unmarried couples do if they want their partners, instead of their biological relatives, to make decisions on their behalf? This question frequently arises during medical emergencies. Preparing before the emergency strikes will arm your partner or the person of your choosing with the tools necessary to ensure your wishes are honored. A variety of planning techniques are available to meet the needs of your family.
Same sex and unmarried couples are treated differently for tax purposes. They are not eligible for the marital deduction at the death of their partner. They have no community property rights. There is no tax protection for property transfers during life between partners. There are planning tools available to help overcome these hurdles.
Finally, the importance of beneficiary designations cannot be stressed enough. Properly completed beneficiary statements in various financial documents, including life insurance policies and retirement plans can aid in property transfer at death. Beneficiary designations are critical and should be considered in conjunction with the entire estate plan.
Same sex and unmarried couples need to work with an attorney to develop an estate plan that anticipates challenges and delivers the intended results: to honor their relationship with their partner, ensure their partner can make decisions on their behalf if necessary, and to designate their intended beneficiaries.
Law Offices of Debbie J. Cunningham
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