Estate planning for same-sex couples
An estate plan is often critical for same-sex couples. Here’s why.
We are updating this article in light of the recent Supreme Court decision on DOMA. Please check back soon for updated content.
Estate Planning can be complex, but is necessary, especially for same- sex couples who may not receive many of the tax and other benefits enjoyed by traditional couples.
As of April 2013, Federal law does not recognize same-sex marriages, regardless of state law, so even married same-sex partners will not receive the same federal income and estate tax treatment as traditional married couples. Plus, many states do not recognize same-sex marriages or domestic partnerships, and those that do may not provide for automatic inheritance to domestic partners.
Considering the challenges, here are some things that same-sex couples should have on their estate planning checklists for consideration.
Will. Without a will, your domestic partner may not be entitled to any of your assets, even assets you may jointly own! Depending on the laws of your state, without a will your “heirs at law” (blood relatives or adopted children) may be designated as heirs instead of your partner.
Revocable Trust. Assets in a revocable trust may pass outside of probate, providing privacy as well as eliminating probate fees.
Cohabitation Agreement. A cohabitation agreement clarifies how money and expenses will be managed during the relationship, and, if necessary, how assets will be divided if the relationship dissolves.
Powers of Attorney. A medical power of attorney is critical if you want your partner to act for you should you become incapacitated.
HIPAA Authorization. Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), physicians and hospitals must have a HIPAA release form on file in order to share your health care information with your partner or activate a medical power of attorney.
Living Will. A living will, also known as Advanced Healthcare Directive, enables you to dictate which medical procedures or treatments you want or don’t want in the event that you are incapacitated.
Funeral, Burial and Remains Planning. Be sure to consider final plans well ahead of time. If not, you run the risk of not being buried next to your partner or your remains not being released to your partner.
Proper Beneficiary Designations. Ensure that beneficiary designations are up-to-date and are in line with your wishes. Be sure to consider banking, investment, and retirement accounts, as well as life insurance policies.
Planning for Minors. If you have young children, they must be identified in all relevant estate planning documents, especially if they are not the legal children of your partner. Special provisions must be made if you want your partner to have primary care for the children in the event of your death.Article is for informational purposes only. You should discuss legal agreements with your own legal and tax advisors. New York Life and its agents and employees do not provide legal or tax advice. Click the ‘Talk to Us’ button to discuss with a local New York Life agent your life insurance needs in the context of your estate planning.