Estate Planning & Same Sex Couples (1)

The legal and tax complications that used to face same sex couples in estate planning were wiped away by the recent Federal Supreme Court ruling that honors gay marriage. This one ruling has removed the many barriers that once stood in the way of caring for each other in times of crisis. The law supports the same sex spouse in having the right to be at the deathbed, plan a funeral and have their estate planning documents honored. That means that ALL LGBT couples can create one trust rather than two separate trusts to care for their families.

Now same sex spouses can receive the same retirement benefits as heterosexual couples, avoid double taxation at death, estate tax, and enjoy being named as the spouse on the death certificate. For families with children, they’ll now be able to adopt their step-children and care for everyone in the household. They can be comforted by knowing that the state laws are on their side rather than against them during the most difficult times.

Now that all the “default” probate laws apply, it’s a VERY important time to make sure the estate planning documents are in place. If you don’t write a will or trust, the State writes it for you. Do not assume that you would agree with the will the state has written for you. Find out what would happen by talking to an attorney and then implementing your own plan to care for your family.
Marriage also brings responsibility for our spouses, their debts, healthcare costs and their care. In states like California, were community property is created, it becomes very muddy when one spouse dies if they want to leave some assets to other persons because they can only give away what they actually own. Assets often become commingled during marriage, and only half of each asset belongs to each spouse if it is community property.

For example, if a spouse brings a house into the marriage, it is initially separate property. The week after marriage, the owner spouse writes a check for the mortgage out of the account where she just deposited her paycheck. Now, the ownership of the house is commingled and assumed to be community property. To undo these rules, one would have to create a pre or post-nuptial agreement. Without that at the time of death to clarify ownership, one would have to forensically trace back what the house was worth on the date of marriage.

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