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LGBT Estate Planning

Whether you are single, married, or in a domestic partnership, LGBT estate planning requires an understanding of the unique legal issues that impact the LGBT community.

Without estate planning, unmarried couples may have no legal rights if one partner becomes disabled, incapacitated, or passes away. Medical and financial decisions can be taken over by blood-relatives, and a deceased partner’s assets may pass to unintended family members instead of the surviving partner. Having the correct legal documents in place give unmarried couples many of the same rights that married couples have.
In 2015, I had the privilege of co-chairing Colorado’s first LGBT Law Institute, a two-day seminar for attorneys whose practices include LGBT issues. Some of the topics covered were the fall of DOMA, the groundbreaking Edie Windsor case, employment discrimination, estate planning, and immigration issues unique to the LGBT community.

Obergefell v. Hodges
On June 26, 2015, the U.S. Supreme Court issued its opinion in Obergefell v. Hodges, holding that same-sex married couples are entitled to equal protection under the laws, and that their marriages must be recognized nationwide.

All state laws banning same-sex marriage were effectively nullified by this ruling. Same-sex spouses can now enjoy all state tax benefits and other spousal benefits that other married couples enjoy. (Including marriage, divorce, adoption & child custody, separation agreements, marital property, spousal death benefits, inheriting through intestacy, priority rights in guardianship and conservatorship proceedings, contract rights, etc.).

After the Obergefell v. Hodges decision, same-sex couples are afforded the same spousal rights that other couples enjoy. Some of these occur independent of preemptive planning. For example:

  • Adoption or child custody proceedings
  • Divorce proceedings
  • Spousal priority in matters concerning an incapacitated spouse’s care, or recognition in the event guardianship or conservatorship proceedings are necessary
  • Spousal survivorship rights under state pension or other retirement benefits, even in states that previously did not recognize same-sex marriage
  • Spousal inheritance through intestacy (when a spouse dies without a valid Will or Trust)
  • Spousal priority in the event a will or trust proceeding is contested after death
  • The ability to file taxes jointly as a married couple
  • Any other spousal contract right where the contract is construed under the laws of a state that did not recognize the marriage.

Couples Should Still Be Proactive
Simply because states must now recognize marriage does not mean couples do not have to take control of their death and incapacity planning, and clearly state their wishes in enforceable legal documents. All the reasons for proactive estate planning apply just as much to unmarried couples and same-sex married couples as they do to opposite-sex married couples:

  • Expressing their wishes concerning their medical care during periods of incapacity (through durable powers of attorney);
  • Structuring the distribution of their property, possibly in certain protective Trusts, for the benefit of their surviving spouse and children after death;
  • Establishing Trusts to preserve privacy, and to avoid the delay and expense of guardianship or probate proceedings during incapacity and after death;
  • Providing clarity and discretion to a trustee to make strategic tax decisions through Trust administration after death (through various investment powers, and accounting and tax provisions);
  • Providing for family members other than a spouse or child through their estate plans;
  • Making gifts to religious or other charitable organizations through their estates; and
  • Allowing orderly operation and transition of businesses or professional practices through incapacity or death.

Obergefell v. Hodges likely represents the last word on same-sex marriage, elevating these relationships to equal stature with other marriages. While same-sex married couples are now entitled to equal protection under the laws of every state, the efficacy of those laws in ensuring dignity in disability and death, and orderly and structured distribution of property after death is very limited for all couples. Families should always take control of their planning and leave as little to state law interpretation as possible. That is best done through careful estate planning with an attorney who is familiar and comfortable with LGBT estate planning.