Regardless of your age, race, gender, or sexual orientation properly protecting your future and your loved ones requires a plan. Without estate planning executed by you, state law will fill in the gaps with default choices for your decision makers and recipients of your money and property. For some members of the LGBT community, both married and unmarried, these default choices could be the last individuals you want acting on your behalf or receiving an inheritance from you. It is our goal to ensure that your personal wishes are carried out and that no one else dictates what should happen with your money, property, or children.

When the US Supreme Court legalized same-sex marriage in 2015 in Obergefell v. Hodges, marriage became an option for same-sex couples. Before then, same-sex couples could choose to enter domestic partnerships as an alternative to marriage. Yet, the way states view married and unmarried couples in a domestic partnership is often quite different. Knowing that your plan specifically appoints the appropriate people to the trusted helper roles (e.g. Independent Executor, Trustee, Power of Attorney Agent, etc.) can bring peace of mind that your plan will be enacted just the way you want it, whether you are a married or unmarried couple.

Estate Planning Issues Unmarried LGBT Couples Face

It is essential to understand the estate planning issues that unmarried LGBT couples face (including those who are not in a valid domestic partnership recognized by state law). Long time readers of this blog know that every state has default rules that address what happens to a person’s property upon their death (intestate provisions) or who can make decisions for a person who is incapacitated and cannot make decisions for themselves (guardianship provisions). For married people, the default person is usually a spouse. But problems such as the following can arise if your significant other is not a legally recognized spouse:

• Being unable to manage your significant other’s financial affairs or speak with institutions or government agencies on their behalf if they become incapacitated (If your partner has not set up a financial power of attorney naming you as their agent, a court will need to appoint someone as guardian to manage their affairs. If there is no spouse, Texas’ default laws usually give priority to a non-minor children, a parent, or another relative when appointing a guardian.)
• Being unable to make medical decisions for your significant other, visit them in a hospital, or obtain healthcare information about them during a serious illness or incapacity (If your partner has not set up a healthcare power of attorney and a living will, there are default laws that specify who is authorized to make those decisions and receive medical information—see the above listed individuals.)
• Losing out on income, government benefits, insurance benefits, or retirement benefits that are exclusive to a deceased person’s surviving spouse
• Paying more in federal estate or gift taxes because there is no marital deduction or exemption for unmarried couples
• Being unable to take advantage of a tax deferral by rolling over retirement accounts because they can be rolled over only by the deceased account owner’s surviving spouse
• Being unable to serve as executor of your deceased partner’s estate if your partner has not created a will and named you to serve in that role.
• Losing property or access to bank accounts after your significant other’s death if your name was not on the title
• Losing custody of your children if you are not their legal parent either through adoption or a legal proceeding giving you parental rights

As this list demonstrates, unmarried couples can face estate planning issues. With that said, there are a few things all couples should consider when thinking about crafting an estate plan. For instance:

A Will is Essential…

Without a will, you will have little control over how your assets are divided or who the guardians of your minor children will be. Assets that have a beneficiary designation, such as life insurance policies, will be distributed according to the designation, but other assets will be distributed according to the intestate succession laws of your state. Intestate succession laws generally do not provide for an unmarried partner, even if the relationship was of long standing.

…But Merely Having a Will May Not be Enough

Legal battles can arise with regard to making medical decisions when you are incapacitated. While your spouse has priority in making medical decisions in Texas, any dispute must be resolved by a court. Family members other than spouses may sometimes differ in their judgment of what is best for the patient. Additionally, a non-spouse partner has no right to make medical decisions absent a properly executed Medical Power of Attorney. A properly executed Medical Power of Attorney can clarify who has the authority to make medical decisions on your behalf.

It’s also important to review beneficiary designations for all of your accounts. For retirement accounts especially, the distribution of funds is governed by the beneficiary designation on file with the investment company, not your will. It’s important to note that spousal consent is often required if you want to name someone else as the primary beneficiary of the policy.

One further note, while a will is a document that is used after you have passed, which lays out your wishes for money and property, you may also consider transferring assets to a living trust, which can help your heirs avoid probate and plan for possible future incapacity.

The Road Ahead

While the years ahead are rather uncertain for many Americans, having a well thought out and comprehensive estate plan can help bring peace of mind to both you and your loved ones. So whether you are married, single, LGBT or straight, there are important estate planning considerations unique to each family. Our experienced estate planning attorneys can help guide you through the estate planning process to create an estate plan that addresses your specific situation. Nielsen Law PLLC provides family-focused estate and business planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information, and to learn about our firm, please contact us. We look forward to working with you.