“LGBT families are experiencing major financial implications following Obergefell v. Hodges, a landmark ruling from the United States Supreme Court that made same-sex marriage legal in all 50 states.”
The ruling lets same-sex couples file jointly for tax purposes and changes estate planning because now many requirements of opposite-sex couples are placed upon same-sex couples. This means that estate planning should be straightforward and much easier. The Huffington Post article, “5 Estate Planning Tips LGBT Families Need to Follow in 2016,” has a handful of tips for starting a life with a same-sex partner.
- Make a Will. A will can do several things to protect your assets and wishes when you die. It prevents costly probate issues, properly divides your assets per your wishes and can provide guardianship of your children. If you die without a will in place, intestate succession happens, which varies by state.
- Look at a Prenup. It’s not too romantic to ask your partner after saying “yes” to a marriage proposal to sign a prenuptial agreement. But this agreement lets you enter into a legal and financial arrangement prior to the wedding, and you can avoid some legal issues if you divorce.
- Sign a Power of Attorney. If you’re married, don’t just assume that your spouse is automatically granted power of attorney over your affairs. There needs to be a power of attorney created, and it can be for either or both financial and health care control. If your spouse becomes incapacitated, you’ll be able to make financial and health decisions on his or her behalf. Also, note that while a living will lets you state the kinds of health care you wish to have, a power of attorney allows your spouse to make decisions on your behalf.
- Examine your Estate Tax Liability. The state where you live may have its own estate tax at a low threshold. For federal taxes, estates worth over $5.45 million need to pay federal estate tax.
- Be Ready for the Unexpected. In case the Supreme Court’s decision is overturned in the future or other laws go into effect, it’s critical that your estate planning strategy contemplates as many eventualities as possible. A few documents to consider are a Domestic Partnership Agreement, a Living Will and a Living Trust.
Lastly, your final arrangements should also be detailed while you are alive and should be included in your estate plan.
Reference: Huffington Post (July 13, 2016) “5 Estate Planning Tips LGBT Families Need to Follow in 2016”