Whether you are a senior citizen or an adult with children and/or a partner, implementing an estate plan is an important way to make your wishes clearer.
Estate planning can ensure you receive the end-of-life care you need, protect your assets after you pass away, eliminate conflicts among family members and guarantee the state will not have a say over what happens in your family’s future.
When it comes to financial planning for the LGBTQ community, matters can become more complicated. Many states have not implemented anti-discrimination laws related to housing and health care and do not guarantee the same benefits to same-sex couples.
Here are six estate planning tips to help you decide what course of action to take.
1. Create an Advanced Medical Directive
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An advanced medical directive, also known as a healthcare power of attorney, allows your partner to make medical decisions on your behalf if you become incapacitated. As long as your partner’s name appears on this type of legal document, that person can serve as your representative and call the shots, whether you are legally married or not.
“If you’re ever in a situation where you end up in the hospital, for example, and you want to make sure your partner has access to your medical records and the ability to make decisions if you’re not able to make them yourself, it’s important to have advanced medical directives in place,” said Ashley Dotchin, an attorney who started the estate-planning practice Dotchin Law.
When it comes to LGBTQ estate planning, it’s best to ask a knowledgeable lawyer to write up the document and avoid doing it yourself.
“Downloaded or thoughtless power of attorney documents may not consider severe cognitive impairment, certain life support scenarios, the ability of someone you trust to execute certain legal documents or check in on the beneficiaries of your retirement accounts,” said Brandon Ayers, an attorney at Ayers Rock Planning.
“For the LGBTQ community, this becomes more important when a loving relationship is not recognized for what it is by a government or religious institution like some hospitals or financial institutions.”
2. Name a Financial Power of Attorney
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Along with having a healthcare power of attorney, when it comes to LGBTQ financial planning, partners should consider designating a financial power of attorney (FPOA) as well.
According to David Bross, senior estate planner and shareholder at Truepoint Wealth Counsel, this is a legal document that gives someone the authority to tend to a person’s financial affairs and protect their property.
“The FPOA gives the agent the ability to pay bills, write checks, make deposits, sell or purchase assets or sign any tax returns,” Bross said.
In the absence of an FPOA, no one can act on your behalf. Instead, family members will be required to request the Probate Court appoint a guardian to have these powers.
“The court process can be time-consuming and expensive,” Bross added.
3. Get a Revocable Trust or Will
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To ensure that assets go to the right person or people after they die, LGBTQ partners should set up a revocable trust or will that names specific beneficiaries. A trust is operative as soon as it’s created, while a will is operative when its creator passes away. Either option can ensure that an unmarried partner is not cut out of an estate.
“Everyone should have their wishes memorialized in a revocable trust and/or will, especially LGBTQ partners who are not married,” said Caryn B. Keppler, a partner at Pierro, Connor & Strauss.
Legal fees may vary depending on your location, but ask a lawyer to help you write a draft.
4. Update Your Will and Living Trust as Needed
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Making important decisions when you’re healthy can help your loved ones be protected after your death. It will also ensure that your wishes are carried out as you’d like.
Wills and living trusts need to be updated as circumstances change. Significant life events such as a marriage, divorce or childbirth can be good times to make sure that such documents remain relevant.
Otherwise, your family may want to contest your wishes, which can result in a lengthy legal battle that can ultimately end in a request being denied.
5. Designate a Legal Guardian
In their will, LGBTQ partners can name who will look after their child should one or both of them pass away.
“Estate planning documents can name legal guardians for the couple’s children, if the couple passes away while the children are minors — or if the biological parent passes away and wishes to ensure that their partner, the non-biological parent, has legal guardianship of the child,” said Mara Mahana, a partner at Fox Rothschild.
6. Take Out a Life Insurance Policy
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It’s critical to start paying for life insurance coverage as soon as possible. Then, you can name your partner and/or children as your beneficiary designations, and they won’t have to worry as much about finances when you pass away.
Each partner should also determine their best life insurance options and take out their own policy. “This helps the surviving partner maintain a sustainable standard of living,” said Jonathan Breeden, a family attorney at Breeden Law Office.
Getting Started With LGBTQ Estate Planning
If you have a partner, family or assets, it is never too early to consider estate planning. Make sure you update your documents regularly to ensure they stay current, reflect your wishes and are compliant with the law.
“Estate planning is a huge gift you can give to your family and loved ones,” said Mahana, the partner at Fox Rothschild.
“Ensuring everything is in order in the event of your death will prevent the additional stress and cost of a disorganized estate to your already grieving family. Many estate planners offer free consultations, so interview attorneys in order to find a good fit, and remember to review your estate plan every few years.”
About the Author
Kylie Ora Lobell has more than 10 years of experience writing in the personal finance, legal and business space for publications and brands like MoneyGeek, Legal Management Magazine, LegalZoom, Forbes, EMC, IBM, Dell, Mastercard, Visa and NCR. Her bylines include The Washington Post, The Los Angeles Times, The Jewish Journal of Los Angeles, New York Magazine and Time Out.