Planning for death or incapacity can be an intimidating task for anyone. However, if you identify as an LGBTQIA+ individual, you may have additional considerations when it comes to protecting yourself, your partner and your family. As a result, it is important to consult with an attorney to discuss your wishes and help ensure that your estate plan takes into account your specific situation. Here are some key points you should understand about estate planning:
Who is legally entitled to inherit your assets?
In 2015, the U.S. Supreme Court legalized same-sex marriage nationwide in Obergefell v. Hodges. Prior to the decision, LGBTQIA+ adults tended to cohabitate and form domestic partnerships. The cohabitation trend shifted to marriage after the Obergefell decision but is now steadily reverting back to cohabitation. If you are not married to your lifetime partner, it may not have many implications in your day-to-day life, but if you die without an estate plan, your partner does not have a right to inherit and can be left with nothing.
Even worse, if you have estranged family members, they may be the ones to inherit in the absence of an estate plan. A study conducted by the Pew Research Center found that nearly 4 out of 10 LGBTQIA+ individuals were rejected by family or friends. Although this study was conducted in 2013 and societal attitudes towards LGBTQIA+ have become increasingly more accepting, rejection by family and friends is still a very real possibility for many LGBTQIA+ individuals today. Therefore, you must create an estate plan that takes these difficult family dynamics into account to prevent an estranged family member inheriting your assets.
What happens to your assets if you die without a will?
Each state has its own intestacy laws. Intestacy governs the distribution of estate property when someone dies without leaving a will. In New York, when a married person dies intestate and without children, their surviving spouse inherits everything. However, if an unmarried person dies intestate and does not have any children during their lifetime, their entire estate is inherited by their parents or siblings if their parents predecease them. If you are unmarried and don’t want this to happen in case you die, you must have a will. A properly drafted will ensures that your assets pass to who you want them to and not who you don’t.
How can you provide for your children?
With a will, you can name the individuals you’d like to inherit your assets, nominate a guardian for any minor children you may have, and name an executor to oversee the distribution of the estate. According to a 2019 survey conducted by the Family Equality Counsel, the percentage of LBGTQIA+ millennials actively planning to grow their families is 48% compared to 55% of non-LGBTQIA+ millennials. This gap is getting smaller probably due to the increasing accessibility of assisted reproductive technology. New York intestacy laws treat adopted children and posthumous children the same as biological children for inheritance purposes. However, absent a will nominating a guardian for minor children, the decision ultimately rests with the court. The courts will not always make the decision you would have, and therefore it is imperative to draft a will when you have minor children.
How can you avoid probate?
While an estate plan typically includes a will, there are other ways to control how your assets pass at your death. In fact, there are benefits to centering your estate plan around assets like trusts, joint ownership accounts and property, life insurance policies, IRAs and other accounts with designated beneficiaries that avoid probate. The primary benefit of having non-probate assets is that they bypass the probate process so the property is available immediately. Further, avoiding the probate process is more cost-effective because court involvement and attorney’s fees are reduced or eliminated entirely. Finally, nonprobate assets transfer without a public proceeding and therefore decedents who leave such assets are afforded a great deal of privacy as opposed to decedents who leave wills to be probated publicly.
What happens if you become incapacitated?
Estate planning doesn’t only include planning for death. You must designate persons you can trust to act as your power of attorney or health care proxy in the event you are incapacitated and cannot make decisions on your own. Choosing someone may be especially difficult for members of the LGBTQIA+ community if they are not close to family members and are not married.
You should also have a living will. Living wills are legal documents that specify certain medical treatments you would or would not want to receive when circumstances render you unable to expressly give informed consent.
Without these documents, a court may need to step in to appoint someone to act on your behalf.
Do you want to donate to charity?
Although the study previously mentioned illustrated that same-sex couples were thinking of expanding their families now more than ever before, there are still many LGBTQIA+ couples who do not have children. Regardless of sexual orientation, many parents leave most, if not all, of their assets to their children at death. In cases where couples do not plan to have children, there are tax saving benefits in leaving some assets to charity. If you are interested in charitable giving, you should talk with an estate planning attorney about how you can maximize your unified credit.
Estate planning is essential to protecting your loved ones. Contact one of our attorneys to discuss your situation.