The U.S. Supreme Court held that it’s legal to have same-sex marriages, meaning that all states have to recognize it. This means that most legal protections when it comes to the estate planning are now there for same-sex couples.
This includes the automatic right for you to inherit properties from your spouse, the right to make financial or medical decisions for each other, and many other relevant legal considerations can now apply to LGBTQ couples who formally get married or enter into a legally-recognized civil union that is under the law of the state.
But, it still makes sense to understand the basics of what good estate planning is all about regardless of whether or not you are married. Most LGBTQ couples may still have to decide to enter into formal marriage, so they don’t have the legal protection it offers. For these couples, LGBT Estate Planning is crucial to providing for their partners. This article discusses the estate planning fundamentals for same-sex couples.
Your status as a couple
Perhaps, your first priority needs to make sure that there is security for each other when someone passes away first. You should note that the law can do this for you, but it usually depends on your marital status. Therefore, if you are in a civil partnership or married, the law can treat you just like any married couple.
But without a will in place, your civil partner or spouse can automatically inherit your assets according to the intestacy rules. Hence, you need to remember these rules because they can vary depending on whether or not you have kids.
It’s worth mentioning that if you have kids, then your civil partner or spouse can automatically inherit a specific amount of your estate as well as half of any surplus. But if you have no children, then your spouse can inherit everything that you leave behind.
Regardless whether or not you have children, anything your civil partner or spouse inherits from you can be exempt from inheritance tax. And, unused zero rate band allowance for inheritance taxes can be transferred to them when you pass away.
If you haven’t already visited the Registry Office, then things can be a bit different. There is no special inheritance tax privilege and, besides any assets that are owned jointly, there is a specific technical definition when it comes to joint ownership.
In such a case, your partner doesn’t have any automatic right to inherit any asset from you. As a result, this can leave the partner vulnerable when you pass away. For instance, if your house is in your name, then your parents, children, or siblings can inherit it, so this can leave your partner homeless and bereaved.
Regardless of your marital status, you need to have a proper estate plan so that you can control what happens when you die and prioritize financial security for one another.
Your responsibilities as parents
There is a chance that you have children and desire to safeguard their long-term financial security. You should note that the law can automatically operate to provide for them, though this usually depends on which person brought the kids into the world.
Therefore, if each one of you already had a child when you started living together, you may be wondering whether or not you can preserve you child’s inheritance while offering security to your partner or spouse. In such cases, you need to have an estate plan to make sure that you have the best outcome.
If you became parents with assisted conception, it can be a bit complicated. You may want to make sure that your assets can benefit your kids rather than your siblings, parents, or any other family members. But the law that determines who is supposed to inherit when there is no will automatically recognizes adopted and biological children.
Therefore, if your child doesn’t have your DNA, and you didn’t use the adoption process once they were born, you must have an estate plan to make sure that the kids inherit from both of you.
However, non-adoptive and non-biological parents cannot automatically become the guardian of their kid when the other parent passes away. Hence, it makes sense to nominate each other to become testamentary guardian.
This means that if one parent passes away, the family can avoid going through the Children Act proceeding in the courtroom. You should also consider nominating replacement guardians to make sure that you know who may take care of your kids when they are orphaned.
It should be an easy decision to choose to make your will. Every grown-up couple who has responsibilities should always know the importance of having a will in place. But you don’t need to stop at the will. Keep in mind that a will can only help to determine what happens when you pass away.
Therefore, it makes sense for you to control what may happen if you are incapacitated. Unfortunately, incapacity can happen to any person as they age through sudden injuries or illnesses. And, it can become more concerning as a person gets older.
For instance, there are some studies that suggest that one in every six people who are eighty or older usually suffer from dementia.
As a couple, you commit to each other for life, regardless of whether there is good health or sickness, but you need to use some tools to make sure that you fulfill these commitments. This is because the law cannot automatically help you to do this.
Hence, at the very least, you need to find a reputable lawyer who can help you to have the lasting powers. If either one of you is incapacitated, then the other person can continue handling your family finances. Without this in place, you need to make an application to the court to seek permission, which can be a stressful, lengthy, and expensive process.
When one person is unable to communicate or is incapacitated, there can be disagreements over healthcare decisions. The views of siblings and parents can conflict with your views as a couple. And, when this happens, the health and social care professionals make the final decision.