Estate Planning 101 for LGBTQ+ Couples

Most couples can benefit from estate planning to ensure their assets land in the right hands after they die and their health care wishes are followed. But LGBTQ+ couples might have special situations that require extra planning. Here are six steps couples can take to get started with estate plans.

1. Know your marital status

The Supreme Court’s 2015 decision in Obergefell v. Hodges legalized same-sex marriage in the United States, but the patchwork of prior state laws has had some unintended consequences for estate planning, says Joan M. Burda, an attorney in Lakewood, Ohio, and author of "Estate Planning for Same-Sex Couples." Because assets typically flow directly to a spouse upon death, it’s important to be sure past relationships really are history, she notes.

For example, before 2015, some couples tied the knot in states that recognized their marriages, then moved to states that didn’t recognize those marriages and later broke up. Thinking their nuptials “didn’t count anyway” in the non-legal states, some couples split up but never legally dissolved their marriages, Burda says. On top of that, some states have automatically converted registered domestic partnerships or civil unions into legal marriages.

The result? “There are a lot of people out there who are married and don't know it,” Burda says.

2. Go beyond a will

A will is a no-brainer, especially for couples with kids from previous relationships or those who had children before legally marrying, Burda says. Without one, it’s often unclear where assets should go when the last partner dies, she says.

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A power of attorney is another option couples could consider. A power of attorney gives a spouse or someone else the power to act on your behalf in certain situations. There are different kinds of powers of attorney, and the rules and requirements vary by state. A springing power of attorney, for example, allows someone else to handle your financial matters if you become unable to do it on your own.

Setting up a trust can also be a big help, especially if there are concerns about battles over your assets when you die. Couples can put their assets into the trust, and when one of them dies, there's less of an opportunity to contest it, because trusts typically don't go through probate.

3. Think about medical needs

Facing medical challenges can be stressful enough. In order to avoid further complications, it's especially important to document wishes, Burda says.

There are several options. Two popular ones include:

• A health care surrogate, sometimes called a health care proxy, which is essentially a power of attorney just for medical treatment. This allows someone you choose to make medical or spiritual decisions for you, typically if you're incapacitated. It can also authorize doctors to share your medical information with specific people.

• A living will, a do-not-resuscitate or other kind of health directive, which documents your preferences about medical treatment when you can’t communicate.

4. Plan for the kids

Typically, when parents die, their assets pass to their children. But to ensure everything ends up with the kids, some LGBTQ+ parents may need to make adoption part of their estate planning if they haven’t already, Burda says. This is because sometimes only one of the parents is biologically related to the child.

“Depending on which state they're living in, they may be able to do a second-parent adoption, or it may be called a step-parent adoption, or in some places they're calling them a confirmation adoption,” Burda says. “They’re confirming the fact that the children are related to everybody.”

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The idea is to ensure that the couple’s assets flow to the children rather than to aunts, uncles or other family members.

If only one spouse or partner is legally recognized as the parent, adding a trust with certain provisions can at least ensure the non-legal parent remains in contact with the child if someone else becomes the guardian.

5. Consider consulting a professional

LGBTQ+ couples should generally avoid do-it-yourself estate planning services online, Burda also adds. Most of the forms she sees don’t account for the needs of all couples.

“I don't have a problem with people who have very, very simple situations going to the online sites to do wills and [such], but LGBT couples need to remember that our situation's a little bit different and they need to talk to a lawyer who understands what those potential pitfalls are,” she says.

Consulting with a lawyer who specializes in estate and family law for LGBTQ+ couples can be a great start. The National LGBTQ+ Bar Association and Foundation is just one of several national organizations that can aid folks in the search for legal representation, assistance or advice.

6. Be prepared

The shifting dynamics on the Supreme Court have some legal professionals concerned about what challenges the marriage ruling may face in the future. As such, Burda has one final piece of advice for LGBTQ+ couples: prepare for the uncomfortable possibility that things could change.

"I'm just telling people to err on the side of caution. Consider the worst-case scenario and start protecting yourself. We don't know what's going to happen, so we may as well do something constructive now, early on."