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Elder law and estate planning for LGBTQ Pennsylvanians

On Behalf of | Aug 4, 2020 | Firm News

While some elder law and estate planning tricks and traps are absolutely the same for everyone, LGBTQ spouses and partners face some unique legal challenges. Those legal needs can be met with the right advance knowledge and preparation.  Some of these issues are personal – involving marriage, medical care and children, while others are more financial in nature – concerning money and assets.

For example, everyone should:

  • Make a Financial Power of Attorney to authorize someone you choose to control your financial affairs if you become incapable.
  • Have a Health Care Power Of Attorney and Living Will (also called a Health Care Proxy or Advanced Directive) to specify who will make medical care decisions for you if necessary (including who gets to visit you, or not);
  • Plan for their children’s custody and well-being if parents are deceased.
  • Carefully arrange ownership and beneficiary designations on assets.
  • Prepare a will and/or trust to say who will inherit from you, and who will have the authority to administer your estate; and
  • Attend to tax planning for best bottom-line results after a death or other life event, when appropriate.

Here are some special twists and turns for LGBTQ people to be aware of.

The Obergefell v Hodges case and Supreme Court decision that legalized same-sex marriage everywhere in the US in 2015 changed everything. Now same-sex couples can enjoy the same legal benefits and protections – and negatives – of legal marriage under state laws that were previously available only to hetero couples.

These can include the statutory right to make healthcare decisions for an ill spouse; the right to  tax-advantaged spousal rollover of IRAs and retirement plans;  the right to spousal healthcare benefits; guaranteed spousal beneficiary rights in certain pension plans and accounts;  avoiding or postponing death taxes when inheriting from a deceased spouse under “marital deduction” provisions; Federal Estate Tax portability of unused exemption amounts;  citizenship opportunities for  non-citizen same-sex spouses; etc.

For unmarried LGBTQ couples, the legal risks are more acute.  Here are some tips, in summary form,  for both married and unmarried people.

If planning to marry, make sure to unwind or unravel prior legal relationships like civil unions or domestic partnerships beforehand.

When it comes to children, adoption by both same-sex parents provides the strongest protections if the listed legal or natural parent dies. (If planning to marry and to adopt, check the timing, as adoption before marriage can result in a tax credit that might otherwise be lost.)

Update any old legal planning documents to use correct terms like spouse, husband or wife, when prior wills, POA’s etc. may have used partner, friend, or other references.  Also, in addition to naming the people who you want, you can also disqualify or exclude people you don’t want to be in charge or make decisions for you, in such documents

Important: be sure to execute Healthcare Powers of Attorney and Living Wills naming one another. Without them, a same-sex partner might literally be kept out of a hospital room by hostile family or others, let along being excluded from making healthcare decisions for each other.

Similarly, clear funeral instructions in a Will or even a separate Funeral Directive can prevent having carefully made plans for these most personal and emotional moments hijacked by outsiders.

Carefully check and update ownership or title, and beneficiary designations, on all assets and financial arrangements, including insurance, retirement accounts, investments, and ordinary bank accounts and real estate holdings, to carry out your intent.   Such beneficiary plans and arrangements ordinarily supersede whatever you’ve written in your will. (In another example, for retirement plan governed by Federal ERISA law, a long-separated but still married spouse may have the right to inherit your pension account, even if you tried to name a new beneficiary.)

Finally, change former ownership arrangements as joint owners with right of survivorship, to ownership as spouses instead (“tenancy by the entireties”).

The bottom line is to get help and take action to protect you and your spouse sooner rather than later. Never wait till it’s too late, to protect as much as you can.

At Marks Elder Law, we help people every day with issues like these. I invite your questions and feedback. Please let me know how I can help you and your family