Article on Estate Planning for Same-Sex Couples
Gay and lesbian couples may experience a literal vertigo when attempting to understand and implement a comprehensive estate plan designed to protect against the unforeseen death of a partner, or improbable dissolution of their relationship. While no couple wants to think about a partner or, in certain circumstances, a spouse dying, they really do not want to think their relationship might fail. These unfortunate situations, under today’s patchwork of statutory protection mechanisms, test the mettle of a couple’s estate plan and, unfortunately, can prove it ineffective against unexpected tragedy.
The laws of the state and county in which an estate plan is executed or where it is presented for recognition govern the basic elements of any given estate plan, regardless of the sexual orientation of the signatory. However, issues of portability may arise if a gay or lesbian couple has been legally married, or if the state in which they executed their estate plan legally recognizes their relationship in a lesser fashion through a civil union or domestic partnership. The portability conflict appears when that couple moves from a state where their relationship enjoys some form of legal recognition to a state hostile to the interests of gay and lesbian couples.
A basic estate plan is essential for all same-sex couples in order to shore up the gaps in protection that would be afforded to them if they were legally married. More sophisticated estate-planning techniques, such as irrevocable trust vehicles executed to transfer assets from a wealthier partner to a less wealthy partner and private domestic partnership agreements, implicate federal gift tax law in a way that creates inevitable tension between states that recognize same-sex marriage and the federal government—which is prohibited from such recognition by the Defense of Marriage Act.
Historically, the courts that have been designated with the responsibility of interpreting and validating a married gay or lesbian decedent’s estate plan—surrogate’s courts or probate courts, in most circumstances—have faced the same conflict as those involving interracial couples when antimiscegenation laws prohibited such marriages. Many of these courts, located in states which did not recognize interracial marriages, honored those marriages in the context of addressing probate, intestacy, and spousal election issues. As this area of law slowly develops, we may see similar outcomes to those same issues involving same-sex survivors’ estate claims; however, the scarcity of case law in this particular area makes future outcomes difficult to predict.
The role of the nontraditional estate planner may appear to be similar to his or her traditional counterpart; however, a specific understanding of how the law fails to provide for the needs of lesbian, gay, bisexual, and transgender (LGBT) couples is required in order to create a comprehensive estate plan. An intimate knowledge of the clients, their finances, and their relationship to their families is essential in order to predict and forestall potential problems that may arise in the prosecution of their estate through the probate process. Ultimately, the nontraditional estate planner must not only be an advocate for his or her clients but also an educator, ensuring that clients understand the reasoning behind their planning strategy.