Attorney Ricky Berger speaks about Estate Planning issues for gay marriage. Things to consider like health care proxy specifically when traveling to states which do not recognize same sex marriage.
GAY MARRIAGE
Legal or not, there are significant estate planning issues to consider as a same-sex couple. First, the feds do not YET recognize same-sex marriage and will not until an act of Congress or the U.S. Supreme Court upholds the California’s federal court’s overturning Prop 8.
Here are some issues to consider:
1. You are LEGALLY married in a state that allows it, but your partner is hospitalized in a state where same-sex marriage is not recognized. Without a health care proxy, you may not be able to or be allowed to participate in discussions about or decisions concerning your spouse’s care (or denial of care).
2. Estate taxes. Even in a state where same-sex marriage is recognized, the fact is that the federal tax laws do not afford the marital deduction to same-sex partners. So, when a husband or wife dies the surviving spouse may receive ANY amount of the deceased’s estate totally tax free. That’s how the marital deduction works. Same-sex partners don’t get this tax break so they will pay far more estate taxes than their hetero neighbors. Create trusts for partners and beneficiaries under the age of 18, to make sure they are cared for and (to the extent possible) to reduce taxation wherever/whenever possible.
3. Consider avoiding probate with the use of a Living Trust. A living trust permits the smooth, inexpensive transfer of assets after death, without the court-supervised probate process. It makes it easier for your partner and for your family. In addition, a living trust is much less open to challenge than a will. Courts are less likely to overturn it since you put the living trust into place and lived with it during your lifetime. In addition, a living trust is private so that, after you die, no one except the beneficiaries have the right to know how you allocated your assets.
4. But, certainly if not a Living Trust have a Will. Even in a state recognizing same-sex marriage there is no guarantee that the laws of that state will recognize a same-sex spouse as a spouse for the purpose of intestacy (i.e. how assets are distributed upon death for someone who dies without a will).
5. Make sure to have your plan reviewed more frequently than with your hetero counterparts because the laws are changing and will continue to evolve. Make certain your plan is legally compliant and that it exploits all the legal advantages provided for you to use as you build and maintenance your estate plan.
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