Why LGBTQIA+ People Need Estate Planning

Estate planning is not just for the wealthy or elderly, it’s essential for everyone.

But it can be even more important for the LGBTQIA+ community. Despite same-sex marriages being legally recognized since 2015, couples composed of sexual and gender diverse individuals still face estate planning challenges not encountered by other “traditional” couples.

Key Reasons for Estate Planning in the LGBTQIA+ Community

• Protecting Chosen Family: Without a will or trust, assets often pass to biological relatives, potentially disinheriting partners, close friends, or chosen family members.

  
  

• Medical and Financial Decision-Making: A Durable Power of Attorney and Healthcare Power of Attorney ensure that a chosen partner can make critical health and financial decisions if a person becomes incapacitated.

  
  

• Parental Rights and Guardianship: For non-traditional families, explicit legal documentation is essential to establish guardianship and protect the rights of non-biological or non-adoptive parents.

  
  

• Avoiding Hostile Intestacy Laws: In the absence of a plan, state intestacy laws govern asset distribution, which can result in assets going to estranged or unsupportive relatives.

  
  

• Transgender-Specific Needs: Estate planning can ensure that legal documents respect a person's gender identity, name, and preferred terminology, and can provide specific instructions for handling gender-affirming care.

  
  

• Privacy and Probate Avoidance: A Revocable Living Trust allows for the private, swift transfer of assets, avoiding public, and potentially hostile, court proceedings.

  
  

• Securing Legal Rights for Unmarried Couples: While same-sex marriage is legal, many LGBTQ couples are not married, meaning they lack the automatic inheritance and decision-making rights of legal spouses. This first tip should be a juicy one. It’ll keep your readers with you.

Frequently Asked Questions

What is an estate? Your estate is everything you have accumulated during your lifetime. It comprises not only of your physical property, such as homes, vehicles, and personal property, but also financial assets such as bank accounts, investments, life insurance, and business interests. Your estate also includes any outstanding debts.

What is an estate plan? Your estate plan is a written declaration of how you want your money and property to be distributed when you pass away. An estate plan also details your wishes for what should happen if you become too ill or incapacitated to make personal and financial decisions.

Why do I need an estate plan? Without an estate plan, the state has a plan for you – it’s called intestate succession. However, intestate success laws do not take into account the realities, lived experiences, and make-up of LGBTQIA+ couples and families. Additionally, having an estate plan can enable you to avoid probate, a lengthy and sometimes costly court process that involves taking inventory of your accounts and property, paying off your debts, and distributing the remaining assets to your named beneficiaries.

Estate Planning Documents That Every Family Should Have

• Will: A last will and testament is a cornerstone estate planning document. It details how your property and money are to be distributed following your death and who should be in charge of the distribution process (your estate’s executor or personal representative). It also names a guardian for your minor children if the other parent dies before or at the same time as you. If you do not express your wishes in a will, the state’s intestate succession law will apply.

  
  

• Trusts: A trust is a legal instrument that allows another person to hold and manage your accounts and property for somebody else’s accounts and property owned by the trust or distributed to the trust through a beneficiary designation can avoid probate and, in some instances, estate taxes. For example, instead of leaving money directly to your child, you can place it in a trust and have somebody manage it for them until they reach a certain age. Many types of trusts can be incorporated into an estate plan.

  
  

• Living will or advance directive: A living will or advance directive explains the types of end-of-life treatment you want—and do not want—such as being kept alive by a respirator. It takes effect when you are too ill or incapacitated to communicate your wishes in this regard.

  
  

• Powers of attorney: A power of attorney authorizes another person to make legal decisions on your behalf. In a healthcare power of attorney, you can designate somebody to make medical decisions for you if you become too ill or incapacitated. Similarly, a financial power of attorney lets someone else manage your finances when illness or injury prevents you from doing so.

  
  

• Beneficiary forms: Beneficiary forms allow you to specify who should collect the money from your insurance policy or retirement accounts when you die. Beneficiary forms can override your will, so they should reflect your current intent. Otherwise, a former partner or spouse whom you previously named on a beneficiary form could cash in on your 401(k), IRA, or life insurance policy.

  
  

Family Advocates Are Here to Help

Whatever your sexual orientation or gender identity, it is critical to have an estate plan that gives you control over what happens when you are too ill or incapacitated to make personal decisions and when you pass away.

At Family Advocates, we are committed to creating a plan that is unique to your needs.

For questions about LGBTQ+ estate planning or to get started on your plan, contact Jaime Gher, a knowledgeable California estate planning attorney, at www.family-advocates.com to schedule a consultation.