In the 5-4 decision of Obergefell v. Hodges, 574 U.S. ___ (June 26, 2015), the United States Supreme Court ruled that the Fourteenth Amendment to the Constitution gives same-sex couples the right to marry and requires states to recognize a marriage lawfully licensed and performed in another state. While this decision settles the issue of the legality of same-sex marriage in the United States, there will be ongoing litigation for years to come, particularly with regard to the interaction of religious rights and freedom under the First Amendment and rights afforded LGBTQ couples under the Fourteenth Amendment.
Now that LGBTQ couples can marry in any state, has estate planning become less important for them? While a LGBTQ spouse will now have certain rights and privileges he or she may not have previously enjoyed (priorities to inheritances, etc.), the need for estate planning still exists. The reasons for planning for LGBTQ couples are the same as those for traditional married couples: (1) disability planning, (2) probate avoidance, (3) privacy, (4) asset protection, and (5) the ability to control the disposition of their estates upon the death of the first spouse as well as on the death of the surviving spouse.
A health care document, (whether it is known as a health care power of attorney, advance health care directive or health care proxy), is important to give the spouse (or designated third party) the power to make heath care, residency, visitation, and burial decisions for an incapacitated spouse.
A durable power of attorney for property and financial matters provides the spouse (or designated third party) the ability to speak with creditors, government agencies, and other institutions when the incapacitated spouse no longer has the ability to do so. In certain circumstances, it also allows the spouse (or designated third party) to access bank accounts and manage finances when the incapacitated spouse no longer has the ability to do so. A funded revocable living trust allows for a smooth transition in the administration of the trust upon the incapacity of the creator of the trust, commonly referred to as the trustor, settlor, or grantor of the trust.
A funded revocable trust will avoid the need for a probate proceeding upon the death of the trustor, avoiding the publicity and much of the delays and expense attributable to a formal probate proceeding. For LGBTQ couples with large estates, the use of planning strategies involving irrevocable trusts and other entities can save on state and federal estate taxes. Trusts can be structured to afford asset protection for surviving spouses and remainder beneficiaries and to assure inheritances to intended beneficiaries in the event of remarriage of the surviving spouse. For elderly LGBTQ couples, strategies can be employed to preserve estates and obtain government assistance in the event one or both spouses require long-term care assistance in a skilled nursing facility, or in some instances, with assisted living facility or with in-home care providers.
The Obergefell decision may prove troublesome for some LGBTQ surviving spouses or former couples who will now have to contend with spousal election and community property issues they did not have to deal with previously. Because of the retroactive nature of the case, it may result in lawsuits in which a surviving or divorced LGBTQ spouse may be seeking a different judicial outcome than previously ordered or agreed to due to the retroactive change in spousal rights. As with all changes in the law, there may be a bumpy road for a time until these issues are resolved.
In summary, the need for proper planning by LGBTQ couples persists despite the change in the law. LGBTQ couples who previously had an estate plan prepared may need to consult with their estate planning attorney to determine if their plan needs to be updated. Those LGBTQ couples who have not previously put a plan in place have numerous reasons why planning remains an important task that should be completed sooner rather than later.
Our office focuses on all types of estate planning, including planning for LGBTQ couples. We can provide plans ranging from the simple to the complex. We work with married and unmarried individuals and persons of all sexual orientations. As a member of the American Academy of Estate Planning Attorneys, our firm is kept up-to-date with new legal developments, such as the Obergefell case, as they occur. To the extent possible, our planning anticipates upcoming changes in the law and contains flexibility to accommodate change when it occurs. You can get more information about scheduling a complimentary estate planning appointment to discuss planning for married and unmarried LGBTQ and traditional couples by calling our office at (408) 356-9200 or (831) 476-2400.