What same-sex couples need to remember when making an estate plan
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An estate plan lets you prepare for what happens to your assets when you die, as well as what happens if you become incapacitated and can't make decisions for yourself. An estate plan for gay couples is just like an estate plan for other married couples: it covers your loved ones’ inheritance, guardians for a minor child, and other documents like a durable power of attorney.
LGBTQ individuals who are single can generally follow the same principals set out in our estate planning guide for singles, but same-sex couples with children have a few extra steps to make sure their plan is solid.
All states have recognized same-sex marriage since 2015 and the ruling of the civil case Obergefell v. Hodges
Non-biological parents should consider legally adopting their children as their own
If you suspect people will contest the terms of your will and who you leave an inheritance to, you can opt to create a living trust
If you entered into a civil union or domestic partnership before same sex marriage was recognized nationally, you should double check to make sure you know your marital status and dissolved any prior unions. Prior to 2015, same-sex marriage was not recognized universally in the United States, and many gay and lesbian couples entered into civil unions or domestic partnerships. Once the right to marry was guaranteed, some states automatically converted these partnerships and unions into marriages. Creating an estate plan allows you to leave assets to someone other than your spouse, but being married can help make the process easier for your surviving spouse when you do leave them your estate.
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The foundation of any estate plan, a will can include your money, assets, and tangible items, and the beneficiaries who should receive them. The beneficiary of a will can be a spouse, child, or friend, and you can give them specific bequests or even divide your estate into percentages.
Same-sex couples who live in community property states should take care to understand who owns what so they don’t give away assets they don’t own — in these states, property acquired during marriage is equally owned by both spouses.
If you die without a will, then the probate court will determine your heirs. A surviving spouse will inherit at least a portion of your estate, but it may not be the exact amount you wanted; if you and your partner weren’t married, your parents or siblings may be entitled to some of your assets as well. To ensure your loved ones are provided for according to your wishes, you need to get a will.
Your loved ones can inherit certain assets outside of a will if you name a beneficiary to them. LGBTQ individuals who are remarried should pay particular attention to updating their choices if they haven’t already.
Life insurance policy
Retirement plan account if it already has a named beneficiary
Bank account if it already has a named beneficiary
Learn more about beneficiary designation vs. wills.
A will also lets you name a guardian to take care of your minor children, in the event that both parents die. For LGBTQ families, if one spouse is not the child’s biological parent, then they should consider legally adopting them. Becoming the child’s legal parent or “second parent” can help ensure that you have a right to custody if your partner (the biological parent) passes away.
Adoption also makes it so that your children have a legal right to inherit under state intestacy law (intestacy means dying without a will). When someone dies without a will, their estate tends to pass to their spouse and next-of-kin; adopted children are viewed the same as biological children in the eyes of the law.
If you think your family members will disprove of your choices and contest your will after your death, you can more securely transfer your assets to people you want to receive them with an inter vivos trust (also known as a living trust because you create it while you’re alive). Trusts are separate legal entities, and the assets in it won’t be subject to the probate process, unlike assets passed through a will. (It might be harder to challenge the transfer or assets that have already been transferred into your living trust.).
When you get a will with Policygenius, it’ll also come with a living trust.
Trusts can also be tailored to meet your needs, like if you only want your child to receive money when they reach a certain age. Irrevocable trusts, which can’t be changed, have even more options and benefits — like protecting your assets from creditors or meeting the unique estate planning needs of a blended family.
Learn more about different types of trusts.
Since same-sex couples are entitled to the same marital benefits as their heterosexual counterparts, including certain tax advantages. That means that the surviving spouse of an LGBTQ couple can also claim a marital deduction, which allows a person to leave an unlimited amount of assets for their surviving spouse, tax free. This can help gay couples with large and wealthy estates minimize the amount of the estate tax that is owed upon the first spouse’s death. Federal estate tax is only levied on estates worth over $11.7 million in 2021. Keep in mind that only gay couples who are married, and not in civil unions, can claim this deduction, and some states have their own estate tax and inheritance tax, separate from the federal tax.
A good estate plan also covers your future medical care, typically through the following documents (which are types of advance directives):
Durable medical power of attorney: Authorizes someone to make medical decisions on your behalf when you’re incapacitated
Living will: Specifies types of end-of-life care treatment you wish to receive and under what circumstances, like how long you should be kept on a feeding tube
You can also create a financial power of attorney to give someone the legal right to make financial decisions on your behalf.
LGBTQ parents can also consider getting a child power of attorney for situations when they can’t immediately make decisions for their children, like authorizing their health care.
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