Many state and federal laws clearly favor and provide special priority or benefit to the opposite gender spouse and blood relatives. Those who are outside those categories have neither rights nor recognition under these laws. Therefore, unmarried and same-gender couples are very unlikely to accomplish their planning goals without knowledgeable professional assistance and counseling.
Examples of where state law generally will produce an undesired result in the absence of planning are:
- Who will be able to make health-care decisions in the event of incapacity?
- Who will be chosen as a partner's guardian if one should be needed?
- Who may take custody of the deceased partner's body?
- Who may direct the burial or cremation and disposition of remains?
- Who will receive the deceased partner's assets?
- Who will get what assets in the event of the dissolution of the partnership?
In addition, unmarried couples without children may have different contingent beneficiaries, which also may necessitate more complex planning.
How to Plan for Unmarried Couples
Revocable Trusts are an excellent tool when planning for unmarried and same-gender couples because these trusts can solve many of the planning dilemmas discussed above. If the trust maker transfers his or her assets to the trust during lifetime, those assets are available to care for the trust maker and/or the partner, as the trust specifies, upon the trust maker's disability during his or her lifetime. If drafted correctly using a support or "HEMS" (Health, Education, Maintenance and Support) provision, upon the trust maker's death the surviving partner can access the trust's assets without subjecting them to additional estate tax at his or her death. Also, the trust maker can determine the ultimate distribution of the trust assets following the death of the surviving partner and even revoke the trust if there is a change in planning goals and objectives. A revocable trust alsoprovides the added benefit of privacy as to the trust maker's beneficiaries.
Due to the numerous statutory provisions favoring opposite-gender spouses and blood relatives, the planning needs of unmarried and same-gender couples are often far greater than the needs of similar married opposite-gender couples. By working together, we can ensure that unmarried and same-gender couples achieve their unique goals and objectives, both during lifetime and after death.