Planning for Same-Sex Couples

Will planning has fallen into disfavor because:

1. Wills are significantly easier to challenge than trusts.
2. A notice of the proceeding must be given to your closest legal heirs providing them with an opportunity to object.
3. The will is a public record, eliminating privacy.
4. The legal process may be time consuming, possibly delaying the surviving partner’s access to needed funds.

First, for appreciated assets, such as stocks and real estate, there are tax disadvantages to receiving assets from a joint tenant. While inheriting from a will or trust at death eliminates taxable capital gains for the survivor, joint tenancy only eliminates one-half of those capital gains since you are only “inheriting” one-half of the property. Secondly, you may be exposed to the debts and liabilities of your partner. Thirdly, you lose control over where the assets go after your surviving partner dies. Perhaps you may want to provide for your partner for life, but state where the unused assets will go after he or she passes. Finally, once you make your assets joint with your partner, you may have more difficulty in getting those assets back in the event of a divorce or break up in the relationship.

Many of the same considerations apply as in second marriage planning, such as what they will receive when their parent dies and what they will receive when the surviving partner dies, as well as how their rights will be protected in the interim.

Proper legal documents will allow you to designate the person you wish to have control of the arrangements as well as providing in writing the specific type of funeral and burial that you may wish.

Whereas for married couples the combined assets of the couple are available for the care of the ill spouse, such is not the case for unmarried couples. So your assets are legally protected from your partner’s cost of care. Further, while married couples who wish to plan ahead with a Medicaid Asset Protection Trust (MAPT) may not name each other as trustee, such is not the case for unmarried couples. So if you wish to protect your home and life savings from nursing home costs, and cannot obtain long-term care insurance for any reason, you may each establish MAPT’s for each other and need not go outside the relationship to put someone else in charge in order to protect your assets.