Without taking the proper security measures, your family might not honor wishes they had agreed upon before your death.

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Domestic Partners: Estate and Tax Planning

While estate planning is important for any couple, partners in same-sex relationships need to dot more i’s and cross more t’s than heterosexual married couples do, in order to ensure that their wishes are respected after a death occurs. Despite the fact that your mother gushes over your dompart (domestic partner) when you bring him home for Thanksgiving, she may not feel the same way about him if you leave this life before your mom does. Even good people act strangely and unpredictably when confronted with death. Without the proper protections, your surviving partner could be ordered out of a house the two of you share, or a family member could dispose of your estate in a way you would not approve. Without taking the proper security measures, your family might not honor wishes they had agreed upon before your death.

Despite having a domestic partner agreement and/or having honored your partnership with a ceremonial marriage, LGBT unions lack the protections and benefits of a legal same-sex marriage, especially when it comes to estate planning. Your best approach to LGBT estate planning is to prepare a domestic partner agreement and supplement it with other legal documents and instruments.

One estate-planning instrument is a JTWROS, an acronym meaning “property held in joint tenancy with rights of survivorship.” Read more...

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Domestic Partners: Protecting your assets . . . even when the rules don’t

Planning your financial future involves many different rules and risks. For example, there are rules on how much you can contribute to your IRA and 401k plan each year, rules on sheltering your assets from estate taxes, and rules on how much you and your family members can receive from government retirement programs such as Social Security.

Along with these investment rules come certain investing risks. There is market risk, economic risk, interest rate risk, and inflation risk, just to name a few.

Oftentimes, people enlist the help of a financial advisor to help coordinate their retirement savings and estate planning efforts, ensuring that they follow the rules and avoid as many risks as possible.

But what if you follow the rules, avoid the risks, and build up a nice nest egg, only to discover that there is another set of rules that disqualify you from many of the programs and financial benefits that are available to most other people? If you are in a same-sex relationship, there are indeed rules that can undermine your financial security.

Although all investors face many similar issues, same-sex domestic partners face an additional set of challenges when it comes to saving, transferring, and passing on assets. Read more...