Estate Planning for the LGBT Community

Our firm is very sensitive to the needs of the large LGBT community that helps to make our area a fantastic to live. We should emphasize the fact that estate planning is important for all responsible adults, but it has been especially vital for people that were in committed same-sex relationships.

When you are legally married in the eyes of the law, you and your spouse have certain inherent legal rights. Since same-sex marriages were not recognized, a large segment of our population could not exercise the same rights.

This dynamic was directly related to estate planning, because spouses have very important rights in this context. For example, if you are married and you die without a will, your spouse would inherit all of your community property and half of your separate property. Your parents would inherit the other half of your separate property.

Most people would not be okay with this arrangement, and it is just one of the scenarios that can unfold under intestate succession laws.

The lack of a formal, legally recognized marital relationship could also yield negative consequences from a medical perspective. A spouse would be looked upon as the next of kin of someone that was in a serious medical condition. They would have access and decision-making rights. This would not be the case with unmarried couples.

The Edith Windsor Case

Everything has changed because of the actions of a women named Edith Windsor, who passed away in 2017. She got married to her partner, Thea Spyer, in 2007 in Toronto, Ontario. They were New Yorkers, and the marriage was recognized by the state in 2008.

Spyer died the following year, and she left her spouse an estate that was large enough to be subject to the federal estate tax. Under the tax code, there is an unlimited marital deduction. This allows you to transfer unlimited assets to your spouse in a tax-free manner.

Windsor argued that she should not be required to pay the tax, because she received the inheritance from her spouse. The marriage was legally recognized in Canada, and it was also recognized in the state of New York.

The federal government would have none of it, and she was forced to pay $363,053. Same-sex marriages were not recognized by the federal government because of a provision that was contained within the Defense of Marriage Act, but she filed a lawsuit in an effort to overturn the law.

This case eventually made it to the highest court in the land, and it was decided on June 26, 2013. By a 5-4 majority, the Supreme Court ruled that the Defense of Marriage Act violated the Fifth Amendment to the United States Constitution.

Same-sex marriages have been recognized by the federal government ever since then. As a result, if you are going to be exposed to the estate tax, you can use the marital deduction to gain tax efficiency.

Even though the inherent rights now extend to married members of the LGBT community, you should state your own choices in a legally binding manner. Each situation is different, and there is no one approach that is right for everyone.

This is why it is important to discuss your options with a licensed estate planning attorney.

Download Our Worksheet

We have developed an estate planning worksheet that you can use to gain a more thorough understanding of this important process. It is being offered free of charge, and you can visit our worksheet download page to obtain access to your copy.

Schedule a Consultation!

Now is the time for action if you are currently going through life without an estate plan, regardless of your marital status. You can set up an appointment right now if you give us a call at 310-337-7696. We also have a contact form on this website that you can use to send us a message.