When it comes to protecting your rights as a member of the aging LGBT community, you should consider consulting an estate planning lawyer who can help you make the right choices.  We hear horror stories of life-long partners who are denied access to one another, who lose their homes, or who don’t have access to inheritances upon the death of their spouse or significant other.  Planning in advance can help minimize the chances for these injustices.

There are different ways to protect your partner upon your death.

• Domestic Partnership – As the states go through the rigmarole of determining what does and does not constitute a marriage, there are still some designations that can protect your assets.  In some cases, this is the domestic partnership.  This type of legal declaration can provide the ability to inherit and to make medical decisions.  With the stringency of HIPAA regulations, the designation of “spouse” can be a very important one.
• Power of Attorney – A Cary estate planning lawyer who is familiar with LGBT concerns will likely advise you to go beyond the domestic partnership and also put powers of attorney in place.  These provide even more legal recourse that allows one partner to be responsible for the other in emergencies.  There are both health powers of attorney and financial powers of attorney, and both may be necessary for full protection.
• Wills – In order to circumvent the negative repercussions of a family that is unwilling to deal fairly with a surviving partner, a last will and testament can be an important legal document.  It can also help speed up the probate process and help ensure that your affairs are dealt with in a timely manner. For even greater privacy and protection, you may also want to establish a living trust.
• Beneficiaries – When setting up a bank account or insurance policy, be sure to clearly name your partner as beneficiary.  Otherwise, biological family members (or even previous legal spouses) may have rights to the money, leaving your partner out in the cold.

Of course, these are just some of the situations that may need particular attention from members of the LGBT community.  There are many, many concerns that need to be considered by all members of the aging generation.  Consulting a Cary estate planning lawyer is likely the most efficient and intelligent way to deal with all of these issues.

Ready to get started?  Call our office a call at (919)443-3035 and request a Peace of Mind Planning Session.

I recently posted about the importance of regularly reviewing and updating beneficiary designations for all of your financial accounts, retirement accounts, pensions and life insurance policies.  The recent United States Supreme Court case, Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 497 F.3d 426 (2009),  highlights how critical it is to keep your beneficiary designations up to date.

William Kennedy participated in his employer’s pension plan.  In 1971 William married Liv and in 1974, William updated his beneficiary designation to name Liv as beneficiary of his pension.  William did not name a contingent beneficiary.  In 1994 the couple divorced.  Under the terms of the divorce decree, Liv waived all rights to the pension.  After the divorce, William updated beneficiary designations on other assets to name his daughter as beneficiary, but he neglected to update the beneficiary designation on his pension.

Upon his death, Williams daughter, Kari was appointed as executor of his estate.  Kari requested that the administrator of the pension deliver the funds to her, but the pension administrator refused and instead issued the funds to Liv in accordance with the beneficiary designation.  The Supreme Court upheld the pension adminsitrator’s actions despite the waiver of rights contained in the divorce decree.  The Court did indicate that a Qualified Domestic Relations Order (QDRO) would have been effective in eliminating the spouse’s rights.  Nonetheless, this decision indicates the weight of importance placed on beneficiary designations and highlights the need to keep designations up to date as part of your comprehensive estate plan.

The following story comes from one of my colleagues:

After weathering a difficult divorce, Bob met Mary, the love of his life.  After a year of courtship, Bob and Mary were married.  The couple built a great life together.  Bob was in upper management at a major local company, and Mary was a homemaker who relied on her husband for support.  In their free time, the couple traveled the world together and lived life to the fullest.  Sadly, Bob unexpectedly died of a heart attack.

After the funeral, Mary sought the assistance of an attorney to help with the administration of Bob’s estate.  The attorney sorted through all of Bob’s files and records and discovered that 15 years prior, Bob had taken out a $1 million life insurance policy.  Unfortunately, after his marriage to Mary, Bob had never updated the beneficiary designation and it still named his ex-wife as the recipient of the $1 million life insurance proceeds.

Mary was devastated. She and Bob had been married for over ten years. To make matters worse, Bob’s will was drafted such that all estate taxes were to be paid out of the residuary estate. Mary was the recipient of the residuary estate.  As a result, not only did Mary not receive the proceeds of the life insurance policy, but she had to pay estate taxes on the $1 million life insurance proceeds that were paid to the ex-wife!

It is important to recognize that a will does not dictate how all of your assets will pass upon your death.  Many assets, such as certain bank accounts, IRAs, 401(k)s, retirement accounts, life insurance polcies, etc., use beneficiary designations to indicate who will receive the asset upon your death.  As part of a comprehensive estate plan, it is critical that all of your beneficiary designations are reviewed with your estate planning attorney to ensure that they will operate properly in conjunction with your estate planning documents to achieve your intended result.  In addition, it is crucial that your beneficiary designations be reviewed and updated on a regular basis, preferably at least once per year.