Estate Planning for Non-Traditional Families

Nontraditional families take many forms – from a grandmother raising a grandchild via an informal custodial arrangement to a same-sex couple living together in a state that does not recognize same-sex marriage or civil unions.  The U.S. Supreme Court decision in Obergefell v. Hodges (6.26.15) that the Constitution guarantees a right to same-sex marriage means married gay couples obtain all the financial and legal rights and responsibilities of being married, regardless of what state they call home.  However, as to other nontraditional families, the state or federal government does not recognize them as families - accordingly, they are not granted the same benefits that traditional families (and now same-sex married couples) are entitled with respect to estate planning, gift and estate taxes, guardianship of minor children, and health care proxy designations.
Estate Taxes: An Example of the Difference between a Married Couple and a Nontraditional Family
A U.S. citizen does not have to pay any estate taxes on any real estate or assets received from his or her spouse, either as a gift during life or as a bequest after death.  In contrast, the surviving partner of a same-sex couple in a state that does not recognize same-sex marriage may have to pay significant state and federal estate taxes after receiving a bequest from his or her partner.  
As a result of the US Supreme Court decision in United States v. Windsor in June 2013 determining that the federal Defense of Marriage Act is unconstitutional, same-sex couples who are married under state law will qualify for the same tax treatment as traditional opposite-sex married couples (e.g., use of the marital deduction, portability between spouses, gift-splitting and IRA rollover rights).   With the Obergefell decision in June 2015, same-sex married couples will now be on even ground with the rest of married couples. 
Use Estate Planning to Protect Your Nontraditional Family
An experienced estate planning attorney can implement various estate planning strategies to safeguard nontraditional families in matters including:. 
  • Protecting ownership of the family home
  • Protecting custody of the family’s minor children
  • Protecting the surviving partner’s right to manage the finances of the family’s minor children in the event of the other partner’s death
  • Protecting family members’ rights to make medical decisions for their partners and minor children
  • Protecting family members’ rights to make financial decisions in the event one partner becomes incapacitated
  • Ensuring that state probate laws do not override the family’s wishes regarding inheritance
  • Correctly designating beneficiaries on life insurance and other policies
  • Minimizing the impact of estate taxes and income taxes on the surviving partner
  • Planning for and minimizing will contests by family members unhappy with the decisions and bequests made in your will and other estate planning documents
  • Burial instructions, or granting the right over burial decisions to the surviving partner over other blood relatives
At the conclusion of a successful estate planning process, you and your family will be armed with the necessary knowledge and legal documents to ensure that you – and not the government – will control family inheritances and  important decisions impacting your family.

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