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Estate Planning Essentials for Same-Sex Couples

Future-proofing your LGBT Family

Estate Planning Essentials for Same-Sex Couples

How to avoid the four most common estate planning pitfalls that can affect same-sex couples.

Lgbt family Estate Planning Essentials for Same-Sex Couples Future-Proofing Your LGBT Family Estate Planning Essentials for Same-Sex Couples Find out more... Contact us Today How to avoid the four most common estate planning pitfalls that can affect same-sex couples.

An estate plan is a good idea for most couples, not only to make sure that their assets are inherited as they would prefer, but also to make sure their affairs are under control in the event of ill health. However, same-sex couples can sometimes encounter special circumstances that require a little extra thought. Here are four essential estate planning considerations for same sex couples:

1. Your Status as a Couple

Your first priority will probably be to ensure security for each other, whoever happens to pass away first. Whether the law will do this for you automatically depends on your marital status.

If you are married or in a civil partnership, the law treats you the same as every married couple. Without a Will, your spouse/civil partner will automatically inherit from you according to the intestacy rules, and it’s worthwhile remembering what those rules are, because they differ according to whether or not you have children.

If you have children, your spouse/civil partner will automatically inherit the first £250,000 of your estate, and half of any surplus. If you don’t have children, your better half will inherit everything you leave behind. Children or not, anything your spouse or civil partner inherits from you will be exempt from Inheritance Tax, and your unused Nil Rate Band allowance for Inheritance Tax will be transferred to them on your death.

But if you haven’t taken a trip to the Registry Office, things are rather different. There are no special Inheritance Tax privileges and, aside from any assets that you own jointly – there’s a very specific technical definition of “joint ownership” in this context, by the way - your partner has no automatic right to inherit anything from you. This can leave your partner vulnerable in the event of your death. For example, if your home is in your sole name, your children, parents or even your siblings may inherit it, leaving your partner both bereaved and homeless.

Whatever your marital status, a proper estate plan will enable you to control what happens in the event of either of your deaths and prioritise financial security for each other.  

2. Your Responsibilities as Parents

If you have children, safeguarding their long-term financial security will be every bit as important to you. Will the law operate automatically to provide for them?  That can often depend on which of you actually brought your children into the world.

If either of you was already a parent when you got together, the central question, as for many blended families, will probably be: “can I preserve my kids’ inheritance while still providing security for my other half?”. The answer to that question is “yes”, but only if you set up an estate plan to ensure your preferred outcome. 

If you’ve embraced parenthood with assisted conception, it’s more complicated. You’ll probably want to ensure that your assets eventually benefit your children instead of your parents, siblings or other family members.  However, the law determining who inherits without a Will only automatically recognises biological and adopted children. So, if your child doesn't carry your DNA, and you didn't go through the adoption process when they were born, you’ll need to make an estate plan to ensure they’ll inherit from both of you.

Unfortunately, a non-biological and non-adoptive parent doesn’t automatically become the guardian of their child if the other parent dies. So, it’s sensible to nominate each other as Testamentary Guardian. If one of you dies, this will spare the family the added stress of having to go through Children Act proceedings in court. Take the time also to consider and nominate replacement guardians, so that you have the peace of mind of knowing who would take care of your children if they were tragically orphaned.

3. Incapacity

Deciding to make your Wills is a no-brainer for every grown-up couple with responsibilities.  But if you stop there, the job’s not complete. You Will is only going to determine what happens when you die. You also need to control what would happen if you were incapacitated. Incapacity can suddenly befall any of us at any age, through sudden serious illness or injury. And it becomes more of a concern as we get older – for example, one in every six people aged eighty or older suffers from dementia. 

You’ve committed to each other for life, in sickness and in health, but you need the tools to make good on that commitment, because – you guessed it - the law doesn't automatically enable you to do so.  

So, at the very least, consider making Lasting Powers of Attorney for Property & Financial Affairs, nominating each other as Attorneys. Then, if either of you were incapacitated, the other could carry on taking care of the family finances on behalf of you both. Without this safeguard in place, they’d have to apply to the Court of Protection, which is a lengthy, stressful and expensive process.

4. Medical Needs

When one partner is incapacitated or unable to communicate, unfortunately there is a great deal of scope for disagreement over healthcare decisions. Parents' and siblings’ views can conflict with your preferences as a couple, and when that happens, the final decision rests with health and social care professionals, who must attempt to decide what is in their patient’s best interests.

It’s not a nice thought that your fate could ultimately be decided by a stranger rather than your other half. There are two safeguards you can deploy. If you make a Lasting Power of Attorney for Health & Welfare, nominating your spouse or partner as your Attorney, they will have the final say on decisions about your care if you are incapacitated. And a Living Will, also known as an Advance Directive, will document your preferences about medical treatment when you can’t communicate, prioritizing your comfort and dignity over other considerations.

Don’t Wing It

As you can see, there are legal nuances that can have problematic consequences for same- sex couples without a coherent estate plan. So, doing nothing and letting the chips fall as they may really isn't a wise choice. Start formulating your estate plan by having a frank discussion with an estate planner about your unique family circumstances and the assets you own. This will help you to identify areas of concern and make rational decisions, so that you can make your precious family truly future-proof.  

To begin the process, just give us a call or complete the contact form below. We’re here to help.  

"I decided to get advice about making my will because I was about to travel abroad with my children for the first time in many years. My financial advisor recommended Will Written. I appreciated being able to have a consultation at home, so that I could discuss my situation in confidence. I was able to ask wide-ranging questions and Gina’s knowledge and expertise were reassuring. An estate plan was created for me that exactly suited my needs, resources, family and dependents. I have the peace of mind of having made a will that ensures my assets are safely passed to my children at the end of my life. I also have added protection if I become ill or disabled, because I have made a Lasting Power of Attorney appointing my best friend to manage my affairs if I lose the ability to manage them for myself. "

Christine J

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