The recent elections have many in the LGBT community nervous about the prospects of national equality coming any time soon. The Obama administration has promised big but delivered moderate results. Some would even say the results were terrible mainly because there were specific opportunities to force equality, such as the repeal of Don’t Ask, Don’t Tell and partner benefits in the healthcare bill. While legislative and judicial equality may have suffered some setbacks, there are still many opportunities to seize legal control using tools that have been around for years.
Most domestic partner couples, when seeking Marriage Equality specifically, want three things:
- To combine all of their assets as one family unit
- For their partner to have control of their healthcare and financial decisions should they become sick; and
- For their partner to inherit their assets should they pass on
Fortunately, there are legal tools available to domestic partners right now. No waiting on Congress. No waiting on the President. They are available right now.
A Partner AB-SECURE Trust is a joint revocable living trust that can bring a couple’s assets together under joint control without triggering the gift tax the way joint property with a right of survivorship would. By having assets in a joint trust, both partners can exercise control over all assets during life, in a time of sickness, and after death. And a special Domestic Partnership Property Agreement can keep the assets separated within the trust and attached to the partner putting the assets in the trust so there are no gift tax implications.
There are also other legal tools available for partners should one partner become too sick to handle their own affairs—the healthcare power of attorney and the durable general power of attorney. While most assets are controlled by either partner through the Partner AB-SECURE Trust, there are some assets not inside the trust, such as retirement accounts. That’s where the durable general power of attorney comes in and allows your partner complete financial control. The healthcare power of attorney also empowers a partner to make all healthcare decisions for the other in a time of sickness, and it is particularly strong right now based on an executive order by the President that will strip a hospital or medical facility from receiving Medicare and Medicaid reimbursement should they fail to honor a valid healthcare power of attorney. (http://www.livingtrustlawfirm.com/healthcare-directives-get-presidential-backing/) Both of these are fairly standard legal documents, but it is shocking how many partners fail to create them.
Regarding inheritance, partners can spell out all of their wishes in the Partner AB-SECURE Trust so their partner can receive their assets outright, or even in trust to minimize potential estate taxes for the next generation. There is a big difference between using a Last Will and Testament and a trust like the Partner AB-SECURE Trust, and the biggest is that a Will means the estate has to go through probate. This means higher costs, time delays around a year, the estate being more vulnerable to contests, and all estate information being open to the public. There are plenty of attorneys out there who will tell partners and their other clients that they don’t have to worry about having a trust for one reason or another. What they are actually doing is building you a house out of straw and sticks because they know that while it provides some shelter there will be extensive repairs needed when the storm hits by administering the probate process for them… of course, for some large legal fees. I prefer to help my clients build a house out of brick so that when the big, bad probate attorney wolves try to blow the house down they are not able to.
Going into all of these issues could take a book rather than a blog, and I have in fact written that book. For more information, order Estate Planning for Domestic Partners through our website at www.livingtrustlawfirm.com/media or on Amazon.com.
While there are many partners who feel that they are now more vulnerable because of the recent elections, they should keep in mind that the power to create many of their own legal rights exists now, regardless of who is in office.