BASIC GLBT ESTATE AND DISABILITY PLANNING
INTRODUCTION
GLBT individuals might want to think, even more than some, about planning their affairs and at least drafting a will, a durable power of attorney, and naming someone to speak for them if they are unable to in a medical crisis.
When any Michigan resident dies without having planned the distribution of their assets (called their estate), any property that does not have a beneficiary (like an insurance policy) or that is not held jointly (like a piece of real estate) will be transferred under Michigan’s Rules of Intestacy (the default priority for distribution of an estate).
If one member of a married couple dies without having planned their estate, under the rules of intestacy, the state protects the surviving spouse through provisions such as the surviving spouse’s share, the elective share, and the homestead allowance. Married couples also share the ability to own assets as tenants by the entireties (a form of joint ownership for married couples), meaning that a creditor of only one spouse cannot reach the asset.
Conversely, for unmarried couples, such rules do not apply. Therefore, a surviving spouse who was married for less than a year will receive greater protection than a life partner of 50 years. Thus, without proper estate planning, unmarried couples are subject to rules that are not designed with their needs or interests in mind. This lack of planning can be a real detriment to GLBT individuals and especially GLBT couples.
WILLS
WHAT IS A WILL?
A Last Will and Testament is a document containing your instruction about how you want your estate distributed after you die. By leaving a will, you exercise your right under the law to determine who receives what share of your estate. A will distributes your “probate estate.” The probate estate is property that you hold in your name alone. If you are over the age of 18 or own assets like cash in a checking account, stocks, or a home then you should have a will. A will also permits you to nominate a guardian for minor children who might survive you.
WHAT ARE THE BENEFITS OF A WILL?
Having a will allows you to circumvent the state’s default priority for distributing assets. Priority for receiving the estate is granted to the following people in descending order:
1) descendants (children, grandchildren),
2) parents,
3) descendants of your parents (siblings, nieces, etc.),
4) lineal descendants of your grandparents (uncles, cousins, etc.), and
5) if none of the preceding exist, then your assets go to the state of Michigan.
This list, created by state law, makes no provision for a life partner.
Also, with a will you can designate a “personal representative.” A personal representative administers the decedent’s (the deceased) probate assets by paying things like bills and taxes, then distributing the remaining assets as the deceased wanted. This designation is especially important for unmarried couples. If a married couple fails to name a personal representative, the state gives the surviving spouse the first priority to become the representative. If an unmarried couple fails to name the representative, the surviving partner gets no preferential treatment by the state. Again, biological family members will often have priority for appointment to the position.
Lastly, if you fail to leave a will, your life partner is often not even entitled to notice regarding the distribution of your estate.
DURABLE POWER OF ATTORNEY FOR HEALTH CARE
This instrument (also called “medical directive” “medical power of attorney” or “designation of patient advocate”) appoints a “patient advocate” to make medical decisions for you when you are unable to do so for yourself. The medical directive can direct that all means of medical support be used to prolong your life, or should you want, that health care services be withheld.
If a member of a married couple does not have a medical directive, hospitals often turn to the surviving spouse to make decisions. However, for an unmarried couple, it is much more likely that the hospital will seek the advice of your biological family members.
Another benefit of this document is that you can state who has hospital visitation rights should you be admitted to such a facility. Since a life partner is not a family member, failing to provide for this could lead to problems like not being allowed into the hospital room.
DURABLE POWER OF ATTORNEY FOR FINANCES
This instrument designates a person (not necessarily an attorney) who can step into your shoes to handle day-to-day financial matters when you choose. This person becomes your “agent.” Duties to delegate can include the power to sign documents, to buy and sell property, or to pay your bills. By naming an agent through a durable power of attorney, you can often save yourself from a trip to probate court if you do become disabled, and you would also be able to choose for yourself who you trust to handle your financial affairs.
CHANGING YOUR ESTATE PLANNING IF YOUR RELATIONSHIP DISOLVES
When a married couple divorces, the state of Michigan has protections in place in the event that one member of the divorced couple forgets to remove their former spouse from their will. In this circumstance the state will revoke the former spouse’s rights as a beneficiary in a will and the state will also sever property owned jointly during the marriage. These protections do not exist for unmarried couples. So, if an unmarried couple dissolves their relationship then they must amend their wills and change the status of their real estate ownership, unless they still want their “ex” to inherit their things.
OTHER NEEDS
The above information covers the basics of estate planning. Please keep in mind that there are more specific types of planning dealing with trusts and taxation which may be important to GLBT couples. For these issues you should try to find an attorney who specializes in handling GLBT estate planning. Also, for more information visit www.lambdalegal.org.
|
