Stelter’s Senior Gift Planning Consultant, Lynn M. Gaumer, J.D., joins us to highlight important estate planning considerations for the LGBTQ+ community.
Estate planning is critical for everyone and especially important for members of the LGBTQ+ (lesbian, gay, bisexual, transgender, queer) community who face unique challenges with their estate plans and end-of-life care.
As someone working in planned giving, you need to understand aspects of estate planning that may impact your LGBTQ+ supporters specifically—areas they should give special attention to. Taking care of their loved ones and ensuring their wishes are respected takes on additional importance if, for example, they have unsupportive family members or care for non-biological children.
The first step, always, is to have a plan in place.
Planning Tip: If an estate plan was created prior to the 2015 Supreme Court decision in Obergefell v. Hodges (that determined same-sex marriage is protected under the Due Process and Equal Protection Clauses of the Fourteenth Amendment), it should be reviewed and possibly updated to reflect current laws.
Five Essential Elements of an Estate Plan
1. A Will and/or Trust
A will formalizes an individual’s wishes on how property should be distributed after their lifetime. A revocable living trust arranges for the management of assets during life. It may also be set up to benefit loved ones after a lifetime. Both can provide for partners, friends and others whom the law may leave out.
Planning Tip: If there is concern a family member may contest or challenge the validity of a will, establishing a trust or including a “no contest” clause in the will can address this. Advise your LGBTQ+ supporters to speak with their attorney, as some state laws may limit the use of these clauses.
2. Beneficiary Designations
Beneficiary designations name the person(s) who will receive a specific asset, such as a retirement plan or life insurance. These assets pass outside of an individual’s will via a beneficiary designation. A will only formalizes wishes for assets left in the individual name. It is important to review these beneficiary designations so they mesh with the overall estate plan.
Planning Tip: Remind your LGBTQ+ supporters to review these designations regularly, particularly after any change to their life circumstances, to ensure their designations reflect their current wishes.
3. Living Will or Advance Health Care Directive
A living will or advance directive helps guide the doctor or other caregivers to withhold or withdraw life-prolonging interventions if an individual is terminally ill or permanently unconscious.
4. Power of Attorney for Finances
This document allows a person to name an individual to have legal authority over financial matters in the event they are unable to.
5. Power of Attorney for Health Care
A power of attorney designates someone to oversee health care wishes if the individual is unable to.
Planning Tip: These documents are critical for unmarried LGBTQ+ couples as their relationship may not be recognized under the law, leaving financial and health decisions to those appointed by a court.
Additional Considerations
Even with an estate plan in place, a will can be contested for various reasons. Here are some things to consider:
Provisions for Children
Estate planning documents must recognize children not legally adopted by both spouses or partners, providing clear direction for their care if the biological or sole legal parent passes. Laws regarding second-parent adoption for non-married couples may vary by state.
Gender Pronouns and Legal Names
Trust & Will recommends removing pronouns from all estate planning documents. If the pronouns listed in the estate plan do not match the pronouns that the partner, children or beneficiaries are using at the time of the individual’s death, the will could be contested in a court of law. The same goes for legal names. All individuals named in any documents must be listed using their current legal name. Be sure this is updated whenever a name changes. Keep in mind that transgender and nonbinary people may encounter additional requirements or limitations when updating state identity documents.
What if…
If the Supreme Court were to overturn Obergefell v. Hodges, the legality of same-sex marriages would revert to state law. And states would no longer have to grant marriage licenses to a couple with the same legal gender. Currently, the majority of states would prohibit it. The Respect for Marriage Act, signed in December 2022, affords some protections but does not go as far as the protections afforded in the Obergefell case. So, if the Obergefell case were to be overturned, it would create a myriad of legal issues for the LGBTQ+ community including a patchwork of laws around the country in which some states would allow marriages and others would not.
This possibility makes it vital for you to keep up to date on any changes that could impact estate planning for LGBTQ+ people.
Education and Allyship
Educating your LGBTQ+ supporters about the importance of having an estate plan shows you care about their legacy and want to help them protect it. Become an active partner to the LGBTQ+ community by sharing resources in your direct marketing materials, on your planned giving website, or by hosting a tailored educational session.
The LGBTQ+ community includes a diverse spectrum of identities and life experiences. It’s important to listen for and respect a person’s self-identified terminology and avoid assumptions based on their appearance. If you are not an LGBTQ+ person or advocate, check out these tips for being an ally.