Hyden, Miron & Foster, PLLC Law Blog

Sunday, June 18, 2017

Special Estate Planning Considerations for Non-Traditional Families

Non-traditional families can look different from household to household, from same-sex couples and unmarried partners, to aunts and uncles raising nieces and nephews without formal custody arrangements. After the Obergfell ruling in June of 2015, guaranteeing the rights of same-sex couples to marry, even those “non-traditional” family units are formally recognized and stand on equal footing with “traditional” married folks.

However, where partners choose not to marry or take on the responsibilities of informally raising children that are not their own, special considerations must be made when it comes to estate-planning protections for non-traditional families.

Non-Married Partners

The law favors marriage, plain and simple. When a married person is incapacitated due to injury, hospitals recognize a husband or wife as a person legally able to make decisions for the other. Additionally, when a married person dies, the government does not require taxes to be paid on real estate or other assets that are bequeathed to the spouse.

But, what if two people have spent 15 years of their lives together, not seeing the need to get married, and one becomes incapacitated and dies? Without proper estate planning, the surviving partner could face:

  • possible hostility and banishment from “legal” family members while their partner is in the hospital

  • the inability to make healthcare decisions in the manner that the incapacitated spouse would have wanted

  • eviction from a home that both partners lived in, but owned by the dead partner

  • the possibility that property owned by the spouses is taken away upon the death of the partner

  • steep inheritance tax rates if a will is in place

To avoid these potentially heartbreaking scenarios, there are a number of estate-planning tools you should consider right now:

  • A healthcare power of attorney – both you and your partner should create a living will. This document enables you to appoint a personal representative to make healthcare decisions in the event that you become incapacitated and set down in advance what decisions you would make in certain medical situations. This document should also come with a HIPAA release so that you and your partner can receive information about the others’ medical issues and status.

  • A financial power of attorney – this type of document will enable each of you to assign the other as financial representative to the other in the event that either of you are unable to make financial decisions due to incapacity. Banking, contracting and taxes can become must easier with a power of attorney.

  • Beneficiary designations – if you and your partner have financial accounts that are not jointly owned, designating your partner as the official beneficiary of these accounts can keep funds out of the hands of other family members.

  • Joint-Property Ownership – if you and your partner own real property or high-value personal property like autos, RVs and boats, you should consider having all titles reflect ownership by both of you, so that, upon the death of either of you, the other will receive the property seamlessly and there are no tax implications.

These are just a few considerations to think about in order to protect your partner in the event of your death. If your family is not considered a “traditional family” contact an Arkansas estate-planning attorney at Hyden, Miron & Foster, PLLC to discuss your estate planning needs.

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