There are many unique legal issues to consider relative to the estate planning process for same sex couples, couples who have not decided to get married, and single people. Although many of the planning techniques are similar, since there is no “legal” relationship, special documents must be prepared in many cases.
Naturally, it is important that a Will be given the due consideration in the planning process, but often other required documents are not given as much attention, and they may actually be more important. This “lifetime planning” is relative to your Health Proxy and Power of Attorney, which may allow another person to make decisions for youl upon your incapacity.
Power of Attorney:
Your Power of Attorney is a very important document, since it controls decisions over your finances upon incapacity. Care should be taken to be sure that when a person is named, that individual has business sense, is trustworthy, and also has the time to manage and direct your investments if you cannot do so for yourself. If this document is not prepared, then a conservator will have to be appointed by the Probate Court, and this process often times becomes time consuming, expensive, and emotionally draining.
In this document, a partner or close friend may be named instead of a direct family member. A family member may be displeased with your choice, but once the document is signed, your backup agent is in charge of all financial affairs in the unfortunate event of your incapacity, regardless of your family members’ wishes. Keep in mind though that death revokes the Power of Attorney, and therefore, this document is not used for post-death decisions.
Health Proxy:
Your Health Proxy is also an important consideration. This person may be someone different than the one serving as Power of Attorney, but it should be someone who is close to you and will who carry out your wishes. Within this document, there should also be a backup person named in the event that the primary decision-maker is unable to make decisions due to their own illnesses.
Once again, a family member may be somewhat aggrieved that they are not making these decisions, but it can be written such that the decision maker should consult with a family member, but need not heed their advice when making decisions. Within this document, there should also be language regarding funeral and final disposition arrangements, so that there will be no question as to who is in charge and what will happen. In addition, whether or not you wish to be an organ donor should be included in this document as well as on your license.
Will/Trust:
Needless to say, your Will is also an important document, and you should pay particular attention to who is in charge of your estate as your personal representative. This person will be in charge of making all distributions and decisions, attending to tax matters, and possibly closing your business if your own one. If this person is not able to serve, consider who the backup will be, and if there is no appropriate person, perhaps a bank or trust company can serve in this role.
Within your Will, there may also be a memorandum regarding how specific items of tangible property shall be distributed and to whom. Often, these items are more sentimental than material in value, but they could cause a significant dispute. The objective is to prevent dispute with this document.
If a Trust is to be used, often the named personal representative is also serving as the trustee, with specific instructions as to how your assets should be divided. Again, within this document, it is sometimes anticipated that a family member may not be pleased with the ultimate disposition of your assets, and therefore a specific clause may be included within the document that specifies who your family are and who shall not be a beneficiary under your Trust/Will.
In order to further protect your named beneficiaries, it is often advisable to have a so-called “no contest” clause in the document. This means that if an individual is not satisfied with the amount they are receiving, and if they were to challenge the Will on any grounds, and even if they are successful, they will lose a part of their inheritance, and thus relinquish what otherwise would have passed to them. This clause puts the possible objector in a precarious situation, since they would be forfeiting their distribution in order to attempt to gain more. They must give significant thought regarding whether they wish to challenge the document and forfeit the amount that was left to them prior to moving forward with that case.
Although there are many other considerations, it is important that an unmarried person or members of a same sex couple pay attention to the way assets are held and how they are to be distributed before making a decision to finalize their estate planning documents.
Hyman G. Darling, Esq.
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