The Federal Estate Tax

Pets: remembering ALL your loved ones

Let's face it, we live in a world in which our dogs and cats (and many other varieties of four-legged and non-legged friends) are a part of our family. This certainly is no less true for LGBT persons. The obvious question that comes to mind then is "What would happen to my beloved Vizsla or Ocicat or mutt Rotty-Pitt-Pinscher mix if I die?"

While we may treat our pets as if they are our children, Pennsylvania does not recognize them as such. However, Pennsylvania does allow a person to include clauses in his or her estate planning documents for the continued care of pets. Pennsylvania law allows people to make formal arrangements for the care of pets through a Will, and also allows for the creation of a trust for the care of pets.

Peter Klenk, Esquire and Jeanna Lam, Esquire explain the different things one should take into consideration when thinking about the future care of pets in their article "Including Your Pets in Your Estate Plan." You may find the piece helpful when thinking about your more-furry members of the family.

Retirement Planning

A study released earlier this year by the American Society on Aging and the MetLife Mature Market Institute reveals that of the 1,200 LGBT baby boomers surveyed, only 21% of them agree that they are "on track" for saving for retirement. And as Todd Henneman writes in his August article for Workforce Management, retirement planning presents a unique set of challenges for LGBT individuals and couples. One notable challenge that is unique to gay and lesbian couples are the inability for surviving partners to receive Social Security survivor benefits, even if they had been in a state-recognized legal relationship, as the federal government only provides such benefits to opposite-sex couples.

One helpful tool that assists with retirement planning and beyond, is the use of an IRA Trust. Since 2006 all IRAs and 401K programs must allow you to name IRA Trusts as beneficiaries. An IRA Trust allows you to pass qualified plan funds for a person’s benefit (e.g. your partner), defer tax recognition of those funds, while adding a level of asset protection to the IRA or 401K funds given to the beneficiary. Such trusts allow LGBT couples to name their partner as beneficiary of their retirement plans upon the owner's death, while giving them the benefit of asset protection AND deferred tax recognition.

For a PDF copy of the American Society on Aging and the MetLife Mature Market Institute survey, click here.

Estate Planning Involving Children

Many LGBT couples have children whom both partners consider to be their own, but whom only one partner is actually the biological and/or legally recognized parent. In this situation, many partners become concerned about who will have the right to take care of their minor children should the legally recognized parent die. In the end, all decisions surrounding custody are based on the best interests of the child, but partners can provide for an alternate guardian in their Will with clearly stated reasons for believing a specific person (including their surviving partner) would be the appropriate guardian for minor children. While not necessarily binding, Courts will take these wishes into consideration when determining guardianship rights.

Moreover, Pennsylvania allows couples to seek what is called a second-parent adoption. This enables a second parent to adopt a child without the first parent losing their legal rights to custody of that child. LGBT couples with children should speak to an attorney about exploring these options.

Intestate Succession in Pennsylvania

In Pennsylvania, when a person dies without a Will, they are said to have died "intestate" and their property will pass according to the laws of intestacy. Pennsylvania law divides the assets and belongings of a person who dies intestate between the surviving spouse and either the deceased's issue (children, grandchildren, etc.) or the deceased's parents. If there is no surviving spouse, assets will pass to surviving issue, parents, or even more distant relatives.

As there are no legally recognized relationships for same-sex couples in Pennsylvania, gay and lesbian surviving partners typically will inherit nothing (other than assets which they had owned jointly with their partner or of which they were a beneficiary) from a partner who dies without any estate planning documents in place. Because the surviving partner of a same-sex relationship cannot be recognized as a spouse in Pennsylvania, all of the deceased partner's probate assets will pass instead to the deceased partner's children or parents, if any are then living. Assets will even pass to more distantly related persons if the partner dies intestate with no surviving issue or parents instead of passing to the surviving partner.

Gay and lesbian persons can avoid leaving their surviving partner with nothing if they have the right estate planning documents in place. Each person's individual situation varies, and as such, members of the LGBT community should speak with an attorney to be fully advised of their options.

Hospital Visitation Rights

While federal rules are changing to make it easier for LGBT partners to visit one another in the hospital, it remains vitally important that the proper documents be in place to establish visitation rights for the partner of another who is hospitalized. In Pennsylvania, it is possible to identify individuals, including partners, who the hospital must give visitation access. These documents are legally enforceable should a hospital have discriminatory practices.

There are number of documents that can be drafted to ensure that partners can visit each other should one of them be hospitalized. Some of these include Powers of Attorney, Living Wills, and Designation of Agents with visitation rights. Beyond granting your partners the right to visit each other in the hospital, documents such these can contain HIPAA releases, which allow a partner the ability to access and review the medical records of the other. Without the proper language, however, such releases may fail, potentially making it impossible for a partner to make informed decisions on the other's behalf.

For more information on this and other topics, you can visit our firm's website.

Welcome!

While Estate Planning is important for everyone, LGBT couples and individuals should take special care in creating and implementing a plan to ensure that their wishes are followed. Our firm's combined years of experience will help same-sex partners and LGBT individuals understand what is needed to create an effective estate plan.

Our goal for this blog is to establish a forum where members of the Philadelphia and surrounding communities can seek information about the world of Estates & Trusts and how it affects LGBT individuals. We understand that there is a dearth of material available regarding the Estate planning issues that most affect gay and lesbian persons, and hope that the information you find on this website will help to fill that void.