Legacy Planning Tips for Same-Sex Couples

When the Supreme Court legalized gay marriage, it didn’t alleviate many of the ambiguities related to legacy planning for same-sex couples. Children, physical and digital assets, and even family attitudes can impact the planning process for those in the LGBT community. To ensure that you leave the legacy you’ve always wanted, it is important to devise a strategy that accounts for both best practices and common roadblocks.

What is Legacy Planning?

In traditional estate planning, people typically draw up a last will and incapacity documents, such as a durable power of attorney and a living will. Legacy planning goes much deeper than preparing legal records; it involves transferring your financial assets as well as your goals, values, and family history. It is all about shaping how you will be remembered when you pass away – in advance.

Who Needs a Legacy Plan?

You don’t need to be wealthy to produce a legacy plan. Any person who wants their assets and wishes to be passed on to future generations should prepare one.

Legacy planning is critical for same-sex couples – especially those who have children. With laws concerning civil unions and domestic partnerships varying from state to state, you don’t want a judge to assume your intentions after you’re gone. A thorough plan can organize your assets and guarantee that the right people receive them, at the right time.

Common Hurdles

Every planning process has its roadblocks. By keeping them in the back of your mind, you can proactively avoid them.

In legacy planning, people often:

• Start too late. You can never start planning too early. The sooner you begin, the easier it will be to arrange every detail.
• Keep everything secret. Managing your estate may be more complicated than you think. To avoid any surprises, meet with your beneficiaries to review your goals and discuss the administration of your assets.
• Assume too much. Your family may know less about your desires than you think. Put things in writing whenever you can. It is also a good idea to videotape your wishes – especially if you run a family business or foundation, or if you have a terminal illness.
• Fail to look at the whole picture. Typically, our clients look to create a balance between protecting their assets from creditors and working to provide themselves with a sustainable retirement. Although you’ll want to help your heirs, don’t forget to plan for your own finances while you and your partner are alive.
• Overlook tax implications. Many types of assets can be taxable, including annuities, employer-sponsored retirement plans (like 401ks and the TSP), and Individual Retirement Accounts (IRAs). Depending on how you want to divide assets, you may want to take into account the tax implications for your heirs upon receiving your assets.

Tips for Success

To safeguard your legacy, you may need preserve more than your physical assets. Your planning process could include measures for passing along values, morals, and family memories.

Consider every resource and utilize:

• Digitized Records – Convert family movies, photos, letters, and significant documents into digital files that can be stored and protected online. If you haven’t shared certain family stories or events, make sure that you record them in writing or via video so that you can pass them on as well.
• Meaningful Documents – Your last will and testament can legally outline how you would like your property (e.g., heirlooms, cars, and furniture) to be distributed to your heirs. To share your values, hopes, and dreams, an ethical will – otherwise known as a legacy letter – can help.
• Life Insurance – As one of the basic tools for legacy planning, life insurance can be a great way to pass on wealth to children or grandchildren.
• Retirement Accounts – You can get creative with your IRA accounts, splitting them up and naming grandchildren as beneficiaries. Just keep tax implications in mind before making any decisions.

As always, it’s a good idea to seek professional advice during the legacy-planning process. A Registered Investment Advisor, like Partnership Wealth Management, can help you through every step. Certified legal and tax professionals should also be consulted throughout the decision-making process. By avoiding well-known pitfalls and using the right tools, you can pass on a legacy your family will appreciate for generations to come.

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. This information is not intended to be a substitute for individualized tax, legal, or investment advice. We suggest that you discuss your particular situation with a qualified tax, legal, or financial advisor.

As a Registered Investment Advisor (RIA), Partnership Wealth Management is committed to providing our clients with financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management, we have a long history of working with the LGBT community. Among the many services we offer are financial planning and estate planning strategies for gay and lesbian couples. Financial planning is an important part of preparing for the future; contact us today to get started: www.partnershipwm.com.