Because same sex and unmarried couples are legal "strangers," estate planning is particularly important and must provide as much protection as possible. Common estate planning tools for same sex and unmarried partners include:
- Domestic partnership agreements
- Living will and durable medical power of attorney
- Durable power of attorney for finances
- Trusts
- Wills and codicils
- Authorization for nursing home/hospital visitation
- Authorization for burial arrangements
Agreements: Domestic partnership agreements set out parameters of a relationship and specify the rights and responsibilities of each partner. They are similar to pre-marital agreements and are well-advised for unmarried couples who live together.
Last Will: When you die without a will, you die "intestate," which means that state law determines how your estate is distributed. Same sex (LG) or unmarried couples are not recognized by Colorado intestacy statutes. Thus, upon your death, your partner will have no rights to your estate.
The chance for a will contest may be greater in same sex and unmarried relationships, as family members may not understand the choices you have made. Thus, it is particularly important to include certain provisions to alleviate concerns regarding potential will contests. For instance, an "in terrorem" clause may be included to provide that anyone contesting the will is to receive nothing from the estate. In addition, a clause stating the specific reasons behind certain dispositions should be included to prevent a successful contest and to help disprove potential claims that couples were just "roommates," or "friends."
Living Trust: A Living Trust may be a good option for LG or unmarried couples, due to its private and expeditious nature. If you own property in more than one state. a trust also helps to avoid ancillary proceedings. A living trust goes into effect once it is funded and can hold both individual and shared property. There are two kinds of living trusts: revocable and irrevocable. In a revocable trust, you (the "grantor") retain control over the trust during your lifetime, and it can be amended or revoked at any time. If you do not wish for creditors to access the trust assets, an irrevocable trust is a better option. A pour over will supplements a living trust and should be used to distribute property not placed in the trust.
Power of Attorney: A power of attorney for legal or financial matters allows you to appoint your partner to manage your affairs, should you be unable to do so. It is also helpful to provide further proof regarding your intentions and the nature of the relationship, in the event of a will contest.
"Living Will" and Medical Durable Power of Attorney: In Colorado, a living will is called an "advance healthcare directive." An advance healthcare directive specifies your wishes for medical care and artificial life support. An advance directive goes into effect upon incapacitation. In Colorado, this means that two physicians must certify that you are terminally ill and have been for at least a 48 hour period. A medical durable power of attorney should accompany the healthcare directive because it appoints someone to make medical decisions on your behalf (in the event that you are unable to communicate your wishes) and specifies your wishes regarding artificial nourishment. Note: Although there are no guarantees, a hospital cannot legally limit visitation from a same sex partner. The Joint Commission on Accreditation of Healthcare Organizations defines "family' as a person who plays a significant role in the patient's life and acknowledges that this may include a person not legally related to the patient. It is crucial to have the power of attorney and directive because, without them, your partner will have no legal rights regarding your care.
Joint Tenancy: Same sex and unmarried couples can benefit from owning real estate together as joint tenants with rights of survivorship, meaning that when one tenant dies the other takes sole ownership of the property. Common concerns involve taxes between unmarried couples. For instance, if you own property and add the name of your partner, you are making a gift and will be taxed. In addition, the IRS presumes that the first person to die owned 100% of the property. Thus, the survivor must provide documentation showing his or her contributions to the purchase and upkeep of the home.
Because there are so many tax issues to work out between unmarried partners, it would be wise to consult a financial planner to take advantage of all the tax benefits available.
Colorado has just passed a bill that impacts Colorado same-sex rights. Please contact Comfort Legal to discuss how these changes will impact you.
For an overview of wills, living trusts, power of attorney, and living wills, please see the section on estate planning.