Published in the April 2025 Edition
By Woody Derricks, CFP®,
Accredited Domestic Partnership Advisor
In its simplest terms, estate planning is passing your assets to your heirs as quickly and tax free as possible. Assets can be transferred via a will, ownership, by contract (beneficiary arrangements), and trusts. Meeting with an attorney is the best way to ensure that you have everything covered.
Regardless of the complexity of your financial situation, your attorney will start you with a basic estate plan. The basic estate plan typically includes drafting of your will, powers of attorney for health care and finances, and living wills.
Wills: I have encountered many excuses for not having a will: my estate isn’t large enough; everyone knows who should get my belongings; and so on. These are all simply that- excuses. If you do not have a will, the probate court creates one for you. As a result, parents, siblings, and possibly even cousins could receive preferential treatment over your partner (if you’re not married), friends, or your favorite charity.
Talk with your planned executor/executrix to make sure it’s okay with them to be the one who settles your estate. Also, let that person know where you keep your original estate documents so s/he can easily gather them after you pass away.
Powers of Attorney: When most of us think of estate planning, we often neglect to think about those areas that can help us while we are alive. Powers of attorney allow someone else to make decisions on your behalf if you cannot. These documents, drafted with your basic estate plan, spell out the decisions someone else can make for you and the circumstances in which they can. For instance, if you were in intensive care, you might be unable to make your own medical decisions.
Additionally, you should have someone managing your investments and paying your bills while in the hospital. Your financial power of attorney may be the same person or a different person as your power of attorney for health care. In creating both, take your time to carefully select the person with whom you plan to place your physical and financial well-being. I also recommend appointing a contingent or backup person if your first choice is unable or unwilling to make those decisions.
Even with the power of attorney, institutions in or out of your state may decline to accept them. I recommend checking with your primary care physician to ensure they will take your forms and make them aware of your intentions. Additionally, many financial institutions may only accept their forms. As a result, I also recommend talking to your bank and financial advisor about your intentions.
Living Will: Regardless of your desire to be kept alive or allowed to die, you want to make your wishes known in writing. Make your wishes crystal clear through a living will as part of your estate plan.
Settling an estate is a difficult task for survivors. It is an area where most people have little to no experience and are often quite emotional. By having a will, beneficiary arrangements, and an organized system of your financial/estate documents, you can help them tremendously during this time. Even if your assets are relatively small, doing some work now could make a significant difference for your heirs.
Some of our clients have expressed concerns about their legal protections considering the current administration. Having appropriate and up-to-date legal documents in place and naming beneficiaries on your accounts are among the first steps you can take to help protect yourself and your loved ones.
The most important piece of estate planning is getting one in place. Meet with an attorney, financial advisor, and accountant to determine the best course of action for your estate. Review your beneficiaries on a regular basis. You will also want to update your estate plan every five years or when you have a significant life change, a beneficiary passes away, or if estate/income tax laws change. Do not continue to procrastinate- make it happen and get your estate plan completed today!
The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.
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 work towards their financial goals. 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: partnershipwm.com.