It’s important for every couple to make retirement planning a priority. However, if you are in a same-sex relationship it is especially important because of the complexity of issues that same-sex couples undertake. This advice is doubly true in states where same-sex marriage or civil unions are not recognized.
In addition to the same general retirement planning steps any couple should make, same-sex couples should also keep all documentation up to date, seek expert advice with those familiar with the specific issues same-sex couples face, take proactive steps to prevent any potential legal objections to an estate or power of attorney, and have power of attorneys drafted and enforced.
Do General Retirement Planning:
First and foremost, while same-sex couples face unique problems in retirement planning, they face the same issues that heterosexual couples do as well. To avoid problems, same-sex couples should follow general retirement planning steps, including: discussing what retirement will look like; knowing what is owned and what is owed; planning for who gets what in the event of a death; and finalizing the plan with the help of professionals.
Keep Documentation up to Date:
Because of some of the legal issues that same-sex couples face with recognition of property rights, the couple needs to keep their beneficiaries up to date. Make sure to keep wills and estate planning documents up to date with the legal status of the relationship, as same-sex marriage and civil unions are legalized more broadly.
Seek Expert Advice:
Retirement and estate planning for same-sex couples operates under a myriad of laws across the United States that varies vastly. Because of that it is great to seek advice of experts that are very familiar with the needs of same-sex couples and can help guide them through a potential minefield. There are attorneys, accountants, and financial planners in most areas that have dealt with issues surrounding same-sex couples before and are able to prevent massive losses in the future with some creative planning now.
Prepare Powers of Attorney and a Healthcare Proxy:
An effective way to prevent any interference with one partner’s management of the health or finances of another if they are in an incapacitated state a power of attorney. This is especially true in states where same-sex marriage or civil partnerships are not legal so there is no innate legal protection for financial or medical decisions for same-sex partners.
Both financial and medical powers of attorney should be prepared. In the event of a circumstance where one partner cannot make their own financial or medical decisions, these documents allow the other partner the power to speak on their behalf.
Another important document that should be prepared is a healthcare proxy that will allow you in a hospital to be with your partner when otherwise the hospital could limit access to the partner that is in the hospital.
Prevent Objections to the Retirement Plan From the Outside:
When drafting any of the legal documents as part of the retirement plan that deal with after-death succession of property, make sure that it is done in a way that prevents objection to state of mind at the time of drafting or coercion. If successful, those objections can prevent a court from finding the documents legitimate and will disallow the transfer of those assets to the other partner.
A good way to prevent objection is to have each partner hire their own independent legal counsel for any documentation done. This increases costs at the beginning but can help prevent problems later on.
If same-sex couples follow general retirement planning advice, keep their documentation up to date, seek expert advice, prepare powers of attorney, and take proactive steps to prevent outside objections then they will have taken steps to help prevent most problems in retirement and beyond.