While the love and responsibilities you share with your partner are exactly the same as that of your non-gay family and friends, unfortunately Florida law sees it another way. State and federal law generally does not recognize concrete legal and tax rights and privileges for same-sex couples. Since gay or lesbian couples lack the same tax, inheritance and employment benefits that marriage bestows, these benefits must be created through the use of estate planning documents and contracts.
The Plan You Cannot Afford
For those who have not planned their estate, the State of Florida dictates one for you under the statute that applies to persons who die without a will (“intestate”). Under the laws of intestacy, the estate of a person who dies without a will or trust passes (after lengthy and costly probate proceedings) to biological relatives under the traditional family model.
There are two problems with intestacy. The first and most important problem is that Florida intestacy laws discriminate against same-sex couples by not considering gay and lesbian relationships in the distribution of the estate of a deceased partner who dies without a will. In fact, the surviving partner under Florida intestacy is left with nothing upon the death of a partner, regardless of the length and intensity of the relationship. Florida’s same sex couples cannot rely on intestacy laws in place of estate planning.
Second, all property that is distributed according to Florida intestacy laws will be subject to “probate”.
What is Probate and Why Should it be Avoided?
Probate is a legal process in which your property is identified, inventoried, and distributed to your heirs after your death.
There are three important reasons you may wish to avoid probate. First, it is expensive. The fee for probate is set by statute in Florida. For formal administration, the attorney alone is entitled to “reasonable” compensation in the amount of $3,000 for estates of more than $70,000 and less than $100,000; 3% of estates valued from $100,000 to $1 million, and 2 ½% of estates valued from $1 million to $3 million.
A second reason to avoid probate is that it generally ties up your assets for a long time. While the estate is going through the probate process, a lack of cash flow can create problems for your heirs. They may have to pay your mortgage or other debts, or they may be trying to keep your business running. An average probate in Florida takes about one year to complete.
Third, the probate process can involve many visits, letters, and phone calls between the attorney and the executor, and can place a physical and emotional burden on the survivors. The grieving process is difficult enough without the bother and disturbance that is often involved in probating an estate.
How to Provide for Loved Ones
In order to ensure that your property will be received by your partner or your friends the way you intend, you must have an estate plan other than intestacy, such as a will or a living trust.
A will is a document in which you identify to whom your property shall be given after you die. Through a will, you can leave your property to anyone you choose, in whatever proportions you choose, including leaving everything to your partner. If you have minor children, you can name a guardian for them in the will.
There are some major drawbacks to using a simple will as your primary estate planning device:
- any property passing to your partner, family, friends or other beneficiary pursuant to a will is subject to the costly and time-consuming process of probate.
- a will can be contested by the decedent’s family, especially if they have not come to terms with the decedent’s choices during life.
- a will is public, which means that anyone can go to the courthouse and see your will after you die.
Clients often ask, “what about joint tenancy?” Owning assets in joint tenancy can be a useful way to transfer property to your partner. When one joint tenant dies, the remaining joint tenants automatically own the entire asset without probate. However, there are drawbacks:
- Joint tenancy only delays probate because although the jointly held property passes to the surviving joint tenant without probate, the property is ultimately subject to probate upon the death of the survivor.
- Putting an asset you own into joint tenancy with your partner results in a current gift to him or her that could result in gift tax and/or the inability to get the asset back.
- Property owned with someone else as joint tenants is completely subject to the creditors and liabilities of each joint tenant.
- You have no control over what happens with the property after the death of the surviving joint tenant. The surviving joint tenant may dispose of the property, gift it or bequeath it to whomever he or she chooses.
What You Should Do?
Anyone in a same-sex partnership needs some form of estate planning in order to avoid disinheriting his or her partner. If you do not have an appropriate plan in place, state law will take over, your assets will be tied up in the lengthy and expensive probate process, and will be distributed according to a statute that may not reflect your intent.
By following the suggestions listed below, you can avoid many of these woes.
1. Avoid Probate With a Revocable Living Trust.
A living trust avoids the expense and delay of probate while ensuring the transfer of your assets to your partner and/or friends after death. In a living trust, you name the persons who shall receive your assets (“beneficiaries”) and you appoint someone who will apportion the trust assets after you die (“trustee”). After signing the living trust, you continue to own and fully control all of your assets.
If properly funded, a living trust permits the smooth transfer of assets after death, without the court-supervised probate process. It makes it easier for your partner and for your family. A living trust is less open to challenge than a will and courts are less likely to overturn it since you put the living trust into place and lived with it during your lifetime. Additionally, a living trust does not become public record after you die, so only the beneficiaries have the right to know how you allocated your assets.
You also have the option of keeping the assets in trust for your beneficiary rather than distribute them outright. This allows your beneficiary to have full use and access to the assets during his or her lifetime, and upon the beneficiary’s death, any remaining property can be distributed to other beneficiaries you have designated.
2. Plan for Incapacity with a General Durable Power of Attorney and an Advance Health Care Directive.
A General Durable Power of Attorney (GPOA) can be used to appoint your partner and/or friend to act as your agent to make certain decisions for you. Your agent is empowered to perform the actions which you have outlined in the GPOA, such as: making your mortgage payments, collecting money due to you and depositing it in your bank account, paying bills, and even keeping your business running. A GPOA can be drafted to include as many or as few different transactions as you wish.
If you do not prepare and sign a General Durable Power of Attorney, a court appointed guardian is necessary. The guardianship process can be expensive, time-consuming, and distressing; especially if there is a conflict between your partner and a family member.
In Florida, a Designation of Healthcare Surrogate and Durable Healthcare Power of Attorney (HCPOA) allows you to appoint an agent to make health care decisions for you if you become incapacitated. Without a HCPOA, hospitals can prevent partners from visiting you in the hospital as “non-family members,” especially if any other family member of a hospitalized domestic partner objects to the other partner’s visiting privileges. Thus, it is essential to execute a HCPOA.
The HCPOA also allows you to make important decisions regarding your health care and your body.
It is also important to execute a Living Will and a HIPAA Authorization. The Living Will allows you to make your wishes plain regarding end-of-life decisions. The HIPAA Authorization provides your partner and/or friends with the right to see and get copies of your medical records and information under federal HIPAA regulations, which are necessary for filing insurance claims, obtaining second opinions and making informed healthcare decisions.
An estate planning attorney can help you put an estate plan in place that reflects your needs and desires, including a Revocable Living Trust, GPOA, HCPOA, Living Will, and HIPAA authorization. The right estate plan protects you during life, enables your partner to have meaningful participation in case of an emergency, and provides for your partner and loved ones upon your death in the fastest and most cost effective method available.
Do not wait until later to put your estate in order. Do it now and know that you and your loved ones are taken care of.