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What does a traditional family look like? There is no one answer to this question. Modern families are comprised of different people including a mom, a stepdad and kids, a mom, a dad, grandparents and kids, one parent and kids, two moms and kids, two dads and kids, etc. The combination of family members making our families today is truly limitless.
The reality is, there is no such thing as a “non-traditional family”. All there is are loving people sharing a common bond called the family unit.
So why a page dedicated to Non-Traditional Families if there is no such thing? There are over 5 million unmarried couples in the US today, each of which have unique situations and financial planning needs.
Prior to June 26, 2015, same gender couples faced very unique challenges as they pertain to financial and legal planning. Thankfully, the Supreme Court’s decision to allow same- sex marriage nationwide will remove tax and personal-finance headaches that have bedeviled gay couples for years. Gay couples who are married will now be able to file joint state tax returns, inherit property easily and enjoy hospital- visitation rights just like opposite-sex couples can–no matter what state they live in. In his majority opinion, Justice Anthony Kennedy cited these and other practical benefits of marriage as a reason to require states to recognize same-sex marriages.
Estate PlanningWho inherits what? What documents do you need to ensure you don’t accidentally disinherit your loved ones? What are the tax consequences?
Insurance NeedsHow much insurance do you need? Will an insurance company deny your beneficiary because they may deem a lack of insurable interest?
Retirement and Other BenefitsWhat benefits will you be entitled to if your partner dies? How do you make up for this loss of income?
The historic SCOTUS decision on June 26, 2015 finally leveled the playing field for loving, committed and married same gender couples. In addition to the aforementioned benefits, The U.S. Department of Labor announced that it amended the Family and Medical Leave Act so that “spouse” now includes same-sex married couples.
But, while marriage equality across all fifty states is the law of the land, it’s still vital for same-sex couples to proactively plan. All couples, same-sex or otherwise, should take the time to set up wills and/or trusts and clearly set forth their wishes in enforceable legal documents. Planning is particularly important if same sex couples opt not to marry.
Set up durable powers of attorney: This ensures wishes concerning medical care are honored during periods of incapacity.
Establish Trusts: Trusts preserve privacy and help families avoid the delay and expense of guardianship or probate proceedings during incapacity and after death.Plan for Gifts: If a couple wants to leave money to a charity or religious institution, those wishes should be built into their estate plan.Build in Flexibility: Good estate plans include mechanisms that allow for flexibility in administering those trusts to account for changes in the law or changes in beneficiary circumstances after death. This is done through carefully tailored choice of law, decanting, or trust protector provisions.Design Business Transitions: If one or both spouses operate a business or professional practice, make sure plans are in place to allow for the orderly operation or transition of the company in the event of incapacity or death.
Families should always take control of their planning and leave as little to state law interpretation as possible. When assembling your team of professionals, it helps to have the right advisers to help you ensure that your loved ones are protected in the event something happens to you and treat you with the dignity and respect that you and your family deserve.
Other Useful Resources
If you're a member of the LGBTQ+ community, your financial and estate needs may present different challenges from other married and partnered couples.