For Richer Or Poorer: Advice for Couples Planning on a Worry-Free Future
This is a guest post from Robert A. Dienelt, a Financial Advisor and Accredited Asset Management Specialist (AAMS) from Jackson, Mississippi. While Family Fairness usually discusses the legal side of family planning, Robert will be talking about financial considerations all couples should make before marrying, registering their civil union or domestic partnership, or using legal documents to grant their partners rights.
Every spousal financial relationship is unique. Through the years, couples develop their own systems for handling financial matters. Sometimes it is one partner's responsibility to manage all finances, sometimes the other's, and sometimes a combination. Whatever the situation, certain information should be shared.
Couples should consider mutual responsibility for and knowledge of:
- Retirement plans: Take time to fully acquaint each other with employer retirement benefits. Both partners should have current knowledge of pension plans, 401(k) accounts, and IRAs. For a complete picture of expected retirement benefits, become familiar with each other's Social Security benefits as well. Understanding retirement benefit information will bring clarify and facilitate retirement planning.
- Credit card documents: This one can be scary. Some may prefer to not know how much credit card debt their spouse has accumulated. But it's wise to know where to find account numbers in case one loses his or her wallet and needs the other to help cancel the card. Also, mutual awareness of credit card debt amounts will help with developing a family's overall financial plan.
- Power of attorney: It is generally a good idea to have power of attorney on any individually owned assets, just in case one partner becomes ill or otherwise unavailable. Power of attorney can be limited to specific functions for a certain period, such as selling stocks or withdrawing money while traveling. A broad document that authorizes each partner to handle almost any situation in the other's absence is also a consideration.
- Wills, trusts, and life insurance: It's especially important to share information about wills, trusts, and life insurance if either has been married before. There could be restrictions on how some assets may be used and beneficiaries left unchanged by mistake. Most important, make sure each partner knows where to find the will and can easily access it if something were to happen.
- Health insurance policies: Most insurance companies will cover care administered in the first 24 to 48 hours of a medical emergency, even if the coverage details have not been sorted out. But the situation isn't as clear with hospital visits that are less urgent. If each partner is covered under a different insurance plan, both should be familiarized with the requirement "hoops" they may have to jump through. If one spouse had a sudden illness, would the other know which doctor to call first to get an okay for treatment? If not, they risk running up big bills at an out-of-network doctor.
- Business loans: If one spouse owns a business or is a partner in a professional firm, both should know about any personally guaranteed loans. It is critical to be aware of liabilities since household assets can be hit if the business can't repay the loan.
While many don't necessarily need to know everything about their spouse's finances, maintaining a working knowledge of the above points can help maintain proper, balanced control over a family's financial affairs.
Have a question, comment, or response? Share your thoughts.How to take care of your children after you die
Certainly no one enjoys acknowledging their mortality. But there is a lot more to estate planning than simply thinking about your own death. Young parents are particularly guilty of not making arrangements in the event of their passing, which can leave young children in a difficult place financially and emotionally. Gay and lesbian parents often have particularly tragic cases, especially when their families cannot be held together by the benefits of marriage.
Fortunately, there are three relatively quick and easy steps to take that can help ensure that your children will be taken care of:
- Pick and name guardians - Make a list of short- and long-term guardians you want taking care of your children if you pass away. This will enable you to ensure that your children will be raised by the persons of your choice rather than, for example, a parent with whom you ideologically disagree. You can select your partner to be your child's guardian, which is especially useful if your partner has not completed a second parent adoption (which he/she should). You can also name siblings, friends, or other members of your family to care for your children in the event that both you and your partner are not able.
- Get Life Insurance Policy - Your selected guardian will likely not be prepared for the sudden extra expense your children will bring. To ensure that your child's quality of care is still sufficient, a life insurance policy helps to smooth the financial transition. For just a small amount of money each month, you can receive peace of mind that your children's guardian will have the financial resources to care for him or her. This is especially necessary if you are the primary earner in the relationship and your partner would need to care for your children.
- Leave behind mementos - Surely we plan to be around for all of the major stages in our child's life, but in the event of our early passing, your child may be deprived of having his or her mother or father with them during those important times. Leaving behind voice or video recordings or letters is a wonderful gift for a child who may have been too young at the time of your death to remember you and your life lessons. Leaving behind such a legacy will mean your child can still benefit from your values even if you are not there to provide them.
A good estate planning attorney should be able to assist you in all of these areas, as well draft a will or trust to handle your property. All of these steps just require a bit of pre-planning to help avoid a great deal of burden later on. While planning for the worst is difficult, the comfort of knowing that things will be taken care of is a substantial reward.
Have a question, comment, or response? Share your thoughts.How ‘Don’t Ask, Don’t Tell’ affects gay families and what to do about it
Family Fairness was created shortly after President Obama's election, and I believed that this blog would never have to address Don't Ask, Don't Tell (DADT), the policy responsible for the discharge of approximately 13,000 gay and lesbian soldiers. Sixteen years after its inception, the homophobic law remains in place, burdening an estimated 150,000 families of forcibly closeted servicemen and women. In honor of Memorial Day, and to recognize the sacrifice of the many gays and lesbians in our armed forces, I would like to take a moment to explore the impact of DADT on families, and what can be done to help alleviate the problems until the policy is revoked.
DADT states that "[t]he military will discharge members who engage in homosexual conduct, which is defined as a homosexual act, a statement that the member is homosexual or bisexual, or a marriage or attempted marriage to someone of the same gender." Gay and lesbian members of the military must keep their families a secret for fear of discharge. One gay service member even explains that putting up a photo of your partner or child can be a risk because it provokes questions from peers and superiors. This forced secrecy means LGB soldiers cannot request the benefits available to heterosexual families for their own partners or children. Families of gay and lesbians are barred from receiving survivor benefits, living in military housing, and having access to the Department of Defense's support network. Even more troubling, children face often impossible hurtles in receiving healthcare, education, and other necessities typically furnished to military families. Special accommodations for soldiers with ill or pregnant family members or special needs children are withheld from gays and lesbians who must keep their relationships concealed.
Unfortunately, many of the obstacles these families face cannot be overcome while DADT is in place. However, there are a few steps that can be taken. Gay service members and their partners are advised to consult a competent attorney who can assess their individual situation and proscribe a plan. Though attorney-client privilege prevents your military judge advocate general (JAG) from sharing your sexuality with your superiors, some gays and lesbians still feel uncomfortable opening up to a military lawyer. For them, a private practitioner would be a better choice, as the federal government has absolutely no jurisdiction over these conversations.
The most important thing to consider is the variety of alternatives to marriage available to same-sex couples, particularly the rights that can be obtained during estate planning. Setting up a health care proxy will give your partner the ability to make medical decisions for you in the event that you are unable. A durable power of attorney agreement goes even further, and enables your partner to make almost any legal decision for you on your behalf. Naturally, it is also a good idea to prepare a will or trust that can provide for your partner and family in the event of your death. Finally, if you and your partner share a child, ensure that one of you has gone through a second parent adoption so that both of you are able to care for him or her.
If these documents are prepared with a private attorney, the military will likely never be aware of their existence. Even if they do come to light, none are indicative of your sexuality in the same way that a marriage, civil union, or domestic partnership would be. While not as simple, easy, or comprehensive as marriage or marriage-like institutions, the above legal alternatives help to ensure that some of the most important rights and privileges still protect you and your family. Again, an attorney who specializes in this area can help to draft whatever documents would be most necessary given your situation.
DADT puts an increasingly painful burden on families of gay and lesbian soldiers as more states begin to offer relationship recognition. Fortunately, legal alternatives do exist. And though the military teaches LGB service members to ignore their sexuality, ignoring the risk your family faces without the aid of these legal structures is unwise.
Have a question, comment, or response? Share your thoughts.Three Estate Planning Strategies for Same-sex Couples
Though no one likes to think about ones own mortality, it is important for same-sex couples to do some advance planning in the event of their death or incapacitation. Those couples living in states that no not permit marriage — or do not offer civil unions or domestic partnerships that include inheritance rights — especially need a will. Keep in mind that when there is no legal recognition of same-sex unions, gays and lesbians are often left with nothing upon the death of their partner. To avoid losing your home, your personal belongs, and, in some cases, your children, ensure that both you and your partner begin the estate planning process as soon as possible.
First, two common questions:
What is estate planning?
The process of estate planning merely refers to making decisions in life about what will happen at death. In addition to enabling you to control the disposition of your assets so that your belongings will go to the people you want, estate planning documents are also useful for naming the individual you want to make legal decisions for you should you become incapacitated, outlining your wishes when it comes to medical treatment, and indicating who you would like to parent your children should you pass away.
Isn't estate planning just for the rich?
Absolutely not! The word 'estate' tends to evoke imagery of mansions and diamonds, but the truth is that everyone, even you, has an estate. In legal terms, an 'estate' simply describes the collection of all your property at death. This includes your car, your house, any bank accounts, stocks, a stamp collection, your clothing, your pet, and anything you can think of that you own. The value of ones estate can be as small as a few thousand dollars, or as large as several billion; you do not have an 'estate' just because you are rich. While the wealthy tend to take estate planning more seriously as there are taxes they wish to avoid, same-sex couples also need to seriously consider this process because your partner often has no legal rights or claims in the event of your death.
Incorporating the following three strategies in an estate plan helps to ensure that all of ones goals are met:
- Choose an attorney who will work with you
- Plan for a system to update your estate plan
- Include a living will
Choose an attorney who will work with you
Be wary of so-called "will mills" that act as legal document services and offer to send you a prepared will after answering a few questions about your plan. Estate planning is about more than just drafting a legal document; it is about a competent attorney figuring out what your plans are and what will be best for you and your family. Many estate planners simply focus on reducing your tax liability, but a good counseling-oriented lawyer will interview you and make sure to incorporate appropriate and tailored protections for catastrophic disability, divorce or separation, remarriage or re-partnership, a plan for any minor children, and other considerations that go beyond simple property distribution. If you feel that you do not have an attorney who is listening to your needs and goals and ensuring that these needs and goals are reflected in your estate plan, pick another attorney.
Finding a lawyer with experience in gay and lesbian estate planning is wise as well. Same-sex couples face a few hurdles that opposite-sex, married couples do not, and an attorney who is unaware of this may leave gaps or errors in your estate plan. Any mistakes your lawyer makes will not become apparent until you are deceased and it is too late, so avoid the future headaches and select an experienced LGBT estate planner.
Plan for a system to update your estate plan
Many individuals make the mistake of drafting their estate plan and then never updating it. Changes in your wishes, the property you own, and your relationships (marriage, divorce, or separation) should be reflected in updated documents. Not all changes require a complete re-execution of your will, but some may. This is another reason a competent attorney is preferable to a "will mill". Many estate planners offer a service where, for an annual fee, you can return to your attorney to make changes to your estate plan. Your attorney will also update your will to comply with changes to the law. While an annual fee may sound undesirable, especially to a 30-year-old not planning to die for a while, the expense is usually less in the long run as you do not have to later pay for an entire redrafting if your situation ever changes.
Include a living will
The horror stories you hear about gay couples being denied the ability to be together when one is in a hospital room can usually be avoided with a living will. Often also called "medical powers of attorney" or an "advanced directive", this document enables you to name the person you would like to make medical decisions for you in the event of your incapacitation. Many bitter battles have been fought between an LGBT individual's family and his/her partner when there is a disagreement about whether or not to 'pull the plug'. You can save a lot of heartache by making your wishes clear and naming an individual you can trust to carry out your wishes. This person will also make decisions for organ donation and the disposal of your remains.
While it is easy to write off estate planning as necessary only for the elderly or terminally ill, remember that tragedies can happen in an instant. Many gays and lesbians have had to deal with legal troubles in addition to their personal grief when a sudden accident strikes their partner. You can give both you and your loved ones additional peace of mind by taking care of your estate plan early.
Have a question, comment, or response? 1 person does.How to deal with a hostile judge
When you die, a judge will determine how your property is distributed through a process called probate. Often, these judges face a monumental caseload and can spend very little time reviewing your circumstances before your estate appears in court. While judges are entrusted with making fair and just decisions, we must remember that judges are people too, and are subject to any of a number of personal biases and prejudices that any person may have.
What this means for same-sex couples -- especially those in states that do not permit marriage or civil unions -- is that you may appear before a judge who is hostile to gay and lesbian individuals and is under no real obligation to honor your relationship.
Fortunately, judges tend to be good people who are truly committed to doing the right thing. Those that make rulings out of pure animus are rare. It is important, then, to humanize your position and let the judge see you not as the "gay lover" or, even worse, as the total stranger, but as who you really are: the loving and committed partner.
In probate proceedings, try to answer these five critical questions for the judge:
- Who are you? Often people overlook this simple question because they and all of the other people involved in the proceedings already know who you are. But remember that judges are often under-prepared. While it might not seem particularly relevant to the issue of property distribution, judges need to know who you are in order to make their decision.
- What is the controversy, in one sentence? In contested probate proceedings, there can be any number of different claims parties are making. It is important to know the issues that people are going to raise and be able to summarize your position and interests succinctly.
- Why are you here? This is an especially important question for same-sex couples when facing a judge who does not really understand your relationship to the deceased. Hostile judges may view you as someone merely trying to unjustly claim property from a grieving family. It is vital to tell your story and explain fully exactly why you believe that you are entitled to your partner's property.
- What outcome do you want? Explain to the judge clearly what it is you want to come of the proceedings. If you want to make sure you can still live in the home you and your partner have shared, say so. If you want to continue to care for the child you and your partner have reared, make that clear. While it all may seem obvious to you, a judge may not understand without you explaining it.
- Why should you get it? This is the most important question to answer for a hostile judge. This is your opportunity to tell your story and appeal to the judge's sense of right and wrong. While as a matter of law you might not necessarily be entitled to a piece of real property, explaining that it has been your and your partner's home for several years and that you have both contributed equally to it makes it feel much more equitable to allow you to continue to keep it.
The most important thing to do, however, is to retain the aid of an attorney with experience not just in probate, but who can also handle your specific needs and can address the particular difficulties same-sex couples face. While these tips are helpful generally, nothing can replace the advice of a lawyer who knows your particular situation.
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