According to the Gay and Lesbian Association of Retired Persons, there are more than three million gay men and lesbians over the age of 50 in the United States today. Just like the general population, those numbers are expected to explode over the next few decades with the maturing of the Baby Boomer generation.

And, while members of the gay community have made important strides in industry, employment, and in recognition as a market to be wooed by advertisers, the law has lagged in providing equality for gay men and lesbians who hold themselves out to family, friends and the rest of society as couples.

Consequences for Effective Estate Planning

The current denial of equal status for gay couples has serious consequences for those who want the same benefits heterosexual married couples receive in wisely planning their estates.

For example, married heterosexual couples can pass their assets tax-free at death to their spouse because of the Unlimited Marital Deduction, a device for preserving the assets of a marital relationship. Gay and lesbian partners do not have this protection, even in California or Vermont.

There are other estate planning issues of particular importance to gay men and lesbians. Suppose one partner has failed to do the estate planning necessary to make certain that the other partner is protected. The assets may instead be divided up among blood relatives, whether they recognized and supported the relationship or not.

Then there is the matter of HIV. Though medical science has recently made significant strides in longevity for HIV patients, there remains the strong possibility that an HIV-infected person can become disabled or incapacitated. Without proper planning, the person infected with HIV could have a conservator or guardian appointed by the court to govern his or her affairs, instead of a life partner or trusted friend.

Fortunately, there is an alternative. It’s called a Living Trust.

How a Living Trust Works

When you set up a Living Trust, you transfer the title of all of your major assets, including stocks, bonds and real estate, from your name to the name of the trust. You then name yourself as the trustee and beneficiary. While you are alive, you control your assets completely, as you do now.

At death, however, your assets are the property of the trust. This means they can be distributed only according to the terms set forth in your trust document. A Living Trust is an effective way to plan your estate because it ensures that your wishes are carried out.

For example, if a trust is funded and administered by a professional trustee so that it’s in operation years before death, challengers will have a more difficult time winning than with a will. Lengthy operation provides a track record supporting the trustor’s intentions.

A Living Trust can also be used to help preserve wealth. That’s why a Living Trust is the estate-planning vehicle of choice for partners regardless of their sexual orientation. Another key reason many turn to a Living Trust is to avoid a process called probate, Latin for “prove the will.”

A Word About Probate

Many people are under the mistaken impression that if they have a will prepared they will avoid probate. This is not true. Every will must be admitted to probate. Once the probate process begins, your estate is no longer solely controlled by your partner or family in that the court will be involved in the administration of the estate. It becomes the public’s business as probate records are public records. Biographers of Jacqueline Kennedy Onassis, for example, spent countless hours in the record archives of New York State, combing through her will and list of inventoried assets for details about her private life.

In addition, the probate court can approve an executor and appraisers, all of whom will expect to be paid out of the proceeds of the estate. The result is less to be distributed to your partner and loved ones.

Finally, probate can mean a delay of up to a year or more in distributing your assets to your loved ones if your biological family members do not consent.

Creating a Living Trust

The right to privacy and personal control over health care issues and distribution of assets are just some of the reasons gay and lesbian couples should consider a Living Trust as their estate planning vehicle of choice.

Creating a Living Trust custom tailored to your unique needs requires the help of an attorney who focuses his or her practice in estate planning with special attention to the needs of gays and lesbians.

• To avoid the disadvantages of probate, seek out an attorney who emphasizes Living Trusts.
• Evaluate how well the attorney listens as an indication of how attentive he or she will be to your individual situation.
• Choose an attorney with whom you can feel comfortable sharing your hopes, dreams and fears. Creating a Living Trust is an intensely personal experience. Your attorney should have sensitivity about the issues gays and lesbians face as partners and couples and be able to resolve them in a way that will leave you lasting peace of mind.

This report comes to you compliments of the law firm of Barton P. Levine, a member of the American Academy of Estate Planning Attorneys. As one of New York’s leading estate planning attorneys, Barton P. Levine counsels members of the GLBT community every day on the money and tax saving strategies available through solid estate planning.