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By Christine Benz | 08-29-2012 01:00 PM

Estate-Planning Tips for Same-Sex Couples

Family-law attorney Jill Metz discusses how same-sex couples can work around legal pitfalls regarding beneficiaries, Social Security, children, and more.

Christine Benz: Hi. I am Christine Benz for Morningstar.com. Estate planning for same-sex couples is a highly complicated issue. Joining me to share some guidance in this area is Jill Metz. Her firm specializes in legal guidance for same-sex couples.

Jill, thank you so much for being here.

Jill Metz: Thank you for inviting me.

Benz: Jill, let's start with the do-nothing approach, which is the approach that I think a lot of people take to estate planning. They don't lay any groundwork for an estate plan. What are the pitfalls for anyone who does nothing in the realm of estate planning, but perhaps especially for same-sex couples?

Metz: The landmines are more extreme for same-sex couples who don't have the legal recognition that happens in marriages because the law doesn't provide any protections, so there is no backup position. There is no estate transference or that would happen by state law to spouses or non-legal children in those relationships. So, without taking an affirmative step and putting some documents in place, you're basically leaving those people unprotected.

Benz: So, say you are in a committed same-sex relationship. You pass away, and you haven't left any estate-planning groundwork. Your assets wouldn't necessarily pass to your partner, which might be in accordance with your wishes; they might go to siblings, parents, or someone else.

Metz: They will absolutely go to biological family and not to your children in those relationships, who are not legally yours, or that partner.

Benz: What would the documents be that you would want to put in place to ensure that transferal of the assets to the person who you would like them to go to?

Metz: Well, it's really important to sit down with a professional and start with what assets you have--what they look like, how they're titled, and where the designations would transfer--so that you can make a complete plan. But in terms of documents that a lawyer would help prepare, you are looking at at least a will, if not a trust, to have everything private and outside of a probate process. Durable powers of attorney for health and property are absolutely necessary. Otherwise that person who is the significant person in your life gets closed off from all major decisions. They get excluded from your hospital room. They get excluded from your finances, and they're left out in the cold.

Benz: Those powers of attorney essentially say, in that case you can specify, "I would like this person to make financial decisions on my behalf if I am unable to do so. I would like them to make health-care decisions on my behalf."

Metz: It turns the control and the relationship 180 degrees. So, instead of the person being outside looking in, they are inside doing exactly what you expect them to do.

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