Estate Planning for “LEGAL STRANGERS” – don’t get caught unprepared! By Christina Mae Olson, CFP®

Estate planning covers many things. You don’t have to have an “estate” to do some crucial planning. It doesn’t matter if you are single or coupled, rich or poor or young or old. It’s important to do a little “contingency planning” to take care of those situations that people never think are going to happen. Lifetime partners break up. Accidents happen. People get sick and die. Who is going to help you take care of your affairs when you aren’t able to do it for yourself (for whatever reason)? LGBT’s and our chosen families are considered “legal strangers” in most jurisdictions. We need to take care of a few things that will allow states to recognize us because the law doesn’t do it for us. Below is a short list of estate planning tools that all LGBT’s should seriously consider. Next month, I’ll add a few more.

PARTNERSHIP/RELATIONSHIP AGREEMENT. Also called a “cohabitation agreement.” This is as good as a marriage certificate in a court of law. It’s an enforceable contract. You and your significant other should prepare a document that explains how a few things will work in your relationship. Do this early on – before you start to co-mingle your money and your things. This agreement should clarify who pays what of your joint financial obligations. How will you share household expenses? 50/50? What if one of you earns more money than the other? If one of you supplies the cash for your first house down payment – will that be repaid if you split up? This document not only spells out how to divide the costs of your union but also determines who gets what if you decide to split up later on. If you can agree on these things now, in writing, then you can defer to this document later if you grow apart. Make the decisions now (and revise as needed). You won’t be able to agree on dividing up anything after your girlfriend has an affair and one of you is kicked out!

MEDICAL POWER OF ATTORNEY (POA). You get to appoint someone to make medical decisions for you if you cannot make them for yourself. A hospital won’t necessarily let your lover make decisions for you, if you can’t. Put it in writing and tell your appointed POA representative what your wishes are. Give a copy to your doctor.

LIVING WILL. This is how you tell your loved ones (and medical folks treating you) what sort of life-sustaining procedures you want performed – without which you may die (CPR, ventilator, tube feeding). This can be part of the medical POA and is also called a health care proxy. You must talk about these things with your loved ones so they know what your wishes are. Don’t make them guess at a time like this.

DURABLE POWER OF ATTORNEY. This is absolutely necessary. The durable POA gives authority to anyone you choose to take care of your financial affairs when you cannot. Without this POA – your bank accounts and credit cards will be frozen. Your POA representative will be able to pay your bills for you and make other financial decisions for you until you can do it for yourself again.

I suggest you hire a lawyer to help you with these documents. You can’t afford to make mistakes. Next month, I’ll cover the following:

Chris Olson is a licensed financial planner with a fee only practice. Contact her if you want a referral to an LGBT – friendly lawyer who can help you prepare all of these documents correctly! CMOney@centurytel.net or 608-525-9818.

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