Planning for Domestic Partners

It was a nice trip to Colorado this past week, one of the most beautiful states you can travel to during the summertime. I highly recommend a whitewater rafting trip such as the one we took down the Colorado River, which provided us some of the most majestic scenes you will ever see in the U.S.

One of the things that I encountered in Colorado during my stay at the Broadmoor in Colorado Springs was a gay couple who overheard me speaking to someone about estate planning. One of the ladies asked what would happen to her assets if she died without a Will. After asking a few questions about children (none), potential marriage in a state that allowed for gay marriage or civil unions (no intent) and assets (mostly cash and real estate in her name), I had to inform her that without a Will, most of her assets would pass according to the intestacy laws of her home state, which meant that her partner would wind up with none of the probate assets.

If you have a domestic partner, gay or straight, you are more of a candidate for a Will and basic estate planning than even married couples or a single person with children. Why? Because most (if not all) states’ intestacy laws do not account for domestic partners. You are treated as if you died single regardless of what you consider yourself in your relationship. A married person in Texas who dies without a Will usually winds having all his property (assuming it is community property) passing to his surviving spouse, so the danger of not having a Will is less extreme for that person.

Another tricky scenario—what if the person who died had a child, and the natural surviving parent of the child was unknown (e.g., the child was adopted or the child was the product of in vitro fertilization? Who would be named as the guardian of the child? The law in Texas provides a laundry list of persons entitled to be named, starting with the surviving parent, then grandparents, then siblings, and so on, but there is no mention of a domestic partner. If a sibling of the decedent asserts a claim to be guardian, it could result in a very costly court battle. A Will and/or a Designation of Guardian in Advance of Need could eliminate this problem.

Two other situations also present themselves: Incapacity in general and incapacity for medical purposes. If a domestic partner becomes incapacitated, the law in Texas does not provide for the incapacitated’s partner to be appointed Guardian of the person or estate. Nor does it provide for a partner to be able to make medical decisions on behalf of the incapacitated person. These could be resolved easily through a general power of attorney and medical power of attorney in favor of the partner.

Finally, don’t forget about non-probate assets when planning for a domestic partner. Any beneficiary designations on an IRA, life insurance policy, annuity, or employee benefit plans should be updated to reflect the partner as the primary beneficiary (if that is desired). Other miscellaneous items to also remember are things such as putting the partner as a signor on the safety deposit box or providing for a joint bank account, and providing for a partner to have the right to dispose of the body either by cremation or burial on their partner’s death.