Domestic Partner Planning
Unmarried couples, regardless of gender, face many of the same issues that married couples face – sharing of assets and expenses while they are together, division of assets in the event that the relationship does not work out or in the event of death and caring for each other during a health crisis, in their senior years, and finally, participation in funeral arrangements and estate administration (Executor of Estate) at their passing.
For married clients, these issues can be addressed with a Prenuptial Agreement that deals with the marital rights that are created by law at the time of marriage. Examples of these marital rights are alimony and division of assets during life, and, at death, elective share, intestate share, homestead, exempt property, family allowance, preference in appointment as personal representative of an intestate estate, and spousal rights in retirement accounts.
Seniors often choose not to marry so as to maintain their rights to public benefits, such as social security and Medicaid.
Other clients choose not to marry because they have had unsuccessful marriages in the past. Some feel that they just “do better” when they live together without a formal marriage or simply do not want to put their assets at risk in another divorce proceeding.
Other clients – Lesbian, Gay, Bi-Sexual or Transgender clients (LGBT) – may not be able to be legally married.
For all of these couples, often called “Domestic Partners”, many of their concerns about asset sharing can be addressed with a Domestic Partnership Agreement. But even without a Domestic Partnership Agreement it is possible, with “Legal Equivalents”, to create approximations of many of the same rights that married couples enjoy as to asset sharing, health care decisions, incapacity and ultimately, participation in management of their Partner’s estate at death, and funeral arrangements.
A few examples will illustrate:
Rights Upon Death: A Domestic Partner will have essentially no rights to share in the probate estate of the other partner upon the other partner’s death. The Legal Equivalent here can take many forms – a Will, joint tenancy, life estate, joint accounts, accounts with a “Transfer on Death” designations, a life insurance policy, annuity, revocable trust, beneficiary on a Retirement Account.
Personal Representative of Estate: A legal spouse will have a preference, under Florida statutes, to be appointed as the Personal Representative (Executor) of a decedent’s intestate estate. Here, the Legal Equivalent is a Will that names the Domestic Partner as Personal Representative.
Funeral Arrangements: In making these arrangements, Florida gives preference, in their statutes, to the spouse, blood relatives, and then a long list of other possibilities at the end of which is a “friend or other person”. The Legal Equivalent here is a written directive and nomination by the Domestic Partners, naming each other as the person authorized to make these decisions.
Health Care: In making health care decisions for a patient, Florida gives preference to the spouse. Next in line are adult children, parents, siblings, adult relatives, and next, a Domestic Partner (“close friend” as defined in the statute). The Legal Equivalent here is a Health Care Designation naming the Domestic Partner as Health Care Surrogate.
Guardianship for An Incapacitated Person: Where a Guardian is required for an adult person, Florida gives preference to appointment of a spouse or relative, and then a long list of others (not including a Domestic Partner). The Legal Equivalent is a Designation of Pre-Need Guardian form.
Estate and Gift Tax Planning: Estate and Gift tax planning is more of a challenge because there is no marital deduction for unmarried persons. However, the exemption limits are currently (at least through the end of the year) at $5,000,000 per person, so these taxes do not affect many people, married or unmarried. That said, there have been strategies developed for large estates that take advantage of the fact that the Domestic Partners are not, in fact, related. These opportunities exist because certain kinds of transactions have penalties associated if they are engaged in by “related persons”.
Another document that is sometimes used is a Durable Power of Attorney, but we see these less often with Domestic Partners.
As we stress in our Seminars and client meetings, much of the planning we do for people is not just about avoiding probate and distributing assets at death — it is about planning for life.
Contact West Palm Beach Domestic Partner Planning Attorney Gregory C. Picken to discuss Domestic Partner Planning or any other estate planning, probate, trust or guardianship issue you may be facing.