Key takeaways

• When planning for you and your family’s wants and needs, consider both current legal protections as well as benefits that are impacted by your state’s rules.
• Having thorough, clear legal documents designating your wishes is critical to safeguard yourself, your finances, and your family.

When putting together your financial plan, will, estate plan, and other personal affairs, it’s important to consider which legal protections currently exist, as well as benefits that may be impacted by the state you live in or changes in laws.

For example, there are many financial protections that are automatically triggered by legal marriage—including, but not limited to, next of kin, inheritance laws, and Social Security benefits. If you are legally married, then many of these rights and benefits will be put in place without additional paperwork. If you are in a relationship that does not have the automatic benefits of a legal marriage, then you will have to do additional paperwork to get as many of the protections and benefits as possible.

However, it’s not simply spouse or partner benefits that need to be protected. While there are now certain protections at the federal level, there are still many states that have not equalized benefits or put in place antidiscrimination laws that affect health care, housing, and access to credit—and there is often an underlying fear that the protections that do exist might change. There are also different rules across America about parental rights, adoption, and other family financial planning options.

That’s why it’s particularly important for LGBTQ+ families to put a strong, legally secure plan into place.

Here's where to start:

Medical directives: Couples who have not legally married will not be afforded "next-of-kin" status for each other, and in the instance of a medical emergency may even be treated as legal strangers. If you are incapacitated, that could mean your significant other would be bypassed at the hospital and a relative would be called instead, even if you are not close with your family. That's why creating medical directives (also referred to as living wills, health care proxies, and medical powers of attorney) is important—even for couples who are legally married—in order to protect their rights and ensure that their medical wishes are followed. Once you've created directives, consider keeping them on file with your primary medical provider and taking them with you when you travel. 

Power of attorney for financial decisions: For financial matters, even your spouse or next of kin would not be able to step in immediately and handle your money in the case of an emergency without a court order if you do not have a properly executed power of attorney.

Wills: A will is critical in that it lays out your specific wishes regarding the distribution of certain types of assets. The absence of such a document may trigger your state's "default" distribution plan, which usually directs the assets to a legal spouse or, if none exists, to your blood heirs (however, these rules vary state by state). Thus, a will is especially important if you're unmarried and have a personal residence¹ that you wish for your partner to continue living in after your death, or if you have assets with no assignable beneficiary that you want to leave to a partner.

Trusts: Putting assets into a trust can help heirs avoid probate, which can be a time-consuming and costly process in some states. A trust can also help to protect the privacy of your beneficiaries and can help you direct when and to whom the assets are distributed, either immediately upon your death or long term.

Beneficiary designations: Beneficiary designations on certain assets (such as life insurance, retirement accounts, and even bank and investment accounts) take precedence over wills or other instructions. That's why it's so important to review these beneficiary designations to make sure that you have named beneficiaries and that they reflect your current wishes.

Titling: Ensure that the title to your assets, particularly property, is coordinated with your will. For instance, a house titled "joint tenants with rights of survivorship" will pass directly to the surviving owner when an owner dies, rather than through your will. Assets titled in an individual's name (absent a beneficiary designation) or as "tenants in common" will pass according to your will.

Domestic partnership agreements: Unmarried partners often do not have any legal protections for their assets if their relationship ends. Domestic partnership or cohabitation agreements and separation plans may help outline financial expectations during the partnership as well as how assets are divided if the relationship ends (keeping in mind that this may cause adverse income tax and gift tax consequences). Note: Not all states allow for agreements by unmarried couples.

Custody issues: Having children is a huge financial consideration, especially if you are considering fertility treatments, adoption, or surrogacy. State laws vary greatly with respect to the parenting rights of LGBTQ+ couples and access to services. Some states may require additional adoption procedures if one parent is a biological parent to a child but the other isn't.

Reach out for help

Take the time to understand the implications of any action you are considering and talk with a qualified professional before making any decisions. You may need help with taxes, financial planning, and legal issues.

Tip: For more help with estate planning, see our section on estate planning.