Estate planning for non-traditional married clients, such as those in same-sex marriages, can be complex, especially in the face of evolving legal landscapes and potential changes in the recognition of such unions. Given the shifting legal grounds, estate planning attorneys must employ a combination of foresight, flexibility, and a deep understanding of both state and federal laws to effectively serve their clients.  Many clients have strong relationships that do not depend on de jure status.  Attorneys should craft estate plans with a view to implementing their clients’ intentions, even if applicable protections for non-traditional relationships change. For more detail, a webinar on this topic is available at the link below.

Related Speaker Series Webinar:
“Bullet-Proofing an Estate Plan for Non-Traditional Married Clients”
February 19, 2025, 4pm ET

The Importance of Anticipating Legal Changes

Recent developments and uncertainties in the legal recognition of same-sex marriages highlight the necessity for adaptable estate planning. The legal status of same-sex marriages can impact a broad range of estate planning issues, from tax implications to inheritance rights.  Support for same sex marriages hangs by a delicate thread, since United States v. Windsor and Obergefell v. Hodges were decided by slim majorities, and many of the justices in the majority are no longer on the Court but have been replaced by Justices reputed to be skeptical of this precedent.  The makeup of Congress which repealed the Defense of Marriage Act (enshrining support for traditional marriage in federal law) in favor of the Respect for Marriage Act has likewise changed.

Attorneys must consider potential future changes in the law that could retroactively affect the validity of these marriages.  Recent developments in the Supreme Court make it more likely than ever that prior decisions approving these unions might be revisited, taking the issue back to the states, with different results depending where the clients are domiciled.

If the law changes, we don’t know what form that change might take.  Would existing marriages be recognized?  Would states in which a same-sex marriage is no longer recognized still be required to recognize a marriage performed in a different state where it is valid?  One approach for estate planners would of course be to wait and see if the law changes, and how.  Only then can we advise clients with some certainty on how they should proceed.  But in the meantime, what can clients do?

Strategies for Bulletproofing Estate Plans

Another strategy is to provide the equivalent status to marriage for persons in non-traditional marriages:

1. Creating Rights and Privileges through Documents: While marital status can confer certain automatic legal rights, it’s possible to structure estate plans that replicate many of these rights through contractual agreements and careful drafting. For non-traditional couples, it’s crucial to craft documents that anticipate the possibility of legal shifts, ensuring that partners can retain inheritance rights, decision-making powers, and other privileges typically granted to spouses.  It may be best to not refer to a spouse as a spouse, husband, or wife, at all and instead refer to the person by name only.  That way, a change in marital status arguably has no impact on the estate plan, as no one could argue that references to a spouse created ambiguity.
2. Tax Considerations and Asset Transfer: The federal estate tax marital deduction (and the corresponding deduction at the state level in states with a state estate tax) may not apply if a marriage’s legal status changes. Estate plans should therefore include mechanisms to manage potential tax liabilities effectively. For instance, using trusts or other legal structures can help mitigate the impact of changes in tax status on asset transfers between partners.  Lifetime gifts to reduce the estates of wealthier clients may make more sense than relying on the marital deduction to postpone tax until the surviving spouse’s death.
3. Durable Powers of Attorney and Health Care Directives: Given that legal rights to make medical decisions for a partner can be revoked if a marriage is no longer valid, establishing durable powers of attorney and health care directives with the proper parties named as agents is paramount. These documents should explicitly grant decision-making authority to a spouse/partner, regardless of future marital status, ensuring continuity in critical situations.  Of course, this also means that if a relationship ends through divorce, the client would need to immediately update their documents to avoid an ex-spouse having power/control that was unintended.  For example, some clients may appreciate statements that state that documents continue to apply as written even if the parties are no longer married in the future, but only if the marriage ends due to a law change.  If the marriage ends due to divorce, the estate plan would require revision.  A well written letter discussing the clients’ continuing duties should be an integral part of an estate plan.
4. Ensuring Continuity in Property Ownership: Jointly held properties might be subjected to unfavorable tax treatment if the owners are no longer recognized as married. Estate plans might, therefore, utilize joint tenancy with right of survivorship or consider establishing a trust to hold property, which can provide both partners continuous, stable ownership rights.  In community property states, community property cannot exist if a marriage is not recognized; hence, how property is owned should be considered, particularly in states where a same-sex marriage is less likely to be recognized.

Practical Implications and Client Discussions

Estate planning for non-traditional married clients requires not only a strategic legal approach but also sensitive and comprehensive client consultations. Attorneys should discuss:

• Potential Legal Changes: Educate clients about how shifts in the legal landscape could impact their estate plans.
• Flexibility and Updates: Emphasize the importance of regularly updating estate documents to reflect changes in personal circumstances and potential legal shifts.
• Long-Term Security: Strategies should focus on ensuring long-term security and rights for partners, regardless of the legal recognition of their marital status.

Conclusion

As the legal recognition of non-traditional marriages continues to evolve, estate planning attorneys play a crucial role in safeguarding the interests and rights of their clients. By anticipating potential legal changes and employing flexible, robust planning strategies, attorneys can provide their clients with stability and security, regardless of future legal developments.  Interactive Legal documents can easily be modified to accomplish many of clients’ estate planning intentions without relying on marital status.

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