Advance Planning Advocacy Tools and Estate Planning Basics for LGTBQ+ Older Adults

Part one of this article provides an overview of various advance planning tools available to LGBTQ+ older adults (OA) and their caregivers, such as health care directives, durable powers of attorney, HIPPA waivers, representative payees, visitation directives, and provisions for guardianship. Putting these tools in place ensures that your healthcare and financial wishes will be followed if you are incapacitated.

Part two of this article provides a brief overview of common estate planning tools like wills, trusts, joint tenancy with right of survivorship, bank account beneficiaries, life insurance and retirement beneficiaries, and funeral directives. An effective estate plan creates a clear picture of how your property and assets will be distributed after you die. This relieves your surviving loved ones of the stress of guessing what your wishes were.

I. Advance Planning Advocacy Tools for LGBTQ+ Older Adults and Their Caregivers

Outside of the legal rights afforded by marriage, relationships with caregivers and chosen family are legally precarious. Without the right advance planning tools in place, the law views anyone other than your next of kin as a “legal stranger." Even if you do have positive relationships with your legal or biological family members, if you have a medical emergency and are suddenly unable to communicate, your preferences for your finances, living arrangements, and medical treatment (including who should and should not provide long-term assistance and care), may not be honored. 

However, a variety of legal tools exist to ensure that hospitals, long-term care facilities, and other places will respect and carry out your wishes.

One of the key messages that we want to get across to LGBTQ+ older people is that they should consult a legal professional to engage in advance care planning. Many LGBTQ+ older people are estranged from their families of origin and/or rely on families of choice. When they are unable to engage in medical decision-making on their own, it's important to ensure that those charged with making those critical decisions have their best interests at heart.

                                                     - Aaron Tax, SAGE Managing Director of Government Affairs & Policy Advocacy

The law requires healthcare providers to respect advance planning documents when they are properly executed, including those presented by unmarried same-sex couples. Having all documents prepared in advance of a medical emergency is particularly important if you are unmarried, without children, and rely on your family of choice for assistance. 

Even if you are legally married, you should take advantage of all available planning tools to preserve your autonomy, preferences for long-term care, and ability to age in place and with dignity. If you are an LGBTQ+ caregiver for an older adult, there are resources for how to talk to your loved one about planning for emergencies.

Health Care Directive

A health care directive and living will, also called an “advance directive," is a legal document (or multiple documents) that specifies a person's medical treatment preferences, including life-sustaining measures like when to allow blood transfusions or continue life support. 

The health care directive and living will notifies providers, family members, and caregivers what life-saving medical treatment you want (and don't want). Providing everyone advanced notice of your wishes helps avoid uncertainty and dispute between your family, friends, and caregivers.

The basic form requirements for health care directives vary from state to state, and many hospitals keep living will forms on hand for patients to fill out. Whenever possible, create your health care directive while you are healthy, so it is available in the event of an unforeseen illness or medical emergency. Additionally, consider adding instructions that cover your preferences for end-of-life and funeral arrangements so those will be readily accessible to your loved ones after your death.

Durable Power of Attorney

A Durable Power of Attorney (POA) is a legal document where you empower another person (or persons) to make medical and/or financial decisions on your behalf. The person granting decision-making power (you) is the principal. The person(s) empowered to make decisions for you is the agent, or attorney in fact. 

You may either create one durable POA covering both medical and financial decisions or create separate durable POAs for each role. As Principal, you are free to change or revoke a durable POA at any time before a court declares you legally incapacitated. 

Basic form requirements for POAs vary from state to state. If you live in a state that has adopted the Uniform Probate Code, you may also use your durable POA to designate the person(s) whom you wish to serve as your guardian should you be declared incapacitated by a court.

Durable Medical Power of Attorney

A durable medical POA, also known as a health care proxy, empowers your agent to make medical decisions on your behalf beyond what is covered in a health care directive. A medical POA grants your agent the ability to make medical decisions for you when you cannot communicate in the event of a medical emergency or if you are otherwise incapacitated. A medical POA typically allows your agent to:

• Admit or discharge you from a hospital or long-term care facility
• Consent or withdraw consent to treatment, including medications and surgery
• Speak directly with your doctors and other healthcare providers
• Access your medical records
• Enforce your healthcare wishes in court

Before you designate someone to be your agent for a medical POA, it is important to have an open and honest conversation with that person about your medical treatment preferences, especially when it comes to life-saving procedures and end-of-life care. Select a person who you know you can trust to honor your wishes, as they will need to interact directly with your physicians and next of kin who may disagree over the treatments and procedures you should or should not have.

Many people avoid candid discussions about end-of-life care to avoid sadness or discomfort. However, it is important to talk with someone you trust and put a medical POA in place to avoid uncertainty and conflict between your next of kin and chosen family should you become unable to speak for yourself. 

Without a medical POA, your physicians will only consult with next of kin on medical and long-term care decisions. If you prefer that your unmarried partner or chosen family enforce your preferences, only a valid durable medical POA or guardianship order will allow them to do so.

Durable Financial Power of Attorney

Similar to a durable medical POA, a durable financial POA empowers your agent to make financial decisions on your behalf if you are incapacitated. You can tailor this type of POA to fit your unique financial circumstances. Generally, a durable financial POA allows your agent to:

• Access your bank accounts and credit cards
• Pay your bills and taxes
• Manage and invest your money
• Collect your government benefits
• Purchase or cancel your insurance
• Buy, sell, and manage your property

As with medical decisions, it is important to grant your durable financial POA to someone you trust and who you discuss your preferences with ahead of time.

Without a valid durable financial POA, most states will only recognize married partners or next of kin; your unmarried partner or chosen family will have no legal say in your financial matters. If you want your unmarried partner or chosen family to have a say in your financial decisions, you must say so in writing.

While married partners generally have a say in certain transactions, many banks will require your spouse to be either a joint account holder or have prior authorization on record to access your accounts, even with a valid durable financial POA. It is important to take the extra step of contacting your banking institution(s) to find out if there are additional forms or requirements for your agent to access your accounts.

HIPPA Waiver

Even with a health care directive and durable medical POA in place, healthcare providers and insurers are required by law to keep your medical records and health information strictly confidential. Under The Health Insurance Portability and Accountability Act (HIPPA), your healthcare provider may require you to sign a medical records release form, often referred to as a “HIPPA Waiver," which relieves your providers from liability after they release your confidential medical records and health information to your agent.

Visitation Directive

Federal law explicitly provides that hospitals and long-term care facilities must recognize your right to designate your same-sex spouse or partner, chosen family member, friend, or caregiver for visitation, as well as your right to withdraw or deny that designation at any time. This law applies to all healthcare facilities that receive Medicaid or Medicare funding (most medical facilities in the United States).

A visitation directive is a document that tells your healthcare providers who is and who is not allowed to visit you at the hospital or long-term care facility. 

Although federal law requires long-term care facilities to respect a patient's desires regarding who may visit and may not deny or limit visitation based on sexual orientation or gender identity (SOGI), many healthcare providers and staff have yet to receive accurate information on this legal obligation or cultural competence training on LGBTQ+ affirmation and inclusivity. 

In addition to your healthcare directive and durable medical POA, a visitation directive is supported by federal law and will increase the likelihood that your choices will be honored.

Advance Designation of Representative Payee

If you plan to apply for or already receive monthly Social Security benefits, including retirement, disability, Supplemental Security Income (SSI), or Special Veterans' Benefits, you can designate a representative payee to manage your benefits in the event you become unable to do so. 

Note that an advance designation is not the same as appointing a power of attorney. If you have already created a durable financial POA and want to designate your Agent as a representative payee for your Social Security benefits, you must do so separately by providing their name and contact information to Social Security directly, either in your initial application for benefits, your account online, or by calling your local office.

The Guardianship Option

Before the legalization of same sex-marriage in 2015, some same-sex couples resorted to the option of guardianship, a legal arrangement in which a court grants a person (called the guardian) the legal right and duty to care for an individual who has become incapacitated (called the ward). 

In re Guardianship of Kowalski (1991) serves as a historical reminder of the hardship and indignities endured by same-sex couples before the federal recognition of same-sex marriage. In 1983, a serious car accident left Sharon Kowalski paralyzed with a severe brain injury. At the time, Sharon shared her home with her partner of four years, Karen Thompson. However, Sharon's parents were not aware of their relationship. Sharon's father was awarded guardianship and terminated Karen's visitation. After a long legal fight, the Court of Appeals for Minnesota reversed and granted Karen guardianship of her partner.

While the trial court has wide discretion in guardianship matters, this discretion is not boundless . . . Sharon has the capacity reliably to express a preference in this case, and she has clearly chosen to return home with Thompson if possible. This choice is further supported by the fact that Thompson and Sharon are a family of affinity, which ought to be accorded respect . . . Thompson's suitability for guardianship was overwhelmingly clear from the testimony of Sharon's doctors and caretakers.

While Kowalski could be dismissed as outdated due to federal recognition of same-sex marriage, it holds relevance for LGBTQ+ OA who are partnered outside of marriage, widowed, or single. In the absence of a durable power of attorney or guardianship, the law still favors an individual's next of kin over their unmarried partner or chosen family. Where no next of kin is available or willing to serve, the State assumes responsibility for older adults in need of care by appointing a public guardian or fiduciary because the chosen family are considered “legal strangers" in spite of the closeness or length of their relationship to the individual.

Outside of the sixteen states which have adopted the Uniform Probate Code, guardianship laws vary state-to-state. Generally, a probate court determines whether a proposed guardianship is in the best interests of the ward, taking the ward's preferences into account whenever possible, as in Kowalski. 

The duties of guardianship cover a wide range of long-term decisions beyond those typically covered by the healthcare directive or durable power of attorney, most notably long-term living arrangements and caregiving. LGBTQ+ OA, regardless of whether they are married or single, have the option to choose a guardian for themselves if they anticipate a period of incapacity at any point in their life, such as after a serious diagnoses like Alzheimer's, Parkinson's, or Multiple Sclerosis.

What If My Wishes Are Not Respected?

Specific laws concerning healthcare directives, durable powers of attorney, and guardianship vary from state to state. You can create your own by downloading forms particular to your state, or contact a qualified attorney for legal advice and services focused on estate planning for LGBTQ+ OA.

II. The Importance of Estate Planning for LGBTQ+ Older Adults

When it comes to estate planning, deep-rooted legal preferences for next of kin (including distant relatives) over unmarried partners and chosen family remains the norm. Your estate plan is your legal voice providing instructions for the future. 

To avoid creating an estate plan is to remain silent on future security for your loved ones. The major consequence of avoiding creating an estate plan is that when you can no longer speak for yourself, others will speak for you, including next of kin who may not honor your choices and relationships.

To ensure that your voice is heard and that your property goes to the person(s) or organization(s) of your choice, create a valid last will and testament. Setting up a trust is another way to ensure that your property will be distributed according to your wishes.

Intestate Succession

If you die without a valid will in place, the law provides that you die intestate, which means your property automatically passes to your next of kin – blood relatives who have an automatic right to inherit according to state law (with some exceptions, generally the state where you lived at the time of your death). 

All of your property, both real and personal, becomes part of your estate after you die. The legal process of dividing your estate is called probate. Each probate court follows specific state intestacy laws to distribute your property to your closest living relatives.

If you are legally married but die without an estate plan, your spouse will only be protected as far as your state's intestacy (and sometimes, community property) laws will allow. That means a portion of your property may pass to relatives who you have had little to no contact with for years and may disapprove of your sexual orientation and/or gender identity.

Regardless of whether you are legally married, consider creating a simple will or a trust to provide some security to your loved ones after your death. Other estate planning tools discussed in this section include joint tenancy with right of survivorship, account beneficiaries, life insurance policy(ies), retirement plan(s), and funeral directives.

Last Will and Testament

Your last will and testament (will) is your central estate planning document in which you designate how your property should be distributed after you die. Your “property" includes all assets you possess at death, including real estate, bank accounts, cash, pets, and personal possessions like clothing, vehicles, books, jewelry, and other collections. 

As the person making the will, you are called the testator. The people or organizations you designate to receive your property are called beneficiaries. You will also name an executor, sometimes called an administrator or personal representative, to manage your estate and distribute its property according to your instructions. Your executor is typically responsible for making your funeral arrangements unless you specify otherwise.

Generally, all of your property that is not in trust becomes part of your estate after you die. The legal process of dividing your estate is called probate. Before your executor can distribute property to your beneficiaries, they must first settle your debts and pay probate fees and estate taxes. Consult an attorney or create your own last will and testament with these state-specific forms.

Changing and Revoking Your Will

Be sure to keep your will up to date, particularly after any major life changes, like marriage, divorce, starting/ending a relationship, moving to another state, the birth of a child or grandchild, or a shift in financial circumstances.

Codicils

If you want only small change(s) to your will, one way to adjust it is to amend it with a document called a codicil. A codicil is a separate legal document comprising changes to your existing will. You can create a codicil to add a new provision, revoke (remove) a provision, or both. Just like your existing will, your codicil must be dated, signed, witnessed, and in some states, notarized — in order for it to be valid.

Revocation

The surest way to change your current will is to revoke it and make a brand new will. Revoking an existing will is a relatively straightforward process — just include a statement in your new will declaring that you revoke all earlier wills and codicils. You should destroy all previous wills (as well as copies) to avoid challenges and conflict between your beneficiaries.

Get Professional Legal Help Revoking Your Will

An incorrect revocation or modification of your will could lead to disastrous consequences, resulting in confusion about your intentions, conflict between chosen family and next of kin, and even litigation that unfolds for years after your death. A licensed attorney can best advise you on the proper ways to change or revoke your will and make sure your intentions are clear. Contact a local wills attorney who can confidently guide you with your estate planning questions.

Trusts

A trust is an estate planning tool in which you can place your property and assets out of reach of the probate process as well as minimize the estate tax burden on your beneficiaries. Your trust may serve as a total replacement for a traditional will; it may also be created through your will (called a testamentary trust). You can also create what's called a living trust (also known as inter vivos trust) that you manage while you are living.

There are many different types of trusts, even ones exclusively for pets. Many people consider their pets to be part of the family. Setting up a pet trust will allocate specific finances to support your pet(s) and their needs after you can no longer do so.

The person creating the trust (you) is called the grantor (also called trustor or settlor). As grantor, you will designate a person to be the trustee, who will manage the trust and distribute the property within it. The person or organization receiving property through the trust is called the beneficiary. Depending on the type of trust you choose, those roles may overlap.

Property held in trust will avoid the probate process so your assets will be distributed immediately. If you want to lower the burden of estate taxes on your partner and/or chosen family beneficiaries, it is well worth reaching out to an attorney to discuss creating a trust.

Revocable vs. Irrevocable Trusts

A revocable living trust is a trust created during your lifetime (inter vivos). As the grantor, you could also act as a trustee to either modify or revoke the trust in its entirely whenever you choose.

An irrevocable trust can be created either during your lifetime or after your death (testamentary). In both scenarios, once your property is deposited into an irrevocable trust, the property remains in the trust and cannot be removed by the grantor (you). You would not act as the trustee in this scenario, but choose a third party, like an attorney, financial professional, or organization to manage the trust.

Qualified Income Trust

Part of a comprehensive estate plan includes making provisions for how your long-term care will be paid for. A qualified income trust (QIT) is one way to ensure that your long-term care needs will be covered as your age-related medical needs increase, provides an alternative to purchasing a private long-term care insurance plan (PLIT) with a costly premium, and ensures you maintain your quality of life.

Many people do not realize that Medicare A, B, and C plans do not cover long-term care costs. In the absence of a QIT or PLIT, many older adults rely solely on Medicaid to cover their long-term care needs. Since Medicaid is an income-based program, people are required to “spend down" their assets (not in trust) to qualify for coverage, leading to impoverishment and lower quality of life.

QITs go by many names, depending on the state you live in (e.g., Miller Trusts, Income Trusts, db4 Trusts). Essentially, a QIT is an irrevocable trust that holds the income of a Medicaid applicant. If you deposit your monthly income (e.g, retirement, pension, dividends) into a QIT, then income exceeding Medicaid's strict limit is not counted towards your eligibility, making it possible to qualify for Medicaid to cover your long-term care expenses.

Joint Tenancy With Right of Survivorship

Joint tenancy takes place when two or more persons “hold title to the same asset," or own a property together, such as a family home. Joint tenancy with right of survivorship is a recorded legal agreement that if one property owner dies, their title passes directly to the surviving property owner(s) by operation of law. The surviving title holder(s) assume equal shares of ownership over the deceased owner's portion of the property. Joint tenancy with right of survivorship is a type of property ownership that will not be affected by your will or trust.

Let's say you own the home that you live in with your unmarried partner Jacob, and your old friend Sam, who is your caregiver along with Jacob. You have been diagnosed with a terminal illness and want to ensure that Jacob and Sam have uninterrupted ownership rights to your home after you pass away. In addition, you want to minimize any potential unpleasant interactions between Jacob, Sam, and certain blood relatives of yours.

You, Jacob, and Sam can work with an attorney to develop a joint tenancy agreement for the home you share. Once the deed, title, and other legally binding property ownership documents are updated, filed, and recorded, the three of you will own equal shares of the property from that day forward. In the event that you pass away from your illness, Jacob and Sam shall automatically assume equal shares of ownership over the portion you leave behind. Your home may also escape the probate process, minimizing the chance of stressful encounters between Jacob, Sam, and your blood relatives.

Bank Account Beneficiaries

One way to keep your bank account(s) out of the probate process is to name one or more beneficiaries on your accounts. Most banks allow customers to designate an account beneficiary as a free service and will provide forms for you to sign. You can name an unmarried partner, chosen family member, friend, or IRS-recognized charity. 

Once you designate your beneficiary, your account converts into a payable on death (POD) account. A POD account allows beneficiaries to quickly claim ownership of your account after your death instead of waiting for probate, which sometimes take months or years to complete. 

Check with an attorney to find out if your state law requires a brief waiting period for beneficiaries to access your POD account and whether your creditors (if any) will be given priority to access the funds before your beneficiaries do.

Life Insurance

A life insurance policy allows you to pay a monthly premium in exchange for a lump sum payout to a designated beneficiary when you die. Remember that your life insurance payout will always go to the beneficiary (or beneficiaries) named in the life insurance policy itself, even if the policy document differs from the instructions in your will.

Before purchasing life insurance, check which types of beneficiaries the policy allows. Most policies use revocable beneficiaries. That means that you, the policyholder, can change your beneficiaries or cancel the policy entirely at any time. The ability to update your beneficiaries is particularly important when life circumstances change, like after a separation, divorce, or birth of a child or grandchild.

The rules for life insurance policies with irrevocable beneficiaries are much stricter when it comes to change-of-life circumstances. When someone is listed as your irrevocable beneficiary, you cannot remove them from the policy without their written consent. Additionally, any contingent or secondary beneficiaries listed must also agree to the change. By default, an irrevocable beneficiary is guaranteed to receive your life insurance proceeds unless they agree to be removed. Think carefully before adding an irrevocable beneficiary to your life insurance policy.

Lastly, life insurance proceeds are not taxed because they are not regarded as income. However, even though your beneficiaries will not pay income tax directly, the proceeds will be added to the taxable value of your estate, which may affect how the remainder of your property is distributed. There are ways to avoid this outcome, such as creating an irrevocable life insurance trust. Property distributed through a trust is not subject to estate taxes.

Retirement Accounts

Most retirement accounts allow you to name one or more beneficiaries, including unmarried partners and chosen family members, to receive your retirement funds if you pass away. As with life insurance policies, the beneficiaries listed in your retirement account(s) will always have priority over the beneficiaries named in your will. Whether you have a qualified (employer-created, tax-deferred) plan like a 401(k) or an individual retirement account (IRA) (also tax-deferred), make sure the named beneficiaries on those accounts match the instructions in your will to avoid unnecessary conflict.

Unlike insurance policy beneficiaries, all non-spouse beneficiaries listed in your 401(k), IRA, or other tax-deferred retirement plan must count the proceeds they receive as part of their taxable income. With that in mind, ask whether it makes sense to list an unmarried partner or chosen family member as your retirement account beneficiary.

The law requires non-spouses who inherit qualified retirement accounts to take distributions equal to the entire account value within ten years, which, from an income tax perspective, may not make financial sense for your loved ones. 

On the other hand, if you choose your spouse as the beneficiary of your qualified or tax-deferred retirement plan, they may be able to “roll" their new retirement plan “inheritance" into their own existing retirement account, deferring all taxes until they are ready to use the funds themselves.

If you are unsure of the best way forward, seek advice from an attorney or financial adviser.

Funeral Directives

A funeral directive is a written instruction stating your preferences for end-of-life and funeral arrangements, including:

• Organ donation preference
• How to dispose of your body (burial, embalming, cremation)
• If buried or embalmed, where your remains will be interred (in-ground, above-ground, mausoleum, natural burial)
• If cremated, where your ashes will be stored or spread
• Who will be in charge of funeral/memorial arrangements
• Memorial service type and location
• Who will be directly informed of your death and invited to your funeral/memorial
• How your obituary is written (e.g., acknowledges chosen family; gender affirming language)
• Language on your grave marker (e.g., tombstone, monument, or plaque)
• How arrangements will be paid for (e.g., life insurance policy, bank account)

Keep in mind that your funeral directive may not be enforced unless it is incorporated within a valid legal document. Depending on the laws of your state, you can include end-of-life instructions in your health care directive or your health care proxy. Because your last will and testament might not be read until weeks following your death, it may not be an ideal document to incorporate your funeral directive.

If you are legally married at the time of your death, then your spouse will stand ahead of your next of kin. If you are unmarried at death, then in absence of a legally binding document, the law favors next of kin to make end-of-life decisions and funeral arrangements. This will typically be your closest blood relative according to your state's laws of intestate succession.  This might be someone you have not been in contact with for years, who may disapprove of your sexual orientation and/or gender identity and thus disregard any romantic partners or chosen family in their decision-making.

Get Legal Help Creating a Comprehensive Estate Plan

​One of the most thoughtful things you can do for your loved ones is to create a comprehensive estate plan. But, making sure that your legal documents are valid can be a confusing process.

An estate planning attorney can explain your available options. So, whether you need to create a will or set up a qualified income trust, it's best to contact a local estate planning attorney for assistance.