Establishing and then maintaining estate plans that offset these
disadvantages take time and effort. "It’s just a nightmare of paperwork and
confusion," says Robert Westover, a public affairs executive who lives in
Washington, D.C., of his efforts to amend a living trust he set up in 2001 when
he was a resident of California. Westover and his partner, Tom Felton, want to
incorporate a home they bought in Washington into their trusts. They also want to increase Westover’s ownership in a
vacation home they own in Hawaii valued at more than $1 million. Under their
current trust documents, Westover owns 25 percent of the house and Felton owns
the rest. "Straight people can know each other for two hours, get married in Las Vegas and everything gets conveyed automatically." |
While making such changes across state lines would be
relatively simple and straightforward for a heterosexual married couple, for
Westover and Felton it will require onerous documentation and additional
attorney fees, Westover says. To avoid the hassle of arranging for their lawyer
in California to rewrite the trust agreements, and then having those agreements
signed at a prearranged time in front of two witnesses in Washington, the couple
is considering having trust agreements drawn up with a lawyer in Washington.
"It drives you crazy," Westover says. "Straight people can know
each other for two hours, get married in Las Vegas and everything gets conveyed
automatically." In the meantime, Westover is well aware of the precariousness of
his situation. If Felton died, his family could swoop in and claim his share of
the vacation home. "Now, I don’t think they would do that to me. But it is
disconcerting." Defensive Posture
There are some basic steps gay couples can take to mitigate
these risks. The first is to craft wills with particular care so they can
survive challenges from relatives who would otherwise benefit from an estate.
"What I find with gay couples is that when one of the partners dies, all these
family members who they didn’t even know objected to their lifestyle suddenly
come out of the woodwork and contest the will," says Elaine Kiernan, president
of Financial Resource Associates, a financial advisory firm in Santa Cruz,
Calif. "These couples really have to plan their lives, and their
post-lives," says Milstein. "Too many times, I’m involved in litigation where
one partner dies, and mom and dad suddenly walk into the house and say to the
surviving partner, ‘Wait a minute . . . the house is not in your name. You were
just a friend. Now, get out.’ " To avoid litigation, Kiernan advises her clients involved in
same-sex relationships to keep a videotape of each other reading their wills–a
practice that all couples should consider. "It’s a wonderful tool," she says.
"When the will is videotaped, it doesn’t have a chance of going to court." Gay
couples should also have airtight living wills, health care directives and
durable powers of attorney. Estate planning becomes even more complicated when gay couples share
ownership of real estate assets. First, there is the matter of titling. In most
states, the default status for jointly owned homes is "joint tenants in common." But that designation opens the door for
relatives to step in and claim ownership of the property. Titling the property
under the designation "joint tenants with rights of survivorship" will guarantee
transfer of ownership to the surviving partner. However, a joint tenants with
rights of survivorship title cannot be used if a couple does not share equal
interests in the home.
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