Legal-Ease: Advising non-traditional couples
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Last evening, I was griping about having to come to work today. A friend responded, "As interesting and varied as your work is, I'd think you'd look forward to going to work."
Well, really I guess I do. I'm fortunate to be a member of a profession which allows me to make a decent living and feel good about what I do. One of the fascinating things about "lawyering," particularly the kind of elder lawyering I do, is working with all sorts of people and helping them make legal arrangements for their situations, even when their situations are not typical of most.
Nontraditional couples present that sort of a challenge. Most of our laws are built around the concept that a family consists of a legally married heterosexual couple, their children, grandchildren, parents, siblings, and other blood-related relatives.
Almost nothing in the law is geared to couples who do not fit that traditional profile. Yet, more folks than you might think are in non-traditional relationships such as (a) unmarried heterosexual couples of any age, and, (b) same-sex couples.
The number of older unmarried heterosexual couples living in "delicious sin" is growing steadily. Maybe the "free love" attitude of the Sixties has taken hold among seniors. More likely, economics and existing family feelings are controlling what people do.
Many people in their retirement years, especially if they have been widowed, decide not to marry because they may lose pension or Social Security benefits tied to their late spouse, or they may want to avoid disapproval from their children, or they may be afraid of losing much of their life savings if their new spouse needs nursing home care.
Whatever the reason, there are a lot more older people shacking up than there used to be. And, they want to make sure that their affairs are in order.
There also are a lot more same-sex couples living openly together than there used to be. I'm not sure if there are more couples, or just more couples willing to identify themselves as such in order to put their affairs in order.
It is not unusual for such couples to live in a hostile world. Their kids may not approve of their relationship, their families may have religious or societal based objections to their relationship, their partner, or to their being in a same-sex relationship. They must deal with the reality of these hostilities.
Here are some common planning issues these couples face and some of the ways they deal with them.
Life-time planning. Most folks want to stay in control of their own financial, property, and business affairs as long as they can, first by looking after those matters for themselves and then by relying on their designated helper to look after them. These folks will want to be sure that they sign a
Durable Power of Attorney and a Medical Power of Attorney. Many times each person of a couple has his or her own assets. Often he doesn't want to combine his assets with his partner's assets. Yet, if he were to become unable to manage the assets, he would want his partner, not his blood relatives, to look after those things for him. If he wants his partner to be his designated-helper to look after matters affecting his property, finances, and daily business affairs, he can sign a Durable Power of Attorney in which he names his partner as his primary helper, thereby giving him or her authority to step forward and help when needed. If he is concerned about who will direct his medical care if he is too sick to do so himself, he may sign a Medical Power of Attorney, in which he says that if he is too sick to direct his own medical care, then his partner, not his kids or siblings, should be the No. 1 person to be his Medical Representative.
In both of these documents he can specify that if a court ever is asked to appoint a guardian or conservator to look after him or his stuff, he wants the court to appoint the person he has picked as his helper, blocking an end-run by other family members to try to gain control through a court.
A couple might decide to create a container called a trust to own their assets, providing that the purpose of the trust is to use those assets for the couple's benefit while both are living, and then to continue using the assets for the benefit of the surviving partner, and then, following the death of the last partner to die, directing where any remaining trust assets are to go.
Planning for Death. Non-traditional couples face unique estate planning issues, too. Neither will inherit anything from the other unless they plan for it to happen. Non-traditional couples are not included in the state laws which govern inheritance. They will want to make sure that the surviving partner actually gets what he or she is supposed to, even against the wishes of disapproving relatives of the deceased partner. They also may want to provide for the surviving partner while making sure that after the surviving partner's death, any remaining assets will go back to the family of the first-deceased partner.
They can set up plans like these in their Wills or by setting up trusts.
If one partner wants his partner to become the owner of his bank accounts and investments following his death, he may want to set up those accounts and investments as "Pay on Death" or "joint and survivorship." In a Pay on Death arrangement, the assets remain entirely owned by the original partner until his death; then, almost automatically, the assets become owned by the designated living partner.
In Joint and Survivorship arrangements, the assets become owned by both partners as soon as the ownership is set up, with the understanding that when one partner dies, the surviving partner becomes the sole owner of the asset. They will want to think through who should receive any death benefits which insurance will pay.
Planning for non-traditional couples involves lots of interesting and challenging opportunities to custom design plans to get their affairs in order. Such folks should not be hesitant to seek competent help just because their circumstances are unconventional.
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Gerald W. Townsend is a partner in the law firm of Fluharty & Townsend, Parkersburg, West Virginia, with special emphasis upon Medicaid planning to protect assets from nursing home costs. He can be reached at jtownsend@fntlawoffices.com.