It was quite a week for the LGBTQ community. No, we aren’t talking about Dolly Parton’s support for her gay fans. (Nice touch, Dolly.) Nor are we talking about the meeting Facebook had with the transgender community over the social media giant’s policy against using aliases on their site. (This article even has a visual: http://www.npr.org/blogs/alltechconsidered/2014/10/01/353053455/facebook-apologizes-for-name-policy-that-affected-lgbt-community) In case you were wondering how that meeting turned out, Facebook issued an apology but tellingly didn’t change its policy; they plan to change the way it’s enforced. Whatever that means. No, this week, the spotlight belonged squarely on Apple CEO Tim Cook (i.e. NOT Steve Jobs version 2.0).
It all began early in the week when Mr. Cook was inducted into the Alabama Academy of Honor for presumably being a famous Alabaman. (Read about it here: http://www.nytimes.com/2014/10/28/technology/apples-tim-cook-calls-on-alabama-to-protect-gay-rights.html.) During his speech he chided his home state for being too slow on the issue of LGBTQ rights. In Alabama, a person can legally be fired for their sexual orientation. Our advice – don’t hold your breath, Tim.
Then on Thursday, Mr. Cook declared that he is proud to be gay in an article penned for BusinessWeek (http://buswk.co/1yJeXGS via @BW). He talks about how he considers himself more empathetic as well as tougher as a result of his sexual orientation and points to the continuing problems the LGBT community faces in medical situations with loved ones, in the workplace and even on the playground.
So between Dolly, Tim and Facebook (and Rupaul – did you miss our mention on RuPaul’s podcast? Check it out here: https://soundcloud.com/rupaul/episode-15-bareback-betty#t=17:59), we focus this week on the needs of the LGBTQ community. Gay marriage is now legal in an increasing number of states and awareness surrounding LGBTQ rights is becoming more main stream in much of the country. But with the increased focus on gay rights and Tim Cook’s pride comes increased responsibility. Many LGBTQ couples remain unmarried and thus estate planning becomes increasingly important. Individuals who have no immediate close family, are not married to their partners or who have complex distribution plans for their estate need a comprehensive estate plan. The LGBTQ community is no exception.
The most basic document that every estate plan should have is a will. A will tells the court how your property should be distributed. If you don’t have a will (or a trust of some kind), the court will distribute your estate to your legal spouse and/or your relatives. If you don’t have a spouse or if you don’t have a good relationship with your parents/siblings/aunts and uncles/etc., you need to create a will. But having a will is a only a first step.
If your estate in total is worth more than $150,000 in California, your beneficiaries will likely be required to probate your estate. Probate is a process whereby your entire estate is inventoried and appraised by the court, your creditors can file claims against your estate, the court decides who gets what, and finally after 18 to 24 long months, your beneficiaries get what’s left of your estate after paying debts, court fees and attorney costs. Sound fun? You’re right, it’s not.
Probate can easily be avoided by placing your significant assets (home, investment accounts and even life insurance if needed) into a revocable trust (also called a living trust.) A revocable trust is funded by transferring the title of your assets into the name of the trust. You can still sell the assets or add more assets to your trust as long as you are living. After you are gone, the trust becomes irrevocable (no more stuff can be added into it) and the trust dictates how assets are to be distributed. No probate is required. The courts stay out of it and your beneficiaries get you intended them to get much more efficiently and quickly.
A complete estate plan should include an Advance Health Care Directive and a Durable Power of Attorney for financial matters. These two documents let your agent take decisions for you when you are incapacitated as well as provide guidance to medical personnel in case of medical emergencies as to the level of extraordinary care you may or may not want. Hospitals and banks are very familiar with powers of attorney documents.
Ultimately, we believe almost everyone should have an estate plan. But with the rapidly changing landscape of LGBTQ legal rights, we strongly encourage our LGBTQ friends to discuss their estate plans with their loved ones and get their documents in order. (This article will help convince you: http://www.fool.com/investing/general/2014/10/16/30-states-and-counting-same-sex-married-couples-ar.aspx.) Go ahead and call your estate planning attorney today. Tim would be proud.