DEATH AND LIVING TOGETHER CONTRACTS



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     Not many people look forward to the day when they will die.  In fact, planning for it seems to arouse a superstition in some that it will hasten the event.  But the truth is, it’s crucial for lesbians and gay men to plan what they want to happen to their property after they die, especially if they are in a committed relationship.  This is called estate planning.   

     If you die without a will, a living trust, or other legal means of disposing of your property, it will be distributed under the intestacy laws of your state.  (To die “intestate” means to die without a valid will.)  This means your property will pass according to the laws of inheritance to certain specified relatives, namely a spouse, children, parents, and siblings.  The only exceptions to this are in states with laws that recognize lesbian and gay relationships (such as Massachusetts, California, Vermont, and Hawaii when the couple has entered into a legal relationship). 

Living Together Contracts Are Not a Will

      Some couples think that if they have a living together contract (also known as a domestic partnership agreement), they’ve done enough to protect their partner’s rights.  But it’s not true.  The living together contract defines who owns what property while both partners are living, and applies equally to same-sex and opposite sex couples.  But it is no substitute for legal documents that determine what happens to a person’s property after they die.  For this, you need a will or a living trust.  The living trust can even ensure that your estate will not go to probate court at all, saving thousands of dollars in legal costs and fees. 

     It is easy to do basic estate planning, and foolish not to do at least the minimum—preparing a will.  How tragic it is when a lesbian or gay man loses their partner of many years, only to be told by the family upon their lover’s death that they not only have no right to any of the property they’ve shared, but they cannot even have a say in burial preparations or how the body is disposed of.  This is a time for grieving, not a time when you want to be fighting legal battles with hostile relatives. 

     Another important reason to make sure you are in charge of planning your estate is children.  If you and your lover are raising a child together but you are the only legal parent, estate planning allows you to nominate your lover as the guardian for your child.  You also have the power to decide who will be in charge of supervising the distribution of your property, by naming them as your executor, personal representative, or the trustee to the living trust. 

     Wills are covered in another article.  They are the most basic of all estate planning documents, and something you can probably do on your own.  But distributing your property through a will has many drawbacks.  First, it forces your executor or personal representative to file the will in probate court.  This requires preparing and filing an inventory, identification of all your assets, payment of all your debts, and notice to all “interested parties” (i.e., relatives who may be entitled to receive or inherit your property).  It is usually expensive and time-consuming, and there is a statutory waiting period. 

     Simply by planning ahead you can eliminate or at least minimize the need for probate, and sometimes lower estate taxes.  If you have a small amount of property, a will may be enough.  But if you have a larger or more complicated estate, a living trust is definitely recommended

Why a Living Together Contract is Not Enough

      Most states will enforce a valid living together contract.  A living together contract is good for establishing who owns what.  But if you have a contract stating that you are the half-owner of certain property, your partner has no power to dispose of your share during your life and certainly not after your death.   Even if the living together contract provides that the survivor inherits the deceased partner’s property, you cannot rely on this as a valid means for transferring property at death.  The contract is valid only so long as both parties are still living. 

     A living together contract can be helpful in proving what you and your partner informally agreed as to property ownership, after their death.  However, it is not legally binding.  If your partner dies without a will or trust, you would surely have an uphill battle trying to convince a court that you had any ownership interest in property held in your partner’s name.  Even if you could convince a judge or jury, it would be a costly and difficult process.  You would have to prove there was an oral contract about the property, that you had contributed in some way to its purchase or creation, and so forth.  How much easier it is to avoid all of this simply by preparing both a living together contract and a will or living trust.  The old saying surely applies here:  An ounce of prevention is worth a pound of cure.    

Copyright © 2005 Mindy L. Hitchcock   All Rights Reserved.   

 

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