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Thursday, February 16, 2017

A Tale of Two Couples

Written by  Lee Carpenter

Lessons in estate planning

Roberto and Ian didn’t leave anything to chance. They ordered their movie tickets online in case the show sold out before they got to the theater. They always bought trip insurance, on the off chance their travel plans didn’t pan out. They flossed daily, replaced smoke-detector batteries annually, and changed their furnace filters every six months.

Their friends George and Julian often teased them about being so conscientious. But then George and Julian took a different approach to life. When George got a flat tire and needed to use the spare, it was flat, too. The couple once ran out of heating oil because Julian forgot to order more. And they still laugh about the time they missed their cruise ship after enjoying one too many rum swizzles at a pub in Bermuda.

These differences extended to the way they approached estate planning, too.

Roberto and Ian went to an estates and trusts attorney who was a member of the LGBT community. After getting to know them, the attorney prepared wills that left everything to the survivor in case Robert or Ian died. He also drafted a power of attorney and advance healthcare directive for each of them. These documents would be essential, the lawyer explained, if Roberto or Ian became incompetent and needed the other partner to manage his finances or health care.

Roberto and Ian knew these documents were important and were glad to have them prepared by a professional. What they didn’t know was that there was more to estate planning than that.

The lawyer included language in their documents to cover their digital assets – things like frequent-flyer miles, social media accounts, and online shopping. The lawyer urged them to make an inventory of these assets, including their user names and passwords, so the other spouse could access them if necessary. The inventory even included passwords for things like their laptops, smart phones, and iPads. The were also told to make sure the beneficiaries on their life insurance and retirement accounts were up to date.

Once the documents had been signed, Roberto and Ian slept better. They knew they were ready for whatever lay ahead.

George and Julian, by contrast, did none of these things. They had been meaning to get wills but thought the process would be difficult and expensive. They also didn’t want to think about the worst-case scenarios an estate plan was meant to cover.

Then the unexpected happened. George’s car slid off an icy road and into tree. His death was instant, and Julian was suddenly faced with the very scenario he had been so reluctant to confront.

Because he had no will, George’s estate passed through “intestacy.” This meant that as the surviving spouse, Julian inherited only about half of George’s assets, and surprisingly, the rest went to George’s mother.

George had failed to name a beneficiary on his retirement account, and because he and Julian were married less than a year, it went to George’s estate. This meant that Julian also had to split this substantial asset with his mother-in-law. George had life insurance through his job, but he set it up before he and Julian met. The beneficiary was George’s ex-boyfriend, so Julian got nothing.

To add insult to injury, Julian had no way to access George’s laptop or iPad, which were both password-protected, or to listen to the messages that friends had left on George’s phone when they heard about the accident.

It has been said that hindsight is always 20/20. If George and Julian could start over, what would they do differently? They still might have stayed for that extra rum swizzle at the pub in Bermuda. But they would definitely have called their friends’ lawyer and had him prepare an estate plan, rather than leave anything to chance.

Lee Carpenter

Lee Carpenter

Maryland LGBT Estate Planning | Semmes Attorneys at LawLee Carpenter is an associate attorney at the law firm of Semmes, Bowen & Semmes. Contact Lee at (410) 576-4729 or lcarpenter@semmes.com, and discover more lesbian, gay, bisexual & transgender Estate Planning at mdlgbtestateplanning.com. This article is intended to provide general information about legal topics and should not be construed as legal advice.

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