Tag: couple

How Can Estate Plans Help Same-Sex Couples?

Posted May 21, 2022 by Law Office of Andrew Szocka

Estate plans can greatly help same-sex couples manage their financial and medical affairs, as well as protect each other even after death. While same-sex married couples have many of the same estate planning advantages as opposite-sex married couples, people who are unmarried should take special care to plan ahead.

Managing Financial and Medical Affairs with an Estate Plan

An unmarried person may have trouble handling his or her partner’s affairs if the partner becomes very ill or mentally incapacitated. The same is true for married couples who do not share the same last name. Medical and financial institutions are more likely to ask for proof of marriage or simply block you from making decisions on your partner’s behalf. As a result, you might be kept out of the hospital room at a key time or be unable to pay the bills.

Estate planning can help with these problems. Both unmarried and married couples may sign powers of attorney in each other’s favor that have been prepared by an estate planning lawyer. A power of attorney gives a chosen person authority to make decisions for the creator. It can go into effect when the creator becomes incapacitated from making decisions or at any other time. Powers of attorney may be medical or financial, and many people choose to sign special advance directives that address a variety of medical and end-of-life questions.

Protecting Each Other During Life and After Death with an Estate Plan

Another significant concern for same-sex couples is protecting each other financially in the event of life changes or even the death of one partner. Without an estate plan in place, a married spouse will most likely inherit part of the estate from the other spouse. But unmarried partners who have not made wills have no entitlement to part of each other’s estates. Instead, the money or property would be divided up among close family members such as children and parents.

To gain more peace of mind that your wishes for your partner or spouse will be carried out, you need to make a will. This legal document explains how and to whom an executor should distribute your money and property after you have passed away. You can consult an estate planning lawyer to help you prepare your will and get it properly executed.

In addition, you can protect your partner or spouse through other estate planning structures. You might consider leaving resources to them through a trust, life insurance, retirement accounts, or lifetime gifts. To put these structures in place, you need to take a few steps such as filling out beneficiary designations and checking on tax consequences. Speak to an estate planning lawyer to learn more.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

How Does the Marital Deduction Affect Couples’ Estate Planning?

Posted May 19, 2022 by Law Office of Andrew Szocka

When married couples start estate planning, they may not realize the advantages of the marital deduction. This special tax deduction available only to married couples can help save money on taxes, but some additional estate planning might be necessary.

What Is the Marital Deduction?

The marital deduction is a tax deduction permitted by the IRS that allows spouses to make unlimited tax-free transfers to each other during their lifetimes or upon the death of one spouse. In other words, one member of a married couple will not have to pay gift taxes at the time if he or she transfers property or money to a spouse. Further, a surviving spouse can receive an inheritance from a deceased spouse without losing a chunk of the money to estate taxes.

The deduction only forestalls taxes until the death of the surviving spouse. At that point, the surviving spouse’s estate may owe estate taxes if the value of all the spouse’s assets exceeds a certain amount (currently in the tens of millions of dollars). Also, if the surviving spouse remarries at some point, then the surviving spouse may be able to give the property or money received from the deceased spouse to the new spouse.

Estate Planning to Take Advantage of the Marital Deduction

To make the most of the marital deduction, couples can do some estate planning that minimizes the surviving spouse’s exposure to estate tax liability. Which estate structures to put in place depends on the couple’s amount of assets. For example, you might need to move assets into a trust so that the surviving spouse’s estate can take advantage of the estate tax exemption (the maximum amount in the estate before owing taxes). Different kinds of trusts can provide support for the surviving spouse while removing assets from his or her taxable estate.

Keep in mind that non-citizen spouses are not eligible for the marital deduction. In fact, non-citizens often only receive lower estate tax exemptions too, so potential tax liability is huge. Fortunately, some careful estate planning can help, such as setting up a qualified domestic trust (QDOT). If you have questions about the marital deduction or the taxes that may apply to you, talk to a local estate planning lawyer.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.