By Darla Shelden
Estate planning is one of the most important steps any person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for after their passing. It is important for all couples to have an estate plan, but it is essential for same-sex couples.
Local attorneys Tracy Pierce Nester and Sally Gilbert have turned special attention to estate planning for same sex couples.
“I think there’s a growing recognition in the lesbian and gay community that unless they do something, their estates will certainly not go to their partner,” said Gilbert.
Estate planning can involve asset-distribution, tax planning, family issues and planning for medical emergencies and incapacitation. An estate consists of all property owned by a person at the time of their death, which includes real estate, bank accounts, stocks, life insurance policies and personal property such as automobiles, jewelry, and artwork.
After spending over 23 years practicing law, including four years as staff counsel with Kemper Insurance Companies, third-generation Oklahoma trial lawyer Tracy Pierce Nester opened her own firm in 2008.
Her colleague and friend, Sally Gilbert has practiced law locally for 31 years, doing insurance defense litigation, plaintiffs’ personal injury work, commercial, probate, family law and other general practice work. Nester and Gilbert’s law practice is located in Edmond, OK.
“Tracy and I have worked on and off together during our 20 year friendship,” said Gilbert. “Two years ago, Tracy was approached by a female couple to do some estate planning, and I was independently approached by a couple of guys in my neighborhood about these issues. We were having lunch one day when we mutually recognized that need and wanted to provide those services.”
The lesbian couple, who had been together 22 years, explained to Nester how two years ago they had consulted an attorney regarding an estate plan and was stunned when he did not seem to be wiling to help them. It wasn’t because he was disapproving of their relationship, Nester said, but because he didn’t know where to start and saw potential for ethical conflicts.
“The couple then approached me and that got my wheels spinning,” said Nester. “This is something that I feel strongly about. “I started investigating and found that it’s a real need in our community.”
These two women were the first clients that Sally and Tracy have been able to help with their estate planning. “We prepared a joint trust agreement for them,” said Nester. “Although a lot of practitioners might want to prepare separate trusts for each individual, we took the opposite approach with this couple.”
According to the U.S. Census Bureau, in 2011 there were 131,729 same-sex, married couple households and 514,735, same-sex, unmarried partner households in the United States.
“When you have an unmarried couple, whether they’re same sex or straight, there could be tax implications and legal ethical issues to be dealt with,” said Nester. “A lot of lawyers might conclude that it’s just better to keep everything separate. There was no need in our client’s situation to prepare separate trust agreements.”
The majority of states don’t recognize same-sex marriages or domestic partnerships, and even those that do may not provide for automatic inheritance to domestic partners.
“We’ve designed some legal tools to get around that situation,” said Nester. “Sally and I feel very passionate about it.”
Much like a prenuptial agreement, Nester and Gilbert are able to prepare property agreements that provide for what happens to that property upon the possible relationship dissolution.
‘We met with this couple and the documents were prepared over the course of about six weeks,” said Gilbert. “It takes a while to get all the documentation together, so it is a process.”
The extent of time needed to develop an estate plan can vary based on the couples situation, complexity and extent of their assets.
“There’s very little or no recognition of same sex couples in most states and there are a handful of states so far that have some form of legal status that they recognize. Oklahoma does not. That’s a big part of what we do with estate planning and also life planning with powers of attorney and health care powers of attorney,” said Gilbert.
Oklahoma is one of 30 states that has a constitutional amendment banning same-sex marriage, according to an Alliance Defense Fund website that advocates for a ban on same-sex marriages.
After President Obama’s recent endorsement of same-sex marriage, Oklahoma Governor Mary Fallin’s office issued this statement, “Governor Fallin believes that marriage is between a man and a woman.”
Federal law does not recognize same-sex marriages, regardless of state law, so even married same sex partners will not receive equal federal income and estate tax treatment as traditional married couples.
“We’re doing focus groups and we want to get a feel for what the needs are and who the people are that need services,” said Gilbert. “We did a power point on estate planning in general and we’re answering questions. It’s a lot about education.”
While heterosexual married couples are granted exclusive rights and responsibilities when a spouse dies or suddenly loses the capacity to make decisions or manage one’s care, same sex couples are not granted such rights.
“Common law marriage is kind of in a state of flux right now,” said Gilbert. “There are some statutes that suggest they are not still recognized in Oklahoma, but there is case law that clearly recognizes common law marriage. A straight couple can get into divorce court to dissolve that relationship, or if there are children, they have more access to the courts if they can establish a common law marriage, which a same sex couple cannot.”
Nester added, “With estate planning you run into the same problems with common law married couples as you do with same sex couples because of IRS rules, which makes the distinction between a single individual and a spouse. They don’t recognize a domestic partner. If a same sex couple formulates a joint trust, then that is a legal entity in and of itself.”
“Sometimes it’s not the same person that is named power of attorney,” said Gilbert. “We recommend separate documents: one for finances and one for healthcare,” You want to appoint someone that has the same outlook as you do towards healthcare.”
“As part of our estate planning we help same sex couples indentify what their current situation is and hopefully get that resolved with paperwork, so they are prepared in the event of an accident, illness or injury,” said Nester. “If they have that in place it allows their partner to talk to their doctor, view their medical records; and make important decisions for them.
“It is important for all couples to have an estate plan, but members of the GLBT community must take special precautions to ensure they are not left out when their partners need them the most.
“More states are passing laws recognizing marriages, but same sex couples in Oklahoma need to know, and hopefully they do, that even if they have a legal marriage in another state it won’t be recognized in Oklahoma,” said Nester.
Gilbert and Nester feel the ideal situation would be to have a trust, avoiding court probate proceedings, which can be costly, time consuming and is a public process. Nester said, “By preparing a trust, your assets will pass without having to seek court approval.”
“The most important thing that we recommend, is to do something,” said Nester. “Something is better than nothing, because in Oklahoma, if you die without any will, trust or estate plan, the legislature has already decided where all your assets will go. It’s a complicated formula that they follow; the spouse is included, with the children, parents, and siblings. A domestic partner is left out.”
Nester and Gilbert are available to make estate planning presentations free of charge, to small groups or to community organizations. For information, call 405-285-5304.