Since the landmark 2015 Supreme Court decision in Obergefell v. Hodges legalized same-sex marriage nationwide, and with the recent passage of the Respect for Marriage Act in December 2022, married same-sex couples now enjoy federal recognition and protection of their marriages. However, despite these legal victories, estate planning for same-sex couples still requires careful attention to unique considerations that different-sex married couples may not face.
As we move through 2025, it’s crucial for same-sex couples—both married and unmarried—to understand the nuances of estate planning and take proactive steps to protect their assets, their partners, and their legacies.
The Legal Landscape in 2025
The Respect for Marriage Act: A Game-Changer
The Respect for Marriage Act, signed into law on December 13, 2022, formally repealed the discriminatory Defense of Marriage Act (DOMA) and provides critical protections for same-sex couples. This federal legislation requires all states and the federal government to recognize same-sex marriages that were legally performed in any state.
Key protections include:
- Federal recognition of same-sex marriages regardless of current state of residence
- Access to federal benefits including Social Security survivor benefits
- Full federal estate tax marital deductions
- Unlimited gift tax marital deductions between spouses
Why Estate Planning Still Requires Extra Attention
While same-sex married couples now have the same legal rights as different-sex married couples under federal law, several factors make comprehensive estate planning particularly important:
1. Historical discrimination: Many same-sex couples accumulated assets and made arrangements before marriage was legal, creating complex ownership structures that need updating.
2. Family dynamics: Same-sex couples may face unique family challenges, including potential disputes with biological families who may not support their relationship.
3. Non-traditional family structures: Many LGBTQ+ couples have children from previous relationships, use assisted reproductive technology, or have chosen family members who should be included in estate plans.
4. Political uncertainty: Despite federal protections, ongoing political debates and potential future challenges to marriage equality make explicit documentation critical.
Critical Estate Planning Considerations
1. Update Property Ownership Structures
Many same-sex couples acquired property before they could legally marry. It’s essential to review and update how assets are titled:
Real Estate: If you own a home together, ensure the deed reflects both partners as joint owners with rights of survivorship or as tenants by the entirety (where available for married couples). This ensures automatic transfer to the surviving spouse without probate.
Bank Accounts: Convert individual accounts to joint accounts or add beneficiary designations for married couples to ensure seamless access to funds.
Investment Accounts: Update account registrations and beneficiary designations to reflect your current marital status and wishes.
2. Maximize Federal Estate Tax Benefits
For married same-sex couples, the Respect for Marriage Act guarantees access to crucial federal tax benefits:
Unlimited Marital Deduction: All assets left to a surviving same-sex spouse are exempt from federal estate tax, regardless of value. This applies to estates of any size.
Portability: Surviving spouses can inherit any unused portion of their deceased spouse’s estate tax exemption. In 2025, the federal estate tax exemption is substantial (consult current IRS guidelines for exact amounts), and portability allows couples to potentially shield up to twice that amount.
Annual Gift Tax Exclusion: Married couples can make unlimited gifts to each other without gift tax consequences, facilitating wealth transfer and estate equalization strategies.
Important: Unmarried same-sex partners do NOT receive these benefits. Estate taxes could apply to estates exceeding the individual exemption amount, and annual gifts between unmarried partners are limited to the standard annual exclusion ($18,000 per person in 2024, adjusted annually for inflation).
3. Create Comprehensive Estate Planning Documents
While married couples enjoy certain default protections, explicit documentation remains crucial:
Last Will and Testament: Clearly specify who inherits your assets. Don’t rely solely on intestacy laws, especially if you have children from previous relationships or want to include non-biological family members.
Revocable Living Trust: Trusts offer privacy (avoiding public probate), control, and can protect assets for children or provide for a partner while addressing complex family situations. Living trusts are particularly valuable for same-sex couples who want to maintain confidentiality about their relationship and assets.
4. Address Guardianship and Parental Rights
For same-sex couples with children, estate planning must address unique parental considerations:
Legal Adoption: If only one partner is the biological parent, the non-biological parent should complete a second-parent or stepparent adoption where available. This establishes irrefutable legal parentage.
Guardianship Nominations: Clearly designate who should care for minor children if both parents die. Without explicit nominations, biological family members who may not support your relationship could gain custody.
Trusts for Minor Children: Consider establishing trusts to manage assets for children until they reach a specified age, protecting their inheritance and ensuring financial security.
Documentation: Keep copies of birth certificates, adoption papers, and parental rights documentation easily accessible and with your estate planning documents.
5. Plan for Retirement Benefits
Review and update all retirement account beneficiary designations:
401(k)s and IRAs: Federal law now requires recognition of same-sex spouses, ensuring spousal rollover rights and survivor benefits. However, verify that your beneficiary designations are current.
Pension Plans: Same-sex surviving spouses are entitled to pension survivor benefits. Review your pension elections and ensure your spouse is designated as the beneficiary.
Social Security: Married same-sex couples can access spousal and survivor Social Security benefits on the same basis as different-sex married couples.
Important: Beneficiary designations override wills, so keeping these current is essential.
6. Protect Against Family Challenges
Unfortunately, some same-sex couples still face potential challenges from unsupportive family members:
Will Contests: Biological family members may contest wills, especially if they’re estranged from the deceased. Work with an experienced attorney to create a legally sound, challenge-resistant will.
No-Contest Clauses: Consider including no-contest clauses that disinherit anyone who unsuccessfully challenges your will.
Letter of Intent: While not legally binding, a letter explaining your wishes and the reasoning behind your estate plan can provide context and potentially discourage challenges.
Update Regularly: Life changes require estate plan updates. Regular reviews ensure your documents reflect your current wishes and circumstances.
Special Considerations for Unmarried Same-Sex Couples
Despite marriage equality, some same-sex couples choose not to marry or cannot marry for various reasons. Unmarried couples face additional estate planning challenges:
No Automatic Inheritance Rights
Unlike married couples, unmarried partners have NO automatic right to inherit under intestacy laws. Without a will or other estate planning documents, your partner could receive nothing if you die, and biological family members would inherit instead.
Essential steps for unmarried couples:
- Create comprehensive wills leaving assets to each other
- Use beneficiary designations extensively
- Consider joint ownership with rights of survivorship for major assets
- Establish trusts to protect your partner’s inheritance
Limited Gift and Estate Tax Benefits
Unmarried partners cannot take advantage of the unlimited marital deduction or gift tax-free transfers:
Annual Gift Limit: Gifts between unmarried partners count toward the annual gift tax exclusion (currently $18,000 per year as of 2024).
Estate Tax Exposure: The full value of your estate, minus the individual federal exemption, may be subject to estate tax if left to an unmarried partner.
Planning Strategies: Consider life insurance to cover potential estate tax liability, or explore whether marriage would provide beneficial tax treatment.
Action Steps: Building Your Estate Plan
For Married Same-Sex Couples:
1. Review and Update Property Titles: Ensure assets reflect joint ownership or correct beneficiary designations.
2. Update or Create Estate Planning Documents: Even if you have documents from before marriage, update them to reflect your married status and take advantage of spousal benefits.
3. Verify Beneficiary Designations: Review all retirement accounts, life insurance policies, and investment accounts to ensure they reflect your current wishes.
4. Consider Advanced Planning: If your estate exceeds federal or state exemption levels, explore trust planning, charitable giving strategies, and other wealth transfer techniques.
5. Address Parental Rights: Complete any necessary adoptions and ensure guardianship designations are clear.
6. Review Regularly: Revisit your estate plan every 3-5 years or after major life events (birth, death, divorce, significant asset changes, moves to new states).
For Unmarried Same-Sex Couples:
1. Create Comprehensive Wills: This is NON-NEGOTIABLE. Without wills, your partner has no inheritance rights.
2. Execute All Healthcare Documents: Healthcare power of attorney, living will, and HIPAA authorization are essential.
3. Consider Joint Ownership: For major assets like homes, joint tenancy with rights of survivorship ensures automatic transfer.
4. Use Beneficiary Designations: Name your partner as beneficiary on all accounts that allow it.
5. Evaluate Marriage: Consider whether the legal and tax benefits of marriage outweigh any reasons for remaining unmarried.
6. Purchase Life Insurance: Ensure adequate coverage to provide for your partner and cover any potential estate taxes.
7. Create a Living Trust: A trust can provide privacy, avoid probate, and protect your partner’s inheritance from challenges.
Working with Professionals
Estate planning for same-sex couples benefits from working with knowledgeable professionals:
Estate Planning Attorney: Choose an attorney experienced with LGBTQ+ estate planning who understands the unique issues same-sex couples face. Ask about their experience and approach to same-sex couple planning.
Financial Planner: A fee-only fiduciary financial planner can help coordinate your estate plan with your overall financial strategy.
Tax Advisor: For complex estates, a CPA or tax attorney can optimize your plan to minimize tax liability.
Insurance Professional: Ensure adequate life insurance coverage and proper beneficiary designations.
Conclusion
While same-sex couples now enjoy many of the same legal rights as opposite-sex couples, proactive estate planning is still essential. Unique family dynamics, past legal inequalities, and ongoing uncertainties make it crucial to have a clear, comprehensive plan that protects your partner, honors your wishes, and secures your legacy—regardless of whether you’re married or not.
At Horn & Johnsen SC, we understand the specific needs of same-sex couples and are here to provide inclusive, knowledgeable estate planning services tailored to your life and goals. To get started, call us at 608.829.2525 or email info2016@hornjohnsen.com. Let’s work together to create a plan that gives you peace of mind and protects what matters most.
