Planning Considerations for Same Sex Couples and Civil Unions

For same-sex couples living in Connecticut, civil unions are now an exciting reality (Massachusetts, California and Vermont offer similar alternatives).  If you live in Connecticut (or one of the other 3 states) you and your partner now have new options, decisions and concerns that same-sex couples have never previously had. One of the many issues that should be considered is inheritance and death taxes.  Without a legal union, a couple will need to sign a number of agreements to create even a partial framework of protection in the event of death or incapacity, and certain tax benefits are forever denied same-sex couples, union or not.  With a civil union the surviving spouse generally inherits the estate based upon the terms of a written will or living trust and/or the terms found in the intestatacy statute (the statue which outlines how an estate should be distributed when a person dies without a will).  Other considerations are the implementation of living wills, health care directives and powers of attorney.  Spouses by civil union or marriage are not automatically granted the authority to act on each others behalf. Thus, it is very important to execute the appropriate documentation in order to avoid difficulty if a spouse becomes incapacitated  or is deemed incompetent to act for themselves.  Estate and gift taxes are another concern. Laws exempting married couples from inheritance taxes and gift taxes at the federal level do not yet apply to same-sex couples, because the federal government does not recognize same-sex unions even where state law approves.  However, Connecticut has its own death and gift tax which can affect same-sex couples who have civil unions in Connecticut.  It is very important when considering a civil union to think about  all of the legal pros and cons.  As with married couples once the decisions has been made to move forward with the civil union same-sex couples must protect themselves, their affairs and families by implementing the appropriate planning.