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Estate Planning for the Non-Traditional Family

Estate Planning for the Nontraditional Family

The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

We have moved a long way in 16 years, and whether you agree with them or not, it is becoming increasingly common in the United States to encounter a group of people who reside in the same household, but who are not part of what might be considered a “traditional family.” The Census Bureau estimates a tenfold increase in the number of unmarried partners’ households since 1970, and this figure does not account for gay and lesbian couples.

Non-Traditional Family

In this article, the term “nontraditional family” encompasses the following family groups: (1) unmarried adults who are opposite-sex partners, (2) unmarried adults who are same-sex partners, and (3) single parents and adults with children, whether minor or adult children. To a great extent, each of these types of “non-traditional families” shares similar characteristics for income and transfer tax issues. In addition to the similarities, there are issues that are unique to same-sex couples. I will attempt to highlight some of these areas this week.

Family Members or Not

The first step in determining the rights and obligations of unmarried adults sharing a home is to determine whether the other person(s) residing in the same household are “family members” or not. Are the other residents (1) spouses, (2) parents, (3) children, (4) domestic partners, or (5) dependents? Each has its own unique characteristics and questions to be addressed.

Much of an individual’s tax status and estate planning depends on whether or not that individual is considered married. Three different circumstances come to mind with the term “spouse.”

Common Law Marriage

Texas, as well as several other states, recognizes Common Law Marriage. This is a form of informal marriage that could result in two individuals who share the same household being considered spouses. In Texas, the burden is on the party claiming that a valid common law marriage exists to provide evidence that establishes three elements: (1) an agreement to be married; (2) cohabitation in Texas; and (3) holding out to others that the parties are married.

Unmarried opposite-sex couples may either fail to meet the requirements for a common-law marriage or simply choose to avoid treatment as spouses under Texas Law. Some opposite-sex couples actually choose to remain unmarried in order to avoid what they perceive to be a “marriage penalty.” A common example of this decision can be seen among older adults who are of the age to draw their social security benefits and choose to avoid marriage in order to maximize their benefits, even though they live in a committed relationship.

In June 2015, the U.S. Supreme Court legalized same-sex marriages in a controversial 5 – 4 decision. This ruling struck down the bans on same-sex marriage many states had put into place. Despite the Supreme Court’s action, same-sex couples still may encounter additional burdens when trying to claim benefits from employers.

Estate Planning is for Every Type of Family

Both unmarried opposite-sex partners and same-sex partners will want to provide protection for their relationship and for the other partner in the event, one partner becomes incapacitated. Legally married or not, due to the controversial nature of these relationships, these partners will need to create legal documents which allow the non-disabled partner to care for and manage the disabled partner’s affairs. Unfortunately, many families are not ready to accept these lifestyles and the potential for conflict exists.

If you find yourself in any of the above situations, then you should contact an attorney to assist you in your long-term planning. Most attorneys will be familiar with devices to assist in this area.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas. www.moakandmoak.com

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