The 2015 Supreme Court decision in Obergefell v. Hodges shifted the principle question of marriage for many same-sex couples from “why can’t we get married” to “should we get married,” and shifted the financial planning landscape with it. Married same-sex couples now have access to the full federal and state legal apparatus that opposite-sex couples have always had — the unlimited marital deduction, spousal Social Security benefits, joint filing, qualified retirement plan spousal rules, and the rest. Unmarried same-sex couples in committed relationships, who in many cases were planning around the absence of marriage rights before 2015, continue to face structural challenges that the planning has to address explicitly.
For Divorce Financial Coaches, family lawyers, and estate attorneys working with same-sex couples in divorce or in proactive planning, the considerations fall into two categories. For married same-sex couples, the planning is essentially the same as for opposite-sex couples, with attention to whether prior plans (created when same-sex marriage was not recognized) need to be updated to reflect the new framework. For unmarried same-sex couples, the planning needs to address the gaps that the absence of marriage creates, with structures that approximate the protections marriage would have provided.
What follows is a working brief on five planning considerations specifically relevant to same-sex couples, whether married or not. The considerations are not exclusively applicable to same-sex couples — many apply to unmarried opposite-sex couples as well — but they have particular salience for same-sex clients given the recent history of the legal framework and the patterns of planning that emerged before and after Obergefell.
Why same-sex couples warrant specific planning attention.
The legal framework around same-sex relationships changed substantially in a short period. Same-sex marriage was not federally recognized before 2013 (United States v. Windsor). It was not constitutionally protected nationwide until 2015 (Obergefell v. Hodges). Many same-sex couples who entered relationships during the period of non-recognition built financial lives, accumulated assets, and engaged in estate planning under the assumption that marriage was not available. The planning structures established under that assumption may not be optimal under the current framework, and the planning was often done by attorneys whose expertise was specifically in non-marital structures.
For couples who married after Obergefell, the planning is generally indistinguishable from opposite-sex couples’ planning in legal terms. The substantive financial questions, the estate planning considerations, the divorce mechanics — all operate within the same framework. The lawyer or Divorce Financial Coach serving these clients does not need any specialized knowledge that they would not also bring to opposite-sex clients.
For couples who married before Obergefell in jurisdictions where same-sex marriage was already recognized (Massachusetts beginning in 2004, several others before 2015), the marriages are validly entered and continue to be recognized. Practitioners should be aware that some legal challenges to providing spousal benefits to pre-Obergefell same-sex couples have continued in various contexts (the Houston health care case being one widely-cited example), and the planning should account for the possibility of jurisdictional or institutional non-recognition in specific contexts.
For unmarried same-sex couples, the planning continues to require structures that opposite-sex couples in similar relationships would also need but that married couples can often avoid through default legal protections. Powers of attorney, living trusts, comprehensive beneficiary designations, and specific provisions for non-biological children are all more important for unmarried couples than for married ones, and the same-sex couples who chose not to marry (or who cannot marry due to jurisdictional or personal circumstances) need the planning that fills the gap.
Consideration one — review existing estate plans.
Every couple should periodically review their estate plans with a team of advisors to confirm that the planning reflects current wishes and current legal framework. For same-sex couples specifically, the review should address whether the existing plan was structured under the pre-Obergefell framework and whether updates are warranted to take advantage of post-Obergefell options.
Married couples have the benefit of the unlimited marital deduction, which means they can gift during their lifetime or bequeath at death an unlimited amount of assets to a U.S. citizen surviving spouse without any gift or estate tax. The unlimited marital deduction is the structural foundation of most spousal estate planning and produces dramatic differences in the cost of inter-spousal wealth transfer.
Unmarried couples — whether by choice or by circumstance — do not have access to the unlimited marital deduction. They must engage in different estate planning techniques to pass the maximum amount they can to their partners without triggering gift or estate tax. The techniques include lifetime gifting using the annual exclusion and lifetime exemption amounts, intentionally defective grantor trusts (IDGTs), grantor retained annuity trusts (GRATs), charitable lead annuity trusts (CLATs), and various other structures that allow wealth transfer with reduced or eliminated transfer tax exposure. Each is more complex than the marital deduction approach and produces planning costs and ongoing administrative burdens that married couples can largely avoid.
The intestacy default — what happens when a person dies without a will — also varies for married versus unmarried partners. Most states’ intestacy laws provide for a minimum amount to pass to a surviving spouse. Unmarried partners are typically excluded from intestacy distribution entirely; the assets pass to the deceased partner’s blood relatives (parents, siblings, or other relatives depending on the state’s specific intestacy rules). For an unmarried couple where one partner has substantial assets and the relationship has long been the deceased’s primary attachment, intestacy can produce devastating outcomes — the surviving partner receives nothing, while the deceased’s parents or siblings receive everything. The structural protection is to have a will in place that explicitly provides for the partner.
Consideration two — establish a revocable living trust.
A revocable living trust is a trust set up during an individual’s lifetime that can be changed or revoked at any time. It can serve as an individual’s main dispositive document instead of a will. Unlike a will, the provisions of a revocable trust take effect not only in the event of death but also in the event of incapacity. A living trust can provide for the trust creator, the creator’s partner, and their children during any period of incapacity prior to death.
At death, the trust can have the same provisions that an individual would put in a will, but while wills become public documents through the probate process, trust provisions can be kept confidential. Using a revocable trust may be particularly useful for couples — same-sex or otherwise — whose family members may challenge their wishes in the event of incapacity or at death. Appointing an independent trustee, particularly a neutral and experienced corporate trustee, on the trust creator’s death or disability can often defuse the acrimony that might otherwise arise between the trust creator’s partner and other family members.
For same-sex couples whose extended families may have been less than supportive of the relationship, the privacy and structural neutrality of a revocable trust can provide meaningful protection that a will alone cannot. The trust creator’s wishes are documented in a private document executed during life rather than in a public document subject to court supervision. The trustee’s neutral role provides a buffer between the surviving partner and any challenging family members.
Having assets pass via a revocable trust instead of under a will also avoids the cost and potential delays associated with the probate process. The benefit is largest in jurisdictions with extensive probate requirements (California is the most-cited example) but is meaningful in most jurisdictions. For unmarried couples specifically, the probate avoidance is particularly important because surviving partners do not have the procedural standing in probate that surviving spouses have, and probate disputes can be more contentious as a result.
Consideration three — update advanced directives.
All couples should consider having advanced directives in place, including a health care proxy (which allows one partner to make medical decisions for the other in the event they are unable to do so), a financial power of attorney (which allows one partner to handle the other’s financial affairs), a living will (which evidences an intent not to be kept alive in a vegetative state), and a HIPAA privacy authorization form (which allows healthcare professionals to disclose medical information to specified individuals).
These documents are especially important for unmarried couples, who could face additional challenges to prove they are authorized to make medical or financial decisions on behalf of their partners. Hospital admission procedures, medical decision-making protocols, and financial institution policies frequently default to providing access and authority to spouses and blood relatives, with unmarried partners required to produce specific documentation to be recognized.
For same-sex couples specifically, the advanced directives provide protection against the legacy of hospital and institutional practices that historically did not recognize same-sex partners as decision-makers. Even after Obergefell, individual institutions and individual healthcare providers may not default to recognition; the directive provides clear authority that the partner can produce.
The directives should be executed in proper form for the state where they will be used (forms vary by state) and updated periodically to reflect changing circumstances. The directives should also be accessible — copies with both partners, copies with primary care providers, copies in the couple’s emergency contact information. A directive that exists in a safe deposit box but cannot be produced at the emergency room is not a functional directive.
Consideration four — update beneficiary designations.
Beneficiary designations on retirement accounts, life insurance policies, annuity contracts, and similar instruments control the disposition of those assets regardless of what a will or trust may say. The designations override the dispositive documents. Periodic review and update of beneficiary designations is one of the highest-leverage estate planning activities for any couple, and it is particularly important for same-sex couples in two specific scenarios.
First, retirement accounts created before the partner was named as a beneficiary may default to other beneficiaries (parents, siblings, prior spouses, or estate) depending on what the original designation said. Many same-sex couples in long-term relationships have retirement accounts opened years or decades before the partner relationship would have been recognized as beneficiary-eligible. Without an affirmative update, the original designation controls. A partner who has been the deceased’s primary attachment for twenty years can receive nothing from the retirement account if the designation was never updated.
Second, designations made before the relationship may not reflect the current intentions. An ex-partner named as beneficiary in a prior relationship, a parent named when no partner relationship existed, or a charitable organization named when the relationship was less serious — each can produce inheritance flows the current intention would not support. The review should cover every account where a beneficiary can be designated and confirm that each designation reflects current wishes.
A surviving spouse may have some rights under ERISA’s spousal consent rule for qualified retirement plans regardless of the named beneficiary, but for non-qualified plans, IRAs, life insurance, and other instruments, the beneficiary designation controls. The protective practice is to keep designations updated whether the couple is married or not — for unmarried partners, the update is essential.
Consideration five — protect the children.
Same-sex couples with children face a specific estate planning challenge when only one parent is biologically related to the children. The non-biological parent’s legal relationship to the children may be unclear or unprotected, particularly if the couple lives in a jurisdiction without clear second-parent adoption procedures or if the children were born or adopted before the legal recognition of the relationship.
The structural protections include several mechanisms. Second-parent adoption legally establishes the non-biological parent’s relationship to the children. Where available (and most U.S. jurisdictions now permit second-parent adoption for same-sex couples), the adoption provides the strongest form of protection — the non-biological parent becomes a legal parent with all of the rights, responsibilities, and protections that legal parenthood entails.
Children who are adopted or biologically related to one partner should be clearly identified in all estate planning documents of both partners. The estate plans should specifically provide for the children’s financial future, with appropriate trusts, guardianship designations, and beneficiary structures. The non-biological partner should consider adopting the child if there is no other biological parent — the adoption protects against potential future custody battles with the biological parent’s family if the biological parent dies or becomes incapacitated.
For unmarried same-sex couples with children, the planning is particularly critical. Default custody and inheritance rules typically favor the biological parent’s blood relatives over the non-biological partner, even when the non-biological partner has functioned as a parent for years. Affirmative planning — through adoption where available, through wills naming the partner as guardian, through trust structures providing for the children’s care under the partner’s direction — is the structural protection.
Divorce planning specific to same-sex couples.
In divorce, married same-sex couples are subject to the same legal framework as opposite-sex couples. Property division, support obligations, custody determinations, and the procedural mechanics operate under the same statutes and case law. The substantive planning the Divorce Financial Coach brings is the same.
Several considerations specific to same-sex couples can arise. For couples married for many years but who acquired substantial assets before marriage was available to them (often during a long pre-marital cohabitation), the question of whether pre-marital accumulation should be treated as marital or separate property under the applicable state’s rules can be substantive. Some courts have considered the pre-marital cohabitation period in equitable distribution, particularly when the couple held themselves out as committed partners and would have married if it had been legally available; others have treated the pre-marital period strictly as non-marital.
For couples whose state allowed same-sex marriage before Obergefell, the marriage date used for various purposes (alimony calculations, retirement account division, Social Security spousal benefits) is the actual marriage date, not the Obergefell date. The federal recognition was retroactive following Windsor; the state-level rights ran from when the state first permitted same-sex marriage. For Massachusetts couples married in 2004, this matters substantially — federal spousal benefits were not available before 2013, but the underlying marriage and the rights it created at the state level have been continuously in effect since 2004.
For couples with children where one parent is non-biological, the divorce should specifically address custody, support, and ongoing parental rights with awareness that the non-biological parent’s standing may be more vulnerable than the biological parent’s. Second-parent adoption (if completed before the divorce) protects the non-biological parent. Without adoption, the non-biological parent may face significant difficulties asserting parental rights in divorce, particularly in less-progressive jurisdictions or if the biological parent contests parental status.
Bottom line — comprehensive planning for all same-sex couples.
Although married same-sex couples can now leverage spousal benefits once reserved for opposite-sex spouses, the considerations described above remain important for all same-sex couples. The lack of planning can have disastrous consequences for any individual; the potential pitfalls are particularly meaningful for unmarried partners and for partners whose extended families may not be fully supportive.
The right team of advisors can help same-sex clients navigate these complex issues and secure their financial futures. The team typically includes a family lawyer with experience in same-sex family law, an estate planning attorney familiar with the specific structures relevant to the couple’s situation, a Divorce Financial Coach or financial planner who can integrate the planning with the broader financial picture, and where appropriate a tax professional and trust officer.
How VennBoard supports planning for same-sex couples and other clients with specific planning needs.
The infrastructure that supports the integrated planning the considerations above require is the same infrastructure that supports any complex multi-professional engagement. The team needs shared workspace, the documents need structured tagging and access controls, the planning artifacts need to persist over years, and the coordination needs to operate sustainably across the team.
VennBoard’s matter workspace supports the integration across the planning team. The estate planning documents, the advanced directives, the beneficiary designation records, the trust structures, the adoption documentation, and the financial picture all live in one workspace with role-based access controls that respect both the privacy of specific documents and the integration the planning requires. The matter persists across years and across life events, supporting the periodic reviews that effective planning requires.
Two operational features matter most for long-arc planning relationships. The audio and video transcribe tool produces searchable transcripts of planning conversations across the years, which is invaluable when the planning needs to evolve as circumstances change or new legal frameworks emerge. The shared messaging log captures the texture of the relationship between client and practitioner over time, providing the continuity that supports trust-building in long-running engagements.
Comprehensive planning for same-sex couples — and for any client whose situation requires structures that the legal defaults do not adequately provide — produces meaningful protection only when the planning is actually executed, maintained, and updated over time. VennBoard exists to support the maintenance and updating that produces lasting protection. Professional walkthrough at VennBoard.com, product detail at VennBoard.com.