Recently, a same-sex couple thought they were doing everything right. They had been together nearly 25 years and were married in San Francisco when it became legal to do so. They each named the other as beneficiary on life insurance policies. Their property was in both their names.
However, they moved to another state that did not recognize same-sex marriages. One of them took a new job and died suddenly — without a will. This means that $250,000 is now tied up in probate court. It is a tragedy which did not need to happen.
According to news sources, when the couple sold a home, they took $100,000 in proceeds and put it in an individual investment account. The partner who got the new job, in Minnesota, mistakenly did not list a beneficiary on his new employer’s life insurance policy. When he died, those items in his estate which were not jointly owned by his partner went into probate.
The life insurance payout and the extra $100,000 in the investment account went to the parents of the deceased. Apparently the investment account was the only one that the two partners had in which one signature was missing. It may be a costly mistake.
Even though the parents of the deceased man wanted their son’s partner to have the estate, believing the man was like a son to them, probate court prevented it. The parents would have to give the assets to the surviving partner, who would have to pay a gift tax on the proceeds.
The surviving partner has filed a petition with probate court to be named as the heir. To date, the probate judge has not yet ruled on the petition. This issue is playing out at a time in which a state constitutional amendment is being proposed which would define marriage as between a man and a woman.
To prevent probate disputes and problems such as these, it is a good idea to obtain legal advice for estate planning, wills for same-sex couples, trusts and other long-term planning devices.
Source: StarTribune,”Hennepin probate case shows how marriage law stymies inheritance,” Abby Simons, May 25, 2012