Estate Planning For Same Sex Couples

LGBTQ Estate Planning in Cary, NC

Marriage equality changed a great deal for same-sex couples, but it didn’t eliminate the estate planning challenges that the LGBTQ community has long faced. Married same-sex couples gained access to federal benefits such as the unlimited marital deduction, subject to applicable requirements, and the inheritance rights and other legal protections generally available to married spouses. Marriage can also provide a spouse with certain health care decision-making rights under state law, but a health care power of attorney remains an important way to designate a preferred decision-maker. Unmarried partners, couples in domestic partnerships or civil unions, and transgender individuals still navigate significant gaps in legal protections that only proper estate planning can close.

At Compass Estate and Tax Planning, our estate planning attorney works with LGBTQ couples and individuals in Cary and throughout North Carolina to build plans that actually reflect their lives. Call us at 919-646-6549 to talk through where your plan stands.

What the Supreme Court’s Rulings Changed and What They Didn’t

The Supreme Court’s decisions in *United States v. Windsor* (2013) and *Obergefell v. Hodges* (2015) extended federal and state marriage rights to same-sex couples, but legal recognition is not automatic protection, and it does not reach unmarried partners at all.

Before Obergefell, same-sex couples faced significant barriers to federal recognition of their marriages. Following the Supreme Court’s decisions in United States v. Windsor and Obergefell v. Hodges, legally married same-sex couples generally became eligible for the federal tax treatment and spousal benefits available to other married couples, subject to the requirements of the applicable laws and benefit plans. These protections can include the federal estate tax marital deduction, certain retirement account beneficiary and rollover options, and spousal rights under applicable laws.

What the Supreme Court did not resolve:

  • Domestic partnerships and civil unions: not treated the same as marriage under federal law, and state recognition varies. Partners in these arrangements do not necessarily receive the same inheritance, tax, or decision-making rights as married spouses. Whether a partner can inherit or participate in medical decisions depends on applicable law, property ownership, beneficiary designations, and the documents in place. Without appropriate planning, a surviving partner may face disputes with relatives or other interested parties.
  • Transgender individuals: gender identity discrepancies between legal documents and identification records can create complications in estate administration when a death certificate or probate filing conflicts with outdated legal records.
  • Prior relationships: couples who married in another state or jurisdiction should review estate planning documents prepared before or after their marriage to confirm that beneficiary designations, property ownership, powers of attorney, and other provisions reflect their current circumstances and intentions.

How State Intestacy Laws Affect Same-Sex Couples

Under North Carolina’s intestacy laws, property not effectively disposed of by a will generally passes to the decedent’s heirs under a statutory order of succession. An unmarried partner who is not otherwise a legal heir generally does not inherit solely because of the length or nature of the relationship.

For same-sex couples who are not legally married, the practical consequences are severe:

  • Surviving partner disinheritance: a long-term domestic partner receives no portion of the estate unless they have an independent legal right to inherit. Relatives who qualify as heirs under North Carolina law may inherit ahead of an unmarried partner who has no independent inheritance rights.
  • No decision-making authority: without a health care power of attorney or other applicable legal authority, an unmarried partner may not have priority to make medical decisions. North Carolina law establishes a statutory order for surrogate decision-makers, and an individual with an established relationship who can reliably convey the patient’s wishes may qualify under certain circumstances.
  • Asset distribution disputes: jointly owned property, accounts without clear or effective survivorship provisions, and personal property can become the subject of disputes between a decedent’s heirs and a surviving partner. The outcome depends on ownership records, applicable law, and any valid estate planning documents.

For married same-sex couples, intestacy is less immediately dangerous, but a will remains essential to control asset distribution, appoint an executor, and nominate guardians for minor children.

Estate Planning Documents Every LGBTQ Individual Needs

Regardless of marital status, a complete set of estate planning documents is the only reliable way for LGBTQ couples to establish legal rights that state and federal law do not automatically grant.

The core documents that create enforceable protections:

  • Will: directs asset distribution, names an executor, and nominates a guardian for minor children. A will allows a parent to nominate a guardian for minor children, subject to court review and applicable law. Without a valid nomination, the court determines guardianship under the applicable legal standards.
  • Revocable living trust: can allow assets properly transferred to the trust to pass according to its terms without probate administration, provide for the management of trust property during incapacity, and help maintain privacy regarding the distribution of trust assets. The benefits depend on proper trust funding, the trust’s terms, and the assets involved.
  • Durable power of attorney: authorizes your designated agent to handle the financial matters specified in the document, subject to its terms and applicable law. Without an effective power of attorney or other legal authority, an unmarried partner generally cannot manage another person’s financial affairs solely because of the relationship.
  • Health care power of attorney: designates who makes medical decisions on your behalf, including end-of-life care and communication with medical providers.
  • HIPAA privacy authorization form: a HIPAA authorization can help ensure that your partner may receive the medical information you authorize them to access. Without an authorization or another applicable basis for disclosure, a health care provider may be limited in the information it can share, although HIPAA permits certain disclosures in specified circumstances.
  • Beneficiary designations: retirement accounts, life insurance, and payable-on-death accounts generally pass according to beneficiary designations and applicable plan terms, rather than a will. Keeping these current is one of the simplest and most important planning steps available.

Parenting, Adoption, and Non-Biological Parent Rights

In households where only one parent has a biological or legally recognized relationship to a child, estate planning should address what happens if that parent dies. A non-biological parent’s parental rights depend on the legal relationship established with the child, including any applicable adoption, parentage determination, or court order.

  • Second-parent adoption: a non-biological parent who completes a valid adoption generally acquires the legal rights and responsibilities of a parent. Without legally recognized parentage, a surviving partner may face challenges to their continued care of the child. The outcome depends on the circumstances, applicable parentage and custody laws, and any existing court orders.
  • Guardian nominations in a will: a parent’s will can nominate a proposed guardian for a minor child. The nomination is subject to applicable law and court review and does not automatically establish parental rights for a surviving partner who is not a legal parent.
  • Adoption tax credit: eligible taxpayers may qualify for the federal adoption tax credit for qualifying adoption expenses, subject to applicable eligibility rules, income limitations, and other requirements.

Tax Planning for Same-Sex Couples in North Carolina

Married same-sex couples have access to the same federal estate tax benefits as opposite-sex married couples, but taking full advantage requires deliberate planning.

Key tax considerations:

  • Unlimited marital deduction: qualifying transfers between legally married spouses generally qualify for the federal estate tax marital deduction, which can defer federal estate tax on those transfers. Special rules may apply, including when the surviving spouse is not a U.S. citizen.
  • Gift splitting: married same-sex couples may be able to elect gift splitting for federal gift tax purposes, allowing eligible gifts to third parties to be treated as made equally by both spouses. Specific filing requirements and eligibility rules apply. In 2026, the annual gift tax exclusion is $19,000 per donor, per recipient, so eligible gift splitting can generally allow a married couple to give up to $38,000 per recipient without using their lifetime gift and estate tax exemptions.
  • Taxable estate planning: for estates that may be subject to federal estate tax, certain irrevocable trusts may help reduce the taxable estate while providing for a surviving spouse or partner. The tax consequences depend on the trust’s structure, the assets transferred, retained rights, and applicable federal tax rules.
  • Unmarried partners and gift taxes: transfers between unmarried partners do not qualify for the federal gift or estate tax marital deduction. Depending on the value and nature of a transfer, applicable exclusions, and the donor’s or decedent’s available tax exemption, transfers during life or at death may result in gift or estate tax liability. This is one of the most significant financial distinctions between married and unmarried partners.

For couples with more complex tax situations, coordinating with both an estate planning lawyer and a tax professional can address the legal and financial sides of the plan together.

Frequently Asked Questions About LGBTQ Estate Planning in North Carolina

Does marriage equality mean same-sex couples no longer need special estate planning?

No. While marriage equality secured critical federal benefits for legally married same-sex couples, it did not eliminate the need for tailored planning. Domestic partnerships and civil unions still lack full federal recognition, non-biological parents require specific legal steps to protect parental rights, and all couples benefit from clearly documented instructions for health care, finances, and asset distribution.

Can my domestic partner make medical decisions for me in North Carolina?

An unmarried partner does not automatically have the same decision-making priority as a spouse under North Carolina law. A health care power of attorney allows you to designate your partner as your health care agent if you become unable to make or communicate health care decisions. A HIPAA authorization can also help ensure that your partner can access the medical information you authorize them to receive. These documents should be prepared in accordance with applicable law.

What happens to jointly owned property if my same-sex partner dies without a will?

It depends on how the property is titled. Property held in a valid form of joint ownership with a right of survivorship generally passes to the surviving owner outside the deceased owner’s probate estate, subject to applicable law and any relevant ownership documents. Property in one partner’s name alone passes through their estate, and without a will, North Carolina’s intestacy laws govern distribution, which may direct assets to legal heirs rather than the surviving partner.

Are there estate planning differences for transgender individuals?

Transgender individuals should review their estate planning documents, identification records, property titles, and beneficiary designations to ensure that their identity and intended beneficiaries can be accurately established. Documents prepared under a former legal name may remain valid, depending on the circumstances, but should be reviewed to minimize potential confusion during incapacity or estate administration. An estate planning attorney can advise on whether updates or additional documentation are appropriate.

Talk with an Estate Planning Attorney in Cary About Your Specific Situation

LGBTQ estate planning is not one-size-fits-all. Whether you are legally married, in a domestic partnership, unmarried, raising children as a non-biological parent, or navigating documents that predate your current legal name, the right plan depends on your specific circumstances.

Compass Estate and Tax Planning works with same-sex couples and LGBTQ individuals in Cary and across North Carolina to build estate plans that protect what matters. Call us at 919-646-6549 or visit our office at 1155 Kildaire Farm Rd, Suite 204, Cary, NC 27511 to schedule a conversation with our estate planning attorney.