05 Oct Power of Attorney and Estate Tax Issues for Domestic Partners
A durable power of attorney allows your domestic partner to make business, financial and legal decisions on your behalf should you become incapable of managing your own affairs. Without a durable power of attorney, your partner will have no access to your financial and/or legal affairs.
Estate taxes provide another potential complication. Married couples enjoy an unlimited marital deduction when it comes to estate taxes. If you leave everything to your spouse, it’s free of federal estate tax until the surviving spouse dies. If you leave assets to anyone else such as a domestic partner, they could be taxed at the federal and state level. Domestic partners easily could find themselves in a taxable situation which could have severe consequences. With a married couple, you’re not concerned about estate taxes until the death of the second spouse. With domestic partners, though, it’s an issue at the first death.
Click here for Estate Planning Considerations for Domestic Partners.