Love and the Law: Why Words Matter in Estate Planning

While I was completing a Masters of Law in Taxation in the mid-2000s (which is coincidentally the beginning of the worst pick up line ever), the world was different. Smartphones were just starting, cameras with film were still a thing, and no state in our great Union had yet recognized same-sex marriages.

Marriage vs Union

I distinctively remember discussions in one of my tax classes about what it meant if New York would follow the footsteps of Massachusetts and pass legislation recognizing such a union as a “marriage.” Also how, for planning purposes, things would get complicated because federally, no such recognition existed. For example, certain benefits such as tax deductions could be available at the state level but not at the federal level. Health Insurance benefits, head of household filings on tax returns, retirement benefits, all hinged on words like “Spouse” and “Marriage.” While there were conversations about what the word marriage meant spiritually or religiously, there were real life ramifications to how those terms were defined. The reason is because words matter.

Yes, perhaps in today’s climate, words don’t mean quite as much as they did before. I think of our political landscape and find it hard to believe that political candidates and elected officials can say some of the things they do when those same words would end campaigns and tenures of the past. However, in my world, that is the world of legal documents, legal precedent, and estate and elder law planning, words are even more important than ever.

The Word “Spouse” is important

Being a “spouse” is an important legal fact. Consider for a moment some basic estate planning. In New York if you die without an estate plan, your significant other’s inheritance will depend on their legal designation. If the person you love and wish to spend the rest of your life with is your “spouse,” your death will mean that they are entitled to no less than ½ of your estate, and in many cases, 100% of your estate. Have a significant other who is not officially your spouse? Well, that person may well receive nothing, zero, zilch, nada under the laws of New York unless you specifically provided for him or her with a Will, Trust, or have designated them as a beneficiary or co-owner of your assets.

Your Beneficiary Designation Matters

It’s not a mental exercise. This happens all the time. First of all, people get married later and later. Oh they met a decade ago, but they wait to tie the knot or decide they will never get married. Other times, it is your second love that is the love of your life. But life is more complicated. “She has kids, you have kids, when they are all older, then perhaps you’ll get married.” In the mean time, lives are commingled, as are assets. She sells her place, you keep yours. Then one day, the unthinkable happens and without plans or guidance, we end up with a surviving partner with no legal rights in the estate of their soulmate.

Now, before you think I am sponsored by the Wedding Hall Association of America (it doesn’t exist), my solution is not that everyone gets married. Far from it. My solution is that everyone has a plan. Speak to an attorney and create an estate plan. Why? Because words matter.

Have an Estate Plan

Another all too familiar fact pattern involves children of previous relationships. Bob meets Anne. Bob has a daughter from a previous relationship who is only 2 years old when he met Anne. Bob and Anne fall in love, get married, and have children together. Anne is a step-mother for Bob’s daughter. She treats her children, step or otherwise exactly the same. Her love has no bounds. It is one big happy modern family. Question. Is Bob’s daughter a daughter to Anne? Unless Anne adopted her, which rarely will happen (because biological mom still exists), the answer is no. That has huge estate planning ramifications. The language in Anne’s estate plan needs to be ‘just so’ in order to make sure that everyone she considers to be her child is treated the same. The truth is a step-daughter has no rights to an estate. “Child” has a definition and while love may be boundless, you can’t escape one fact.

Words Matter.