The Life Insurance Conversation Every LGBTQ+ Couple Should Have

For many LGBTQ+ couples, life insurance is not really about money.

It is about making sure that the person you built your life with is still able to live that life after you are gone.

That distinction matters.

For a married couple, it can be easy to assume that everything will naturally pass to the surviving spouse. But estate planning does not happen automatically simply because two people love each other. And for LGBTQ+ couples—particularly unmarried couples, couples with complicated family relationships, or couples who came to their families later in life—there can be an even greater need to make sure that the law, the beneficiary designations, and the couple's wishes are all saying the same thing.

Life insurance can be one of the most important pieces of that plan.

It is about protecting the life you built together

Imagine a couple who has spent twenty years building a home together.

They have shared a mortgage. They have taken care of each other. Maybe one partner earns substantially more than the other. Maybe one partner stepped away from work to care for a child, a parent, or the household. Maybe they simply built a life in which each person's financial contributions look very different.

Then one partner dies.

The surviving partner still has the mortgage.

The property taxes still come due.

The household expenses continue.

There may be children to support, retirement savings to replace, or simply the need for the surviving partner to have enough financial breathing room to grieve without immediately worrying about whether they can afford the life they shared.

That is what life insurance can provide: liquidity at exactly the moment when a family needs it most.

And then there is the beneficiary designation

This is where estate planning becomes particularly important.

A life insurance policy generally passes according to its beneficiary designation—not according to whatever someone may remember being discussed years ago.

That means an old beneficiary designation can completely undermine an otherwise carefully prepared estate plan.

Consider someone who purchased a life insurance policy when they were single.

The beneficiary might still be a parent, sibling, or other relative.

Years later, that person meets their partner. They build a home together. They get married. They create an estate plan. They may even establish a trust.

But nobody updates the life insurance beneficiary designation.

If that person dies, the insurance company generally looks to the designation on the policy.

The result can be profoundly different from what the couple intended.

The person who shared the decedent's life may be left trying to sort out the consequences while a relative—someone named years before the relationship even existed—receives the insurance proceeds.

For LGBTQ+ couples, that possibility can be especially painful where relationships with family members are complicated or estranged.

Your estate plan should not depend on an old beneficiary designation that predates the life you have built.

Life insurance and estate taxes

There is another conversation that becomes important as an estate grows: estate tax.

Life insurance proceeds paid to a beneficiary are generally not subject to federal income tax.

But that does not necessarily mean the proceeds are outside the estate for estate-tax purposes.

For federal estate-tax purposes, life insurance can be included in the insured's gross estate when the insured possesses certain ownership rights or incidents of ownership in the policy.

That distinction can become important for families with substantial assets.

For 2026, the federal basic estate-tax exclusion is $15 million.

New York is different. For deaths occurring in 2026, New York's basic estate-tax exclusion is $7.35 million.

So a family can have an estate that does not create a federal estate-tax problem but may still require careful New York estate-tax planning.

And life insurance can be a significant asset when calculating the overall estate.

Sometimes an irrevocable life insurance trust makes sense

For certain families, an irrevocable life insurance trust (ILIT) may be part of the solution.

An ILIT is generally designed to own life insurance outside the insured's taxable estate, provided it is properly structured and administered. The IRS specifically describes insurance trusts as irrevocable trusts that can be designed to keep insurance proceeds from being included in the grantor's federal gross estate.

But an ILIT is not something to create simply because someone has a life insurance policy.

It requires careful planning.

The ownership of the policy matters. The insured's rights over the policy matter. Transfers of existing policies require particular attention to the federal three-year rule. And the trust must actually be administered as designed.

This is where estate planning, tax planning, and financial planning need to work together.

The most important question may be a simple one

Who receives the money if you die tomorrow?

Not who you intend to receive it.

Not who you told your partner should receive it.

Not who you think your will says should receive it.

Who does the insurance company currently have listed?

And then ask the same question about your retirement accounts.

Your IRA.

Your 401(k).

Your other employer retirement plans.

Those beneficiary designations deserve the same attention as your will or trust.

For LGBTQ+ couples, planning is about more than documents

At Adelman Bodner Law Firm, we often tell clients that estate planning is not really about creating documents.

The documents are the mechanism.

The real purpose is to make sure that the people you love are protected.

For an LGBTQ+ couple, that can mean making sure your partner has the financial resources to remain in the home you built together.

It can mean making sure an