Rainbow Legal Talk

Partners in Civil Unions and Marriages Still Need Planning--Part VI of VII

Jane Doe and Janet Roe as a committed lesbian couple do not have the right to make financial decisions for each other without a financial power of attorney. The question is, will they need a financial power of attorney if they are allowed to marry? The answer is yes, for various reasons and even if married, Jane and Janet should have financial powers of attorney.

The first reason that Jane and Janet should have financial powers of attorney is that they typically would want both of them to have authority to handle the family finances even if the other were not in town to sign documents. If that is what they want, then being married is not enough. If Jane and Janet were refinancing their home and Janet suddenly had to go out of town on business, then Jane would not be able to sign for Janet unless she had a power of attorney. If the cable television account was in Jane’s name and Janet was calling to upgrade the service they were receiving, then she would probably not be able to unless she had a power of attorney. If Janet wanted Jane to call their stock broker and sell $10,000 worth of stocks from Janet’s individual account, then she would not be able to without a power of attorney. Even for married couples, a financial power of attorney is sometimes necessary to handle some transactions.

Another reason Jane and Janet need a power of attorney is in case one of them were incapacitated and the other passed on or were also incapacitated. Who would handle Jane’s finances if she and Janet were incapacitated? The answer is not as clear as with healthcare decisions, and the process of naming someone is considerably more complicated and expensive. First, Jane must be declared incompetent by a court before anyone can step in to handle things, and this is an often embarrassing procedure where an attorney should be hired to make sure it is done properly.

The second step after Jane is declared incompetent is for the court to appoint someone to handle Jane’s finances. Anyone with an interest can apply to be Jane’s conservator and gain the power to liquidate Jane’s assets, pay bills, sell Jane’s house and buy another one, etc. Jane may be concerned about who would get those powers, but a court would be there to oversee the process and make sure her assets were not being stolen. But this is also an expensive process and is not necessary if a financial power of attorney agent is handling things outside of court.

There is also a document that our firm uses just in case someone brings an action in court to appoint someone to handle finances even though there is already a financial power of attorney in place. The Nomination of a Conservator form names people your prefer to handle financial matters if a judge were to name someone. In keeping things simple, nearly all of our clients choose the same people they named as financial power of attorney agents.

Partners in Civil Unions and Marriages Still Need Planning--Part V of VII

Jane Doe and Janet Roe, if married, would be able to automatically make healthcare decisions for each other if they were incapacitated. This is because under North Carolina law they would be the “next of kin” just as much as if they were a hetero married couple. But what if something happened to both of them and they did not have a healthcare power of attorney? They might not like who gets to make healthcare decisions for them.

If Jane were not able to make her own healthcare decisions and Janet was also incapacitated, then Jane’s next of kin can step in and make decisions for her. Jane’s next of kin would be her son John Doe, if he was over 18. If he was not over 18 and Jane’s mother was deceased, then Jane’s estranged and rabidly anti-gay father could make healthcare decisions for her. (Probably not what Jane would want.) If he were deceased or refused to make decisions, then Jane’s flaky, drug-abusing sister could make decisions for her.

You’re starting to get the picture. For any married couple, the most important healthcare agents are listed after the spouse as the primary agent, and this may be even more critical for gay and lesbian couples. If Jane wanted to make sure that her spouse Janet were listed first, and then her cousin Marty, and then her friend Susan were listed as healthcare agents, then it needs to be put in writing by an attorney, signed, witnessed and then notarized. But what about financial decisions? We’ll talk about that next.

Partners in Civil Unions and Marriages Still Need Planning--Part IV of VII

Looking at Jane Doe and Janet Roe and their son John Doe, if Jane and Janet passed on together in a car accident, then John would inherit everything. Let’s assume that Jane and Janet were concerned about John having enough money for college and took out $1 million life insurance policies on each other. Suppose also that they told their parents that they wanted them to handle the money for John until he turned 35, they told everyone they knew that 15-year old John would not be responsible enough to handle money until he was at least 35, and they published a notice in the local newspaper saying that John is not a responsible child, and for the love of God if anything happened to them please do not let John get control of their assets until he turned 35. If Jane and Janet passed on, then John would get everything including the $2 million when he turned 18.

The law is the law ONLY if you fail put your wishes in writing through a properly executed life and estate planning document. In workshops and seminars I hear all of the time “But that’s not what they wanted! Wouldn’t a court try to make sure that their wishes were carried out?” The answer is no, they would not, and there are very good reasons for this.

Judges understand that there are a lot of people who will lie when money is on the line, and deceased people can not come to court to testify about what they wanted. The courts would be packed with people contesting estates if all they had to do was prove “this is what they would have wanted.” If you thought the courts were crowded with frivolous lawsuits before, then imagine what would happen if everyone who died without a properly executed estate plan had to have a judge decide “what they would have wanted,” and anytime there is more than one person who might inherit property, then of course each of them would be arguing that they would have received everything because the deceased person liked them best. The courts would come to a standstill.

Instead, the law on estate plans has been very clear for hundreds of years: either the person has a validly executed trust or will, or they do not. If all of the formalities have been observed in the signing, witnessing and notarization of estate planning documents, then it is valid. If they were not, then it is not valid and no one will try to look at their “intent.” The rationale is: “If they really intended something, then they would have taken the time to put it in writing and have it witnessed and notarized according under law.

It’s clear that even married couples need to make sure their inheritance wishes are put in writing and properly witnessed and notarized. Gay and Lesbian couples can not count on marriage to make sure that their intended wishes are carried out because marriage does not protect as much as you may think. Next, we’ll take a look at some of the other life and estate planning documents and why they are also important to have.

Partners in Civil Unions and Marriages Still Need Planning--Part III of VII

The common problem hetero, gay and lesbian couples will all face is what happens to their property and children if they do not put their plans in writing? We’ve already seen that marriage is not a magical cure that eliminates the need for legal planning. The law is also deficient in handling the vast majority of property distribution plans when it comes to children’s ages.

Because the age of majority is 18 for just about everything except drinking alcohol, that is the age children receive any inheritances free and clear. Let me ask a question for those of you in their 30s or later: what would you have done at age 18 if someone suddenly gave you $500,000? Here are some of the most frequent phrases I hear from clients: “Hummer,” “Vegas,” “Cabo,” “party 24-7,” and “Shop ‘til it’s gone.”

After discussing these issues with my clients, most agree that 25 is a better age to start giving control of a larger inheritance, and some clients choose to spread the inheritance out over two or three payments. It is fairly common for my clients to give one-third at 25, another third at 30, and the rest at 35. Until those ages, a trustee who they appointed handles investments and paying expenses for the beneficiary. Without planning, the beneficiary gets everything at 18.

In the 11 years I have been practicing law, only once was I comfortable with 18 as an age of inheritance. That was when the couple’s 16 year old daughter called to book the appointment, called to follow up to make sure that her parents had kept the appointment, and after the documents were signed followed up to make sure that we had a copy of all of the documents in case her parents misplaced them. I also found out when discussing issues with my clients that their daughter, at 16 years of age, already managed all of the household bills and expenses, balanced the checkbook, and made sure their taxes were filed on time. In the 11 years I have been practicing law, I have also not come across parents who were equally confident in their minor child’s ability to handle finances. Next, we’ll take a look at what happens if an irresponsible and young John Doe inherits property from his parents Jane Doe and Janet Roe if they do not plan ahead.

Partners in Civil Unions and Marriages Still Need Planning--Part II of VII

In looking at the rights that married couples have and partners would get if they were allowed to marry, let’s first look at the right of inheritance. Like most hetero married couples, gay and lesbian couples want their partner to inherit everything. Their concern is that they provide for each other in sickness and in health, and also after death. Unfortunately, North Carolina law does not provide that for married couples who fail to write their wishes done.

If Jane Doe and Janet Doe are married with a son John Doe and Jane passes on, then Janet will get the following from Jane: one half of all real estate ,the first $30,000 of personal property and financial accounts, and then one-half of the rest of the personal property and financial accounts. John Doe would get the rest of the property at age 18. Not exactly what Jane and Janet would want, huh?

Since we’re doing what ifs, what if there were no children to account for? North Carolina is only a little kinder to Janet if Jane passes on and Jane has other relatives. Janet would get one half of all real estate, the first $50,000 of personal property and financial accounts, and then one-half of the rest of the personal property and financial accounts. The rest would go to Jane’s parent or parents, or if deceased to any brothers or sisters (or their children if they were deceased). If none of them weren’t alive, then that share would go to grandparents, and if they were not alive, then to Jane’s aunts and uncles. Basically, the only way under North Carolina law that Janet would receive all of Jane’s estate is if Jane had no relatives any closer than fourth cousins.

Either that or Jane and Janet could work with an attorney to put their wishes in writing so Jane and Janet are both protected. While equality of marriage should remain a goal of the GLBT community, it is not a cure-all for legal protections. Next, we’ll take a look at what happens if Jane and Janet pass on leaving property to their son John.

Partners in Civil Unions and Marriages Still Need Planning--Part I of VIII

While there seems to be a see-saw of civil rights across the nation between state constitutional amendments banning gay marriage and state legislatures and courts approving marriage and civil unions, practical life and estate planning issues are being lost in the shuffle. Like the proverbial dog chasing the car down the street, what happens when the car is actually caught?

Right now, committed gay and lesbian couples in most states have to work with an attorney to create their life and estate plans. If they want their partner to make financial decisions for them, then they need a financial power of attorney. If they want their partner to handle healthcare decisions for them, then they need to execute a healthcare power of attorney. If they want their partner to inherit everything if they pass on, then they need to draft a revocable living trust and set up their accounts appropriately.

It is a common misconception in the GLBT community that “if we were only allowed to marry then we wouldn’t need to make any of these plans.” The fact is that married couples also have a need to plan because the law does not even fully protect a spouse.

Let’s play a little “what if.” What if gay and lesbian couples were allowed to marry in North Carolina? What if Jane Doe and Janet Roe got married, had a son named John Doe, and then Jane became too ill to handle her own financial affairs? What if Jane passed on? What would happen to her spouse Janet? What would happen to their son John? What happens if Janet is unable to handle things for Jane (whether deceased or ill)? We’ll go through some scenarios under North Carolina state law to show just how much, or little, spouses have in terms of protection.

Custody Battle in Two States

In a subtle victory for GLBT parents, a Virginia appeals court overturned a ruling granting sole custody to the biological mother. Two women in a civil union in Vermont had settled the custody issue regarding their daughter which allowed liberal visitation rights by the non-biological mother. However, the biological mother then packed up and left for Virginia, taking the couple's daughter with her. Apparently, she hoped that a judge in Virginia would strip her former partner of visitation rights, and she was right. But the appeals court applied federal law under the Parental Kidnapping Prevention Act, and ruled that the lower court could not decide a matter that was still under Vermont's jurisdiction even though the biological mother and child were no longer in the state.

http://www.washblade.com/2006/12-8/news/national/national.cfm

The Parental Kidnapping Prevention Act is grounded in good policy. By having a federal law stating that state courts can not restart custody cases when they are already underway in another state, it prevents a parent from taking their child to another state because they didn't like the court outcome the first time. The big victory here is that Virginia recognized that it doesn't matter whether or not there was a marriage or biological parent at issue; only that Vermont determined their were visitation rights for the non-biological mother, and Virginia needs to respect that court decision even if it were not the same decision it would have made.

Opening the closet door with free speech

The ACLU won another victory for high school students trying to run a free press. Articles on sexual and gender orientation were to appear in the East High School newspaper in Kern County, California, but the principal forced the students to pull the articles vaguely citing threats against gay students in the school. When the principal could not produce any tangible information on the threats, and it was shown that the parents of the supposedly threatened students were not notified nor was the police officer assigned to the school informed of any such threats, the school district relented. A judge's signed consent decree is now expected to make sure that this does not happen again.

See story at http://www.aclu.org/freespeech/youth/27414prs20061116.html?s_src=RSS

It looks like the time-honored tradition of not addressing issues uncomfortable to parents by shutting up the students is starting to lose ground. When dealing with important issues such as gender identity and sexual orientation, open dialogue in a safe environment is not just desireable but neccesary. It is the responsibility of a civilized society to make sure that the dialogue is in fact open and the environment is safe, PARTICULARLY from those who want the world to bury its collective head in the sand because THEY feel uncomfortable with reality.

Thankfully, we have groups like the ACLU to keep pushing freedom forward, even when we are not particularly comfortable with the particular message or the people saying it. This time, I agree with the issue and people the ACLU is protecting. When the ACLU supports Nazis and others that spout hate speech, I may not like that the ACLU is standing up for them, but I understand it.

Non-biological mother gets the kids

A Pennsylvania court recently gave a quiet boon to the gay community in the form of a custody case. Patricia Jones and Ellen Boring Jones were partners starting in 1988, Ellen Jones gave birth to the couple's twin boys in 1996, and since the break-up of the partnership in 2001, custody of the children has been an issue. Last Tuesday, a Bucks County, PA court awarded custody of the children to Patricia Jones.

See story at http://www.washblade.com/thelatest/thelatest.cfm?blog_id=10299

It appears that the guiding star legal principle in custody matters has finally gained an edge over the presumption that a biological parent is favored over a non-biological parent, at least in Pennsylvania. One of the most interesting items is that the court took into account, and said so in its ruling, was that Ellen Jones was repeatedly trying to sabotage the relationship between the boys and Patricia Jones. In the past, partners have not had much standing in courts because the courts don't recognize the relationship. You might as well have said that the biological mother was poisoning the relationship between the children and the check-out clerk at Target.

South Africa gets gay marriage

South Africa now officially joins the growing number of countries that allow gay marriage. Effective yesterday, the Civil Union Bill allows both civil unions and marriage in South Africa for all couples.

See: http://www.news24.com/News24/South_Africa/News/0,9294,2-7-1442_2038124,00.html

and http://edition.cnn.com/2006/WORLD/africa/11/30/saf.gay.marriage.ap/

Until there is gay marriage in the U.S., partners can not feel protected unless they privately take life and estate planning measures to get exactly what they want. Even then, married couples are often stunned by the lack of rights they have in a marriage when it comes to inheritance. In the next few weeks, I'll have a podcast that highlights why gay marriage may be important, but planning will still be necessary if you truly want to protect each other.

The Christmas Card Will

As an attorney, seeing this kind of thing is frustrating because it can easily be avoided. Apparently, a Colorado man gave his partner a typed out and signed Christmas card saying that he wanted his partner and an aunt inherit everything when he dies and that the rest of his family was dead to him. The case has now been up to the court of appeals with the question "is this a valid will?" and is now going back down to be reconsidered at a lower court. (see http://www.gay.com/news/article.html?2006/10/20/1)

State laws are usually pretty clear on these things. In North Carolina, the Will must be printed out, signed by the person whose Will it is, witnessed by two people, and it should preferably be notarized (to avoid witnesses having to be contacted years or decades later.) The Will itself should also specifically say that it is a Will, and that is where there is a sticking point in the Colorado case. The Christmas card never really said that it was a Last Will and Testament...

Domestic partners are particularly at risk, and most know it. If you REALLY want to protect your partner, see an attorney who knows what they are doing in life and estate planning for domestic partners. The main reasons people, not just domestic partners, fail to hire an attorney to have their planning done is that they think it costs too much and that they can do it themselves. A complete, solid life and estate plan that avoids probate for both partners and still accomplishes everything you want will cost between $2,000 and $5,000 (that is if it is done right by someone skilled). Yes, that's a little expensive, but I can only imagine what the attorney fees are for running this Christmas card will up and down the Colorado court system. The other part of the problem is that when people write their own documents, they never know how badly they've messed up until it is too late to do anything about it. And once it is too late, your estate pays out A LOT more money to correct the mistakes.