Rainbow Legal Talk

Marriage Equality Fails in Maine

The State of Maine followed 30 other states in enacting marriage inequality through the ballot box. Reversing a victory earned only a few months ago when the legislature enacted marriage equality, 53% of the people voting in this “off-off-year” election decided to rescind that victory. The measure means that Maine now keeps alive the prior restrictions against marriage equality prohibiting same-gender couples from marrying. (http://www.msnbc.msn.com/id/33609492/ns/politics-more_politics/)

 

While marriage equality will continue to be a struggle in the years, and possibly decades, to come, if the vote proves anything at all it is that individuals and couples need to take control of their own rights and pro-actively plan. Many of the rights typically associated with marriage can be gained through the right kind of life and estate planning documents.

 

In fact, in Maine, a surviving spouse, whether same-gender or opposite gender,

 

• Does not inherit 100% of their spouse’s assets
• Does not have automatic access to their partner’s accounts during a time of crisis
• Can not combine their assets as joint with a right of survivorship without incurring federal gift taxes

 

However, all of these benefits that are typically (but wrongly) associated with marriage can be obtained through the right revocable living trust, a domestic partnership property agreement, powers of attorney, and other various documents. There is no waiting for a legislature to grant you rights. There is no need for a monumental court case to change the marriage laws. And there is certainly no need to wait for a public referendum to protect yourself and your partner.

 

If one thing is clear from the main referendum on marriage equality, reliance on marriage certificates for life and estate planning does not work, even if the referendum is successful.

 

For more information on legal documents available for domestic partners, please read The Gay Marriage Alternative by Jeffrey G. Marsocci, available at https://www.createspace.com/3380312 

DC to Make Gay Marriage Legal

It appears that we will have marriage equality in the heart of our federal government. The District of Columbia appears poisesd to enact legislation to allow same-sex marriages to be performed in the district, completing the move to equality it began months ago. The District of Columbia had previously enacted legislation to allow same-sex marriages from other states to be valid in DC but did not allow the marriages to be formed in the District.

http://www.365gay.com/news/same-sex-marriage-bill-in-dc-appears-unstoppable/

This is definitely a victory for marriage equality, but we must all wait to see what Congress does. After all, Congress has the option of overturning any legislation passed in the District. However, it is a good sign that Congress did not act previously when the District passed the legislation recognizing same-sex marriages performed outside DC.

Five Common Pitfalls in Domestic Partner Estate Planning, Part III

PITFALL 2: Using a Last Will and Testament to transfer property to your partner upon death

Unfortunately, the Last Will and Testament is still the most commonly used document for transferring assets from a deceased person to their chosen beneficiary. I say “unfortunately” because there are some major disadvantages to using a Will, the chief reason being that it subjects your assets to the probate process and all its drawbacks. Probate is the legal, court process of changing title from a deceased person’s name to their heirs or beneficiaries, and it typically involves a lot of inventories, exact accounting, and sometimes confusing legal hoops to jump through.

 

There are four major drawbacks to probate:

 

• High costs
• Delays
• Contestability
• Loss of Privacy

The first major problem with domestic partners subjecting their estates to probate is the cost involved. Depending on your state, the probate fees themselves may be high. These “fees” are the direct costs charged by a court to take your assets through probate. By far, the more common costs associated with probate are the legal fees attorneys charge to handle the paperwork. According to an AARP study, the national range of average costs lies between four and ten percent (4-10%) of the assets going through probate.

 

For an estate of even $500,000, that would average out to between $20,000 and $50,000 in costs just to get assets to your partner. And it is not at all necessary. As mentioned previously, using a joint revocable living trust with a separate property agreement can eliminate probate costs for all of the assets within the trust. And all of these benefits typically cost well under $5,000 (often under $3,500) for a complete set of life and estate planning documents.

 

The second problem with probate is the long delays in settling legal matters, and then transferring everything to the surviving partner. Depending on the state the partners reside in, delays are typically six months to a year and a half before the estate is closed. During that time, access to assets in the estate may be curtailed or even forbidden.

 

For a surviving partner, these delays can cost dearly. What if the surviving partner needed to access bank accounts to pay the mortgage? What if that mortgage could not be refinanced until probate proceedings were completed? What if the property is in the process of being sold, and the untimely death of the partner stopped the sale, needlessly cutting off vital funds for the survivor? Clearly, keeping assets from the bureaucracy and time delays of probate is desirable.

 

While joint property would certainly avoid probate for those particular accounts or assets, it comes with all of the drawbacks we mentioned in the first pitfall section. In addition, there are still some delays in transferring joint property from both partners to the surviving partner since a death certificate for the deceased partner plus possibly additional paperwork is needed to complete the transfer into the surviving partner’s name. Again, this is not significant in terms of cost and delays, particularly in comparison to probate, but with a revocable living trust the assets would already be titled in the name of the trust, and there would be zero delays in taking control as the surviving trustee.

 

Probate also opens possibilities of people stepping forward to contest the wishes of the partners. Because same-gender couples are far from universally accepted, there are decreased odds of the surviving partner receiving everything without a murmur of protest from at least someone. The odds of someone being unsatisfied with the partners’ estate planning arrangements moving to actually brining a court action increases exponentially with the size of the estate.

 

This third detriment to probate, even if unsuccessful, also adds to the delays in settling the estate and giving access to the partner. The estate not settling for a year or more is much more possible if there are court proceedings in a Will contest. Even more unjust, it is entirely possible, depending on the state the partners reside in, that a court may order the estate to pay for the attorney fees of both sides.

 

Finally, and most importantly for some partners, probate destroys the privacy of the partners. Depending on state law, because probate is a judicial matter, the proceedings are open to the public. In North Carolina, each bank account, account number, date of death balance, and who the account goes to is information available to the public. All property, values, and addresses are there for anyone to see. In addition, using a Last Will and Testament means that the Will itself is open to public inspection, so the world can see exactly what the surviving partner is getting.

 

While costs and delays are a substantial estate planning concerns for many partners, the complete loss of privacy tends to be the top detriment. In the years that I have been in my estate planning practice, domestic partners who were not convinced that they wanted a revocable living trust when they came to my office were often convinced when hearing that all of their plans would be open to public scrutiny

 

Using a Last Will and Testament may eventually get most of a deceased partner’s assets to the survivor, but there are severe drawbacks to the probate process. By far, using a revocable living trust is a more effective way for domestic partners to plan their estates.

Five Common Pitfalls in Domestic Partner Estate Planning, Part II

PITFALL 1) Using joint property to combine separate assets.

More than any other pitfall, this mistake can cost domestic partner couples thousands or even hundreds of thousands of dollars because of federal and state gift taxes. As mentioned previously, each person is only allowed to give another person up to $13,000 in any given year without any federal gift taxes. After that, the IRS imposes a gift tax on the giver of the money. So if Partner A gives Partner B $20,000 in cash, $7,000 is subject to federal gift taxes. The same thing is true when domestic partners take all of their individual property and assets and “put each other’s name” on the title. The effect is that half of the fair market value of all of both partner’s assets that exceed $13,000 is considered a gift to the other partner.

 

I can already hear some accountants and tax attorneys screaming “That’s not true! How dare you deceive these nice people who read your blog!” Well, it is true that you do not have to actually pay any federal taxes, but the $7,000 is subject to gift taxes… it is just that Uncle Sam has graciously given you an additional lifetime bank of $1,000,000 to draw against before, as the giver, you have to take money out of your pocket when you give a gift. That’s the good news. The bad news is that every dollar you draw against is decreasing the amount you are allowed to give away upon death without estate taxes. The current federal exemption is $3,500,000, and in 2011 drops to $1,000,000.

 

Confused yet? Here’s an example that illustrates both the gift tax and estate tax problem of using joint property:

 

Carlos and Dave are committed domestic partners, and, based on the advice they got from their cable guy Larry, decide to put all of their assets into joint tenancy. This means that all of Carlos’ previously separate accounts now have Dave listed as an owner and vice versa. Carlos has only a house worth $500,000 and Dave has a mutual fund worth $500,000. After they put each other’s name on the title to the house and the mutual fund, they decide to talk to their accountant.

 

The accountant gave them the bad news that Carlos actually gave a gift of $250,000 to Dave, the first $13,000 of which is exempt, leaving a taxable gift of $237,000 from Carlos to Dave. Assuming Carlos started with the whole $1,000,000 in lifetime gift tax credits, we subtract the $237,000 from the $1,000,000 leaving $763,000 that can be gifted in the future (beyond the $13,000 annual exclusion), and only $3,263,000 that can passed from Carlos to Dave, or anyone else for that matter, without estate taxes. The same is now also true of the gifts given from Dave to Carlos.

 

For many people, that may not sound so terrible, but imagine if Dave and Carlos did not go to their accountant and fill out the proper gift tax forms. That’s when you usually hear two of the IRS’ favorite words—“interest” and “penalties.” There is also a huge potential state gift tax problem, depending on the state you reside in. For example, in North Carolina this would have actually resulted in an immediate tax of $26,710 due from Carlos and the same from Dave. A total of $53,420 in taxes would have to be paid, out of pocket and right away, as a result of retitling these two accounts. (I wonder if the cable guy Larry has legal malpractice insurance?)

All of this came about because Carlos and Dave wanted to combine their property as one family unit, something previously discussed as being a top goal of many committed domestic partner couples. While it simply does not sound “right” to a lot of people since they believe they should be able to give their property to anyone they choose without being taxed, I can assure you that this tax is very real. And, no, this tax does not affect married couples at all because they have something called the “unlimited marital deduction,” which allows unlimited gifts and unlimited inheritance without taxes for U.S. Citizen spouses.

 

“That’s not fair!” you may now be shouting. “That’s discrimination!” And you’re right. But there is a solution that allows the combination of assets without incurring any of the gift taxes. The solution is a joint revocable living trust with a domestic partnership property agreement.

 

To keep things brief, a revocable living trust is a document set up during a person’s life that allows them to retitle their property into the name of the trust and still remain in control of everything because they are the trustee. For a couple, they create a joint trust where both of them are trustees, and now both Carlos and Dave could access and control all of their assets and accounts. In addition, the domestic partnership property agreement lists that although the house and the mutual fund are in the name of the jointly owned and controlled trust, the house is still technically owned separately by Carlos and the mutual fund is still technically owned separately by Dave.

 

Again, the revocable living trust is a major topic in the book Estate Planning for Domestic Partners and it is well worth reading, especially if you and your partner are considering having one. In addition, we will discuss some of the other, non-gift tax benefits of a revocable living trust in the second pitfall. However, if you are already convinced that a revocable living trust with a domestic partnership property agreement is for you, then I strongly suggest that you seek out an attorney who is experienced in helping domestic partner couples draft these kinds of trusts. We will also discuss what an experienced attorney is in Pitfall Five. For a list of attorneys with advanced training, please go to the website www.NIDPestateplanning.com for a listing of members of The National Institute for Domestic Partner Estate Planning.

Five Common Pitfalls in Domestic Partner Estate Planning

In estate planning, domestic partners already have the cards stacked against them compared to married couples, but some of the most commonly-held beliefs about estate planning are actually adding to the problems. Like using milk to calm heartburn, there may be some perceived relief, but the acidic properties of milk will eventually magnify the pain and make things worse. So too some of the “easy” solutions making the rounds in the LGBT and domestic partner communities can actually make things worse.

 

Before addressing the five pitfalls in detail, it is important to note that there are typical domestic partner estate planning goals and appropriate ways to reach those goals. It is usually the misapplied use of certain tools to reach those goals that get people into trouble. And because we are dealing with life and estate planning issues designed to prevent problems, it is often years later after a death or after a problem occurs that we realize things were not done the right way.

 

Typical Domestic Partner Life and Estate Planning Goals

The three main domestic partner estate planning goals are:

• Combine all of the couple’s assets so they become the assets of one family unit
• Empower both partners to make medical and financial decisions for the other in case of an emergency
• Make sure that after one partner passes on that the surviving partner is cared for during their lifetime, and thereafter that the funds provide for friends, family members and/or charities

Often the goals of domestic partners are related to attaining the same rights married couples have and take for granted. For example, domestic partners believe a husband and wife can legally make healthcare and financial decisions for the other. Domestic partners believe a husband and wife will automatically inherit everything from each other. And domestic partners believe a husband and wife can combine all of their property so they own everything together.

 

The fact is these are only partially true when a couple marries. Married couples who have been around for a while will tell you, “try to refinance a mortgage and sign your spouse’s name.” Attorneys will tell you that without estate planning documents, a wife may or may not inherit everything from her husband depending on state law. (In my own home state of North Carolina, spouses do not automatically inherit everything from each other.) Nonetheless, these are the perceived benefits of marriage that domestic partners want to duplicate.

 

Combining property as one family unit: Domestic partners are not allowed to marry in most states, and in trying to protect each other and more firmly become one family unit they want to bring everything under one roof. Partners often want to confirm their relationship by making “what is mine is yours, and what is yours is mine.”

 

However, there is one huge bump in the road in the form of gift taxes. This tax is not widely known in the general public but is a constant irritant in the estate and tax planning communities. In short, the federal gift tax prevents people from giving more than $12,000 in any given year to an individual. While you can give away $12,000 gifts to many different individuals, anything more than $12,000 to the same person triggers the federal tax. This becomes a huge problem when partners want to combine everything since, unless it is done correctly, the IRS would probably state that each of you gave a gift of one-half of your assets to the other.

 

While the federal tax is a concern, there are also state gifts tax implications which need to be taken into consideration. We will go a little more deeply into how the gift tax is a pitfall below, but for more information and examples on the gift tax and how it operates in domestic partner planning, please read The Gay Marriage Alternative (Available at www.gaymarriagealternative.com).

 

Empowering both partners to make medical and financial decisions for the other. One of the biggest life planning concerns is making sure that both partners are empowered to make medical and financial decisions for the other if one partner becomes ill. The LGBT community has hundreds of stories of partners who were together for decades being locked out of the hospital room by family members, even though the family members may have been absent from their lives for years.

 

This is an all too common occurrence which is easily handled by properly drafted and legally executed healthcare powers of attorney. In addition, a properly drafted and legally executed financial power of attorney can make sure that all of the sick partner’s financial concerns are handled by their partner and not the “next of kin.” Emphasis on “properly drafted” and “legally executed.” However this is not always done, and there are far too many instances in the LGBT community where these documents were not accepted. This is not necessarily because the hospital or bank did not want to accept the power of attorney documents but because when partners tried to do it themselves or used an inexperienced attorney and the documents were defective.

 

Inheritance of assets for partner and then other chosen beneficiaries. As with any committed couple, domestic partner couples usually wish to ensure that their assets go first to their partner, or at the least they are available for their partner during their lifetime. After that, they wish for their assets to go to other beneficiaries of their own choosing rather than automatically going to other family members. In a case where the partners have children together, the beneficiaries are often the children. In other cases, the partners may wish to have certain assets go half to friends or family members on one side and half to the other. Regardless of the wishes, they need to be in writing.

 

However, the method of transferring assets may end up with significant, unintended problems, particularly if a Last Will and Testament is used rather than a revocable living trust. With a Will, there is guaranteed probate of the deceased partner’s assets which translates into loss of privacy, higher expenses in terms of money and/or time, a higher risk of the plans being contested, and longer delays in the partner having unrestricted access to the partner’s assets. In large part, the book Estate Planning for Domestic Partners reveals these problems. We will also delve into this subject below in the discussion on pitfalls. Another excellent resource on revocable living trusts, for domestic partners and married couples alike, is The Living Trust by Henry W. Abts III.

 

The Five Pitfalls in Domestic Partner Estate Planning

While more appropriately titled the five “main” pitfalls in domestic partner “life” and estate planning, these five major traps comprise the most common and costly mistakes that domestic partners fall into. By far, the greatest reason people fall into these traps is because a non-attorney friend or co-worker gave them legal advice. Or if they sought the advice of an attorney, the attorney either did not have the right experience or they were the wrong kind of attorney. (For more advice on choosing the right attorney, please visit the website for The National Institute for Domestic Partner Estate Planning at www.NIDPestateplanning.com).

 

The five biggest pitfalls are:

• Using joint property to combine separate assets
• Using a Last Will and Testament to transfer property to your partner upon death
• Using a limited liability corporations as a substitute for estate planning documents
• Do-it-yourself computer programs and forms
• Hiring an inexperienced attorney or the wrong kind of attorney

 Next, we will examine the pitfalls one at a time.

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.