Monday, August 06, 2012
Gay Marriage and Inheritance Rights, Part 4: Discussion of Probate Court Ruling That Gay Spouse May Inherit
This series of posts examines the unique case brought before the Hennepin County Probate Court in which a same sex spouse sought inheritance rights over $250,000 worth of assets from his deceased spouse's estate. Recall that Mr. Morrison and Mr. Proehl were legally married during the brief window in California and later returned to Minnesota - a state that has a statue prohibiting the recognition of same-sex marriage - where Mr. Proehl died suddenly of a heart attack. In question were approximately $250,000 worth of life insurance proceeds and in a solo bank account in which Mr. Morrison was not named a beneficiary.
After unsuccessfully fighting to have the insurance company and bank issue the money to him, Mr. Morrison filed suit in Hennepin County Probate Court arguing that he was entitled to Mr. Proehl's estate because they were legally married in California. In a unique - and surprising - decision, the court agreed and ordered the $250,000 paid to Mr. Morrison.
As noted in my prior post, I am thrilled with this outcome for Mr. Morrison but caution that it may also cause some unintended consequences. A few issues that come to mind.
What if you break up?
I know many couples who traveled to a state (Iowa, Massachusetts or New York) or country (Canada) to get married in a jurisdiction in which same-sex marriage is legal and some of those couples are no longer together. But, because the marriage is not valid in Minnesota and due to the residency requirements (of 6 months or more) in most states, the couples never divorced. What happens if one member of that “broken relationship” dies? Will the “ex”, but still-legal-spouse-in-another-state, be able to inherit from the deceased?
Do you have to be "same-sex married" in a jurisdiction where it's legal?
Another question: Would this only work for couples who got legally married in another state? My partner and I have been together for almost 7 years and we have a 5-year-old daughter together. and are registered domestic partners in Minneapolis. If my partner dies without a will, am I currently entitled to the same inheritance rights as Mr. Morrison or do we need to travel to Iowa (actually, I would choose New York) to get married so it’s legal somewhere? And what if we go to Illinois and get a civil union? Does that count?
Will gay couples rely on this decision?
As an estate planning attorney in Minnesota - a state increasingly restrictive of the right of gay couples to marry - I worry that potential clients will hear about this and interpret it to mean that they don't need to properly plan for an emergency. I want to be sure to point out that the judge in this case clearly stated that this was "unlike any that has come before Minnesota's probate court." When I hear that language, I think that it's a "one-off" decisions and may not be repeated. Further, this is not a binding case as it's only at the district court level. Another thing to note is that Mr. Morrison did still have to spend time and money in court fighting for what should have - easily - been his. If Mr. Proehl had named Mr. Morrison as a beneficiary OR in a valid will, those $250,000 worth of assets would have been in Mr. Morrison's hands within a couple of months without legal intervention. Please don't rely on a court to save you, but call my firm and get a plan in place now! If you mention this blog post, I will waive my initial consultation fee because it's that important to me to help this community (and so I know someone reads this).
What if other heirs dispute the partner/spouse's inheritance rights?
What if other family members object to the surviving partner/spouse's inheritance? It doesn't appear there will be any opposition to the Proehl decision as it was clear that Mr. Proehl's surviving family members all believed that Mr. Morrision was his husband and therefore entitled to the proceeds. But, will the outcome be the same if someone is there to dispute it?
While the decision does raise further questions (as complex legal questions often do), let me be clear that I am thrilled for the LGBT community and applaud Referee Borer and Judge Quam for what is clearly the right choice in this situation.
Thursday, August 02, 2012
BREAKING: Gay Marriage and Inheritance Rights, Part 3: Court Rules That Gay Spouse CAN Inherit!
A Minneapolis Lawyer Discusses the Recent Hennepin County Probate Decision on Inheritance Rights for Same Sex Couples
As a lawyer who specializes in the field of non-traditional families, I have to admit that this is an outcome that I would never have predicted.
Two of my prior posts discussed the inheritance issue facing James Morrison of Hennepin County, Minnesota. Briefly, Mr. Morrison legally married Thomas Proehl in California during the brief window in which same sex marriage was permitted in that state. Upon their return to Minnesota Mr. Proehl died of a heart attack and Mr. Morrison subsequently learned that there was $250,000 in life insurance benefits and in a solo bank account for which Mr. Proehl had not named a beneficiary. Further, Mr. Proehl did not have a will specifying where his estate should go in the event of his death.
After failing to make his case with the insurance and retirement companies, Mr. Morrison argued to the Hennepin County Probate Court that, because they were legally married in California, he was entitled to inherit the $250,000 from Mr. Proehl's estate. In a surprising ruling yesterday, the Hennepin County Probate judge agreed and granted Mr. Morrison the right to inherit the $250,000.
Referee George Borer held that Minnesota’s Defense of Marriage Act (MN DOMA) does not deny a same-sex partner the right to inherit the other’s assets. His opinion noted that the MN DOMA bill as initially drafted included language prohibiting “the benefits of marriage” to same-sex couples but that language was removed prior to passage into law. Referee Borer stated that the removal of “benefits of marriage” language appeared to be an “intentional legislative compromise that allowed the passage of this bill.” Hennepin County Probate Judge Jay Quam signed off on the referee’s order stating that the Legislature’s rejection of the “benefits” language was not accidental and acknowledged that this case was “unlike any that has come before Minnesota’s probate court.”
The judge also noted that what made Mr. Proehl and Mr. Morrison different was “that they were a married, same-sex couple in a state where that status is legally unwelcome.”
This is a great outcome for Mr. Morrison and I hope he can put this all behind him now as I must have been emotionally wrenching to have this drag on for so long.
I certainly feel this is the right decision for this couple, but I fear it may lead to some unintended consequences. I will discuss these possible issues in the next post in this series.
Tuesday, July 24, 2012
Gay Marriage and Inheritance Rights in Minnesota, Part 2
A Minnesota Estate Planning Lawyer Discusses Issues Related to Estate Planning a Probate for Unmarried Couples
My prior post discussed the facts of the unique case of Thomas Proehl and James Morrison, a male couple who legally married California before returning to Minnesota. Mr. Proehl died suddenly of a heart attack leaving a combined $250,000 in an insurance policy without a named beneficiary and a solo bank account. So, what's the problem? Well, who is entitled to receive that $250,000 in assets?
If there is no beneficiary stated on a life insurance policy (or retirement account) the institution holding the policy (or funds) will turn to the local probate court for help. Institutions do not want to make these decisions so will hold the funds until a court tells them how to pay them out. So, how does a court know what to do with these funds? There are two ways: 1) check to see if the decedent left instructions (i.e. a will); and 2) look to the state law.
Is there a will?
The first step in the determining how to pay out Mr. Proehl's $250,000 was to see if he had a will. As noted in prior posts, a will is set of instructions on how, and to whom, a decedent wants his/her probatable assets paid out. If Mr. Proehl had drafted a legal will stating that all of his assets were to be paid to Mr. Morrison, a court would have ordered the insurance company and the University of Minnesota to immediately cut a check to Mr. Morrison. Unfortunately, Mr. Proehl did not have a will so the court must now look to the second method of determining how to pay probatable assets.
What Does State Law Say?
If there is no will, the decedent is said to have died "intestate" (literally meaning "not testate"). For someone who died without a will, the probate court will turn to state law to guide it in determining how to pay assets. In Minnesota, the state statute governing the payment of assets where there was no will is known as the law of intestate succession. These statutes provide the court with very clear instruction on the "order of descent" (e.g. priority list) for any assets passing through probate. At the simple level (the point of this post is not provide a lengthy explanation of intestacy succession) assets passing through intestacy are paid in the following order:
To a legal spouse; then
Any legal child(ren); then
To descendant of parent (i.e. sibling); and then
To any living grandparent(s).
If there are more than one in any group (class) then the assets will be divided equally "at that level."
So, first up is the legal spouse and here we immediately have an issue. Mr. Proehl and Mr. Morrison were legally married in California so shouldn't those assets go to Mr. Morrison as the surviving spouse? That is exactly the issue Mr. Morrison brought before the Hennepin County Probate Court last month in which he filed a petition asking to be named hair of Mr. Proehl’s estate. We will see how this comes out but it has cost Mr. Morrison dearly in time and effort to fight for what is, indisputably to those who matter, his.
The good news is that you can prevent this from happening to you! Check your beneficiary designations and get a will now! Work with an attorney who understands the unique challenges facing couples in nontraditional estate planning.
Thursday, June 07, 2012
Gay Marriage and Inheritance Rights in Minnesota, Part I
Twin Cities Estate Planning Attorney Discusses Inheritance for Unmarried Couples
UPDATE: August 2, 2012 - Then Hennepin County Probate Court has ruled that Mr. Morrison can inherit as the legal spouse of Mr. Proehl. See the full story here.
A Hennepin County Probate Court is set to rule on the issue of whether gay couples who are legally married in another state but reside, and die, in Minnesota may inherit from their same-sex spouse. Because this is such a major case for my numerous unmarried clients, I will be drafting several blog posts on why it matters. This first post deals mainly with the facts of the case.
Thomas Proehl and James Morrison, together for over 25 years, were legally married while living in California. Upon deciding to return to Minnesota, they sold their California home and bought a new house here. They jointly owned the Minnesota home and had a joint checking account to pay bills. Unfortunately, the couple did not plan for the worst happening - and it did.
Sadly Mr. Proehl died of a heart attack at the age of 46 in 2011. In settling Mr. Proehl's estate, Mr. Morrison learned that the $100,000 profit they received from the California home sale was put into an individual investment account solely in Mr. Proehl's name. Further, Mr. Proehl had a life insurance policy through his job at the U but mistakenly forgot to name Mr. Morrison as the beneficiary of the policy.
Between the investment account and the insurance policy, there was $250,000 that had to go through probate to determine to whom it should be given. As you may recall from prior posts, the Probate Court will look to a decedent's will to determine how to distribute these assets. So, who gets the $250,000? The legal battle that ensued over this will be covered in the next post...
Thursday, May 31, 2012
BREAKING: Defense of Marriage Act Held Unconsitutional by First Circuit Court of Appeals
A unanimous panel of the U.S. Court of Appeals for the First Circuit held today that the Defense of Marriage Act, which denies federal economic and other benefits for married people from same-sex couples married in states where it is legal, could not be justified. The opinion did not address the issue of whether other states may be forced to recognize same-sex marriages performed in states where they are legal. And the judges said the case did not call upon them to address whether there is a constitutional right to marriage that must be available to gay couples.
You may recall that the case, Gill v. Office of Personnel Management, was brought by seven same-sex couples married in Massachusetts and three surviving spouses of such marriages who were denied federal benefits and recognition.
The court opinion stated:
One virtue of federalism is that it permits this diversity of governance based on local choice, but this applies as well to the states that have chosen to legalize same-sex marriage,” Boudin wrote. “Under current Supreme Court authority, Congress’ denial of federal benefits to same-sex couples lawfully married in Massachusetts has not been adequately supported by any permissible federal interest.
An interesting side note is that the 3-judge panel is made up of 1 judge appointed by President Clinton and TWO appointed by Republican presidents (Bush and Reagan). Further, the opinion was written by Judge Boudin who was appointed by former President George H.W. Bush.
It is important to note that while the court held that DOMA is unconstitutional, the panel also stayed the mandate until such time as the Supreme Court could rule on the issue. With several cases now working their way through the federal court system, it may only be a matter of time before the Supreme Court is forced the take a position on the issue.
Tuesday, October 18, 2011
Gay Couples, Health Care Benefits and Taxes
As you know, gay couples do not have access to many of the benefits that come with legalized marriage. Because of the Defense of Marriage Act (DOMA) the federal government does not recognize gay marriages - even for those who are married in states in which it is legal. As a result, the federal tax code does not recognize same-sex unions.
So, the Tax Code treats the value of employer-provided healthcare benefits for a civil union or domestic partner as ‘imputed income’ to the employee. This means that employees who elect domestic partner benefits must pay income tax on the value of those benefits. So, while many companies offer health insurance coverage for same sex partners, the employees who take advantage of that benefit - just as their straight colleagues do - pay more for it.
But a growing number of companies are attempting to combat this injustice by covering the extra costs that same-sex couples pay for these health benefits through what's known as a "tax gross-up." There term tax gross-ups refers to the practice of employers making employees whole for additional taxes owed, thereby ensuring that employees receive the true dollar amount promised to them as compensation.
Companies such as Google, Bank of America, Barclays, Cisco, Discovery Channel and the Klimpton Hotel chain have already agreed to reimburse U.S. employees whose health benefit for same-sex partners or spouses are treated as taxable income by the IRS. And yesterday, Morgan Stanley announced that it will begin reimbursing employees for the extra taxes they pay on health insurance for their same-sex partners starting January 1, 2012.
Does your company offer a gross up? Check with your HR department today to be sure that you don't miss out on benefits that may be available to you. And if they don't offer a gross up - ask them why.
Please note that the Bucks blog at the New York Times keeps an updated list of the companies that offer a tax gross up.
Tuesday, September 06, 2011
Update: California’s High Court Hears Prop 8 Arguments Today!
Today is the day that the California Supreme Court hears arguments on whether or not Proposition 8 backers are entitled to appeal the Federal ruling that overturned the 2008 “Proposition 8″ ban on gay marriage.
In the words of the LA Times:
The court’s ruling, due 90 days after argument, will determine whether all initiative sponsors in California are legally entitled to defend their measures in state court when the governor and the attorney general refuse.
If the court rules against the initiative backers, then a federal appeals court is more likely to rule that ProtectMarriage.com, the sponsor of Proposition 8, also lacks standing under federal law and “Proposition 8 dies because no one will defend it,” said Vikram Amar, UC Davis constitutional law professor.
This is a very tricky case for gay marriage supporters in California, and the entire US, truthfully. The outcomes of this case could lead to an eventual Supreme Court ruling. In different times, perhaps, that might be a good thing. The Supreme Court was a strong advocate for the Civil Rights movement during the late 1950′s and 1960′s. That Court and its progressive, sympathetic members no longer exist today. Today’s Court swings conservative, and it is very possible that taking an initiative to the US Supreme Court could result in a loss of potential marriage rights instead of making any permanent gains towards equal rights.
Stay tuned for more developments.
Monday, August 29, 2011
Judge Will Consider Motions to Unseal the Prop 8 Tapes Today
Gay marriage is obviously a hot topic for me, not only because of how it affects unique families and non-traditional families, but also because of the legal implications to lawyers who practice estate and family law. With “traditional”, aka “Federally supported”, marriages my job takes less time and due diligence to ensure that the families are protected when a loved one dies or is incapacitated.
Gay marriage at the state level actually makes things trickier because it is not Federally-recognized. In those states where gay marriage is legal, separate tax records must be kept and the same amount of paperwork is filed for estate planning because of how the IRS views same-sex and unique couples as it would be if there were no gay marriage in that state at all. Still, from a purely social perspective and no thoughts to probate laws, wills, succession planning, etc. I am highly interested in how cases like this will play out.
The American Foundation for Equal Rights has made a motion to have the the video proceedings of the Proposition 8 Trial made public. This is a PR move on the part of the American Foundation for Equal Rights because they believe that were the American public to see the arguments made against gay marriage, see the “ugliness” in some of the dialog that they would understand how divisive it can be to vote on someone else’s essential rights. I would hope that something like this could change hearts and minds, but I’m cynical. I’ll wait and see.
I will say, however, that I am glad to see that there is a momentum to the movement and that people are continuing to push hard for equal rights.
Until the day that we have a full-recognized legal marriages for gay and lesbian families, I will keep doing what I do every day to protect the rights of gay and lesbian families, single parent families, and other non-traditional families who are overlooked by current laws.
Monday, August 22, 2011
Follow Up: Colorado Judge Halts Deportation
Last week I posted on an ongoing deportation case involving Mexican national Sujey Pando, the legally married wife of Violeta Pando. I brought attention to it as a way of explaining the differences that arise when someone is married in a state’s eyes only versus having the Federal protections of marriage. Recent developments in this case are both heartening and at the same time still remarkably insufficient.
The judge in this case, Judge Mimi Tsankov, halted the deportation using her authority to “set aside” the original purpose of the hearing (deportation proceedings) in order to consider the procedural posture of the case. In the end the judge cited the recent statements by the Obama administration on “prosecutorial discretion” as reason to halt the proceedings until more definitive instruction could be utilized.
Many people–most importantly the Pandos– were excited by this recent development and choose to see it as evidence of growing acceptance of gay and lesbian families. I do, too, but I also see it as still being too uncertain and ad hoc for my liking. Yes, I know I am a glass is half-empty kind of attorney. Repeal of DOMA is needed to help support unique and non-traditional families or else cases such as these will continue to go before the courts creating a confusing patchwork of quasi-marriage rights.
Gay and lesbian families are still forced to do “double duty” in protecting their families. They must still tackle additional estate planning hurdles and seek other legal protections to keep their families intact. You need an attorney that understands the unique aspects of "gay estate planning." Contact Unique Estate Law now to protect your family.
Tuesday, August 16, 2011
Another Deportation, Another Reason for Unique Families to Stay Cautious
I don’t usually cover purely political stories on my Unique Estate Law blog, but stories like these are hitting the news far too often to ignore. Today, I’d like to blog about gay marriage and immigration.
In four days, Violeta and Sujey Pando will see their Iowa marriage disintegrate as Sujey is deported by US immigration officials back to Mexico. Even though they were married in a state that considers gay marriage legal because of DOMA, a federal marriage act, their marriage does not carry any weight at a national/international level. Had this been a straight couple, as opposed to a unique family, Sujey would still continue to live in the United States as a married, permanent resident. There have been other cases much like theirs, (one even successfully stalled!!) wherein married couples are asked to separate by US immigration because their marriage was recognized at a state level only. Stop the Deportations covers these cases very thoroughly, in case you desire more information or want to make a donation to their case.
When I first came out, so to speak, against state marriage, I had a lot of people tell me that I should lighten up and not think like a lawyer (even from other lawyers). However, when I read the news it’s very hard to be all that excited about it. The potential loss of domestic partnership benefits, the Byzantine tax laws that will have to be navigated, the fact that I still would have to establish all of the same unique family/non-traditional family documents for business succession planning, estate rollover, and potentially (if married to a foreign national) lose my wife to immigration laws doesn’t exactly make state marriage feel like a real marriage to me.
As long as DOMA is in effect, unique families face will continue to have “second class” marriages even if those marriages are recognized by the states. I urge anyone who cares about this issue to push for a repeal of DOMA and I also urge gay, or any other so-called nontraditional, families to take precautionary, legal, financial measure to protect their partners and family regardless of whether their marriage is recognized by the state they reside in.
Thursday, August 11, 2011
What Does Gay Marriage Mean for Domestic Partnership Benefits?
I had intended to complete the second half of my business succession planning series when I happened to read an interesting article about what state by state recognition of gay marriage will mean to domestic partnership benefits. As you know, I’ve never been entirely thrilled with state-only recognition of gay marriage because I feel that it creates a mess of legal problems for unique families like my own. Because there are no Federal laws that support gay marriage, gay and lesbian families must continue to file taxes separately regardless of whether or not they live in a state that recognizes gay marriage, gay and lesbian couples continue to be denied many of the federal tax incentives present for straight married couples in everything from insurance, business and estate planning. Now, while gay and lesbian families who enough live in “gay marriage states” may see their domestic partnership benefits dry up unless they chose to become married in their state.
I don’t want to always be the voice of Doom, but it is possible that we could see companies slowly withdraw domestic partnership benefits across the board in anticipation of state recognition. Hopefully, this will not happen, but at a time when businesses are struggling to stay afloat you cannot always expect them to choose an ethical approach over one that saves them money.
State-by-state gay marriage amendments certainly boost morale and have the power to create a social awakening, but unfortunately they do very little to provide financial and legal equality for gay and lesbian families.
From within Hennepin County Unique Estate Law represents estate planning and elder law clients throughout Minnesota, including Minneapolis, Edina, Bloomington, St. Louis Park, Minnetonka, Plymouth, Wayzata, Maple Grove, St. Paul, and Brooklyn Park. The Minnesota law firm of Unique Estate Law focuses on all aspects of estate planning, including specialized wills, trusts, powers of attorney and medical directives for married couples, young families, blended families, single parents, gay families and those going through a divorce. Unique Estate Law also handles probate administration, asset protection, Medical Assistance planning, elder law, business succession planning, adoptions and cabin planning.