Sunday, March 03, 2013
Estate Planning for Gay Familes, Part I: The 4 Essential Documents
Minnesota Lawyer Lists the Critical Documents Every Same-Sex Couple Must Have.
Under current Minnesota (and Federal) law, gay couples do not have any rights to such basic things as: 1) inheriting from each other; 2) making medical decisions for each other; 3) handling financial matters for each other; 4) naming a guardian for a minor child; or 5) continuing to live in the family home if only one partner is listed on the deed.
Will – A will tells who should inherit your property when you pass away, who you want your executor to be, and who will become guardians of any minor children. These issues are all especially important for unmarried individuals. In most states, an unmarried partner does not have inheritance rights, so any property owned by his or her deceased partner would go to other family members. Also, in the case of many gay and lesbian couples, the living partner is not necessarily the biological or adoptive parent of any minor children, which could lead to custody disputes in an already very difficult time. Therefore, it’s critical to nominate guardians for minor children.
Financial power of attorney – A power of attorney (for financial matters) dictates who is authorized to manage your financial affairs in the event you become incapacitated. Otherwise, it can be very difficult or impossible for the non-disabled partner to manage the disabled partner’s affairs without going through a lengthy guardianship or conservatorship proceeding.
Advance healthcare directive – A power of attorney for healthcare, informs caregivers as to who is responsible for making healthcare decisions for someone in the event that a person cannot make them for himself, such as in the event of a serious accident or a condition like dementia.
HIPAA Waiver - allows the persons named to discuss your care with a doctor BUT not to make decisions.
If you don't have these documents, your partner may be prohibited from keeping your assets, living in your home, paying your bills, or making your medical decisions.
Call now to protect your family!
Friday, December 28, 2012
Unique Estate Law: 2012 Wrap Up for a Nontraditional Law Firm
An Estate Planning Attorney Provides a Personal Review of 2012
The state of the firm
For Unique Estate Law 2012 was a fantastic year. The firm beat projections and I was able to assist more clients than ever before. I had referrals from a wide range of sources and a constant stream of clients coming through my website. I’ve done well enough to start advertising on a local radio station and in a local magazine. I have met many wonderful people and have given them guidance and peace of mind when facing an uncertain future.
Two major losses
But, for Chris Tymchuck, it was the worst year of my life.
Why was it such a bad year personally? In November both my Dad and Mom died within a week of each other. They were 66 and 64 respectively so it hadn’t occurred to the family that they might be gone so soon. While my father had battled cancer for 11 years he was in no worse shape in the end than in prior battles. And my Mom had never been sick a day in her life.
Why am I writing about this?
Why do I share such personal information on a law firm website? Because, it is a cautionary tale of what happens in a blended family when little or no preparation is done.
I was recently sharing my story with two clients and they said, “I can’t believe this is happening to you who spend your time making sure that people like us are ok and covered. You have to share your story with people so they understand that this can, and does, happen.” And they’re right.
I write this blog to assist clients and colleagues with things to consider when drafting estate plans for all types of families – both traditional and non-traditional – and the blog has paid off for me. I feel that, in keeping with the spirit in which I write I must use the lessons of 2012 to further education clients and colleagues through this medium. In short, to give back as the blog has given me so much.
Is it relevant to Unique Estate Law?
Why is my story relevant to this site? Because part of the reason that I specialize in non-traditional families is because I grew up in one – or several – and know the complications that come with being raised with in a complex web of interrelated (and sometimes not) people.
My parents divorced and each remarried and had kids with a subsequent spouse. In addition, my Mom remarried a third time and became a stepparent herself. So, that means I have a stepdad, stepmom, 3 half-brothers, a half-sister, a step brother and a step sister. That, of course, doesn’t include the “traditional” family members such as aunts, uncles and still-living grandparents. There are a lot of people to factor into planning, mourning and administering for someone.
I’ve spent the last couple of months grieving and assisting my family with working through the health care decisions, then memorials, estates and other issues associated with facing the illness and then death of parent. I plan to spend the next few posts discussing some of the lessons I’ve learned by being on the other side – education to practice so to speak – as my hope is to assist others to avoid some of the pitfalls we now face.
I can’t say that anything good has really come out of the losses I suffered this year but I will say that it confirmed my choice of profession. First, because I found relief in returning to work and assisting my clients and second because I feel that I use my law degree in the best possible way – to assist others to prepare for, and perhaps face, the worst times in their lives. For that I am grateful.
Monday, August 13, 2012
Estate Planning for Unmarried Couples
A Minneapolis Estate Planning Attorney Examines the Importance of Estate Planning for Unmarried Couples
Estate planning is important for everyone. We simply don’t know when something tragic could happen such as sudden death or an accident that could leave us incapacitated. With proper planning, families who are dealing with the unexpected experience fewer headaches and less expense associated with managing affairs after incapacity or administering an estate after death.
If a person fails to do any planning and becomes involved in a debilitating accident or passes away, each state has laws that govern who will inherit assets, become guardians of minor children, make medical decisions for an incapacitated person, dispose of a person’s remains, visit the person in the hospital, and more. In some states, the spouse and any children are given top priority for inheritance rights. In the case of incapacity, spouses are normally granted guardianship over incapacitated spouse, though this requires a lengthy and expensive guardianship proceeding.
In today’s world, increasing numbers of couples are choosing to spend their lives together but aren’t getting married, either because they aren’t allowed to under the laws of their state, such as in the case of gay and lesbian couples, or simply because they choose not to. However, most states don’t recognize unmarried partners as spouses. In order to be given legal rights that married couples receive automatically, unmarried couples need to do special planning in order to protect each other.
In general, unmarried individuals need three basic documents to ensure their rights are protected:
A Will – A will tells who should inherit your property when you pass away, who you want your executor to be, and who will become guardians of any minor children. These issues are all especially important for unmarried individuals. In most states, an unmarried partner does not have inheritance rights, so any property owned by his or her deceased partner would go to other family members. Also, in the case of many gay and lesbian couples, the living partner is not necessarily the biological or adoptive parent of any minor children, which could lead to custody disputes in an already very difficult time. Therefore, it’s critical to nominate guardians for minor children.
A power of attorney – A power of attorney (for financial matters) dictates who is authorized to manage your financial affairs in the event you become incapacitated. Otherwise, it can be very difficult or impossible for the non-disabled partner to manage the disabled partner’s affairs without going through a lengthy guardianship or conservatorship proceeding.
Advance healthcare directives – A power of attorney for healthcare, informs caregivers as to who is responsible for making healthcare decisions for someone in the event that a person cannot make them for himself, such as in the event of a serious accident or a condition like dementia. Another related document is a HIPAA waiver, which allows the persons named to discuss your care with a doctor BUT not to make decisions.
A fourth document to consider is the use of a revocable living trust. A trust document is nothing more than a set of instructions you leave to instruct your trustee on how, when and to whom to distribute your assets. There are numerous advantages to a trust that are especially appliable to unmarried couples:
It's private unlike a will at probate
You can determine where any remaining assets may go at your partner's death
Avoids court intervention if you're incapacitated
Beyond these documents, it is also critical that you check your beneficiary designations to ensure that the proceeds of your life insurance, retirement accounds, CDs, moneymarket or bank accounts go to your loved one. While your partner may still be able to inherit even without those designations, it will take time and effort to prove to a court that he/she is entitled to the benefits.
Estate planning is undoubtedly more important for unmarried couples than those who are married, since there aren’t built-in protections in the law to protect them and their loved ones. It’s imperative that unmarried couples establish proper planning to avoid undue hardship, expense and aggravation.
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.
Thursday, December 15, 2011
IRS to Gay Couples: Oops..Sorry About Denying You That Adoption Tax Credit
After my partner gave birth to our wonderful daughter 4 years ago, we immediately began working with a lawyer on the second-parent adoption process. A second-parent adoption is the legal procedure through which the non-birth parent (me) may adopt the child of the biological parent. During the process, our lawyer mentioned that there is a tax credit granted to adopting parents. The one-time tax credit allows adoptive parents to seek “reimbursement” for the money spent on the adoption expenses. Because we are both lawyers, we spent some time researching the adoption credit and decided that it was risky as the IRS sometimes refused the use of the tax credit by same-sex couples when applied toward a second-parent adoption. So, we declined claiming the credit on our return that year.
But, as is true of all things related to same-sex couples right now - things are about to change. The Government Accountability Office criticized the IRS for its failure to properly train staff members on how to handle tax credits and second-parent adoptions. This lead to the unthinkable – the IRS admitted it made a mistake in not giving its auditors proper guidance on this issue.
What was the IRS’s reasoning behind denying the credit? One explanation it gave was that the birth mother does not terminate her parental rights as part of the adoption procedure. While that may be true, it is also irrelevant. There is nothing in the federal tax code that prohibits claiming the adoption credit for adopting a domestic partner’s child.
The IRS did explain that when the taxpayers in question pushed back on the issue, the taxpayers usually won - after spending money and time fighting the IRS. Hopefully, after this, those couples may spend time and money on more importants things: like daycare, diapers and life insurance premiums (until the day when a same-sex couples are granted the same benefits (social security survivor benefits or estate tax free inheritance) as other married automatically get upon marriage.
Of course, this issue would be moot if the nonbiological parent was given the right to be on the birth certificate in the first place. But, that’s a continuing fight for our future rights. As for now, I have one question:
Do we get to amend our 2007 tax return to get this deduction?
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.
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.