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...
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.