Modern Estate Planning Blog

In a landmark 5-4 decision, the Supreme Court paved the way on Tuesday for marriage equality by overturning section 3 of the Defense of Marriage Act (DOMA) which defines marriage between a man and a woman on the federal level.

Likewise, the Court chose to “decline” to uphold California’s Proposition 8, which means that Judge Vaughn Walker’s 2010 decision permitting same sex marriage in the state of California will stand. The issuance of marriage licenses is anticipated to resume in as little as 30-60 days.

While these are two huge victories for same-sex couples in California, full marriage equality in the United States has not been achieved by either or these rulings. There are still many legal concerns that face same sex couples in California, and across the nation.

For starters, despite praises that “DOMA is Dead,” only section 3 of the legislation was declared unconstitutional. Section 2, which leaves the decision of legalizing same-sex marriage to the states, still stands.

For California residents, this essentially means that a marriage now recognized in our state may still not be recognized in others. Currently 37 states do not allow same-sex marriage, although some of those do have provisions similar to domestic partnerships.

If a gay person is traveling and require hospitalizations in one of these states, your partner may still be legally barred from entering your hospital room or making medical decisions for you.

Or, if you own property in one of these states (as many snowbirds and investors do), your assets will be subject to those state laws if something happens to you. It’s interesting to note that the DOMA ruling was brought about by a widow who had to pay $363,053 more in federal estate taxes following her partners death because their marital status was not recognized by the federal government. The same issues would exist if you owe taxes in another state. Succession rules may also block your same-sex spouse from inheriting your property in the absence of a solid estate plan.

So while the fight for marriage equality has achieved monumental gains this week, until gay marriage is legalized in all 50 states, gay couples must still take extra legal precautions to protect themselves and their partners if the unthinkable happens.

Having a power of attorney and health care directive (…and keeping them ‘refreshed’ or updated each year!) is the best way to avoid interference when making medical or financial decisions for a same-sex partner if an unexpected emergency happens while out of state.

Wills and trusts also continue to be the best way to ensure your wishes are honored and your partner inherits what he or she is legally entitled to in the event of your death or incapacity. While this is true for ALL individuals and married couples (regardless of sexual preference), same-sex couples will still need extra protection in this area.

Finally, one lingering issue exists surrounding domestic partnerships within the state. Will existing domestic partnerships continue? Will they somehow be converted to marriages with a way to “opt-out”? Can couples continue to enter into new domestic partnership? The answer to these questions are not fully known, but we expect answers to materialize as new procedures for same-sex marriage in California start rolling out again in near future.

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