Estate Planning after Obergefell

Estate Planning after Obergefell

Does the Supreme Court decision change your estate plan?


Overview

On June 26, 2015 the Supreme Court of the United States issued it’s landmark decision in Obergefell v. Hodges. The Court ruled 5-4 in favor of the petitioners, holding that the Due Process Clause of the 14th Amendment guarantees the right to marry as a fundamental liberty, and heterosexual couples and same-sex couples are equally entitled to that right. This ruling means that same-sex marriages must be recognized nationwide.


Case Background

Jim Obergefell & his longtime partner, John Arthur, sought enter into a legally recognized marriage in Ohio. Unfortunately Mr. Arthur was terminally ill with ALS, and the couple wanted to solemnize their relationship before Mr. Arthur’s death. They booked a private plane for Maryland, where same-sex marriages are recognized, where they were married on the tarmac at Baltimore International Airport. Shortly thereafter they returned to Ohio as a married couple.

When Mr. Arthur passed away, the State of Ohio issued a death certificate that did not identify Obergefell as the surviving spouse. Mr. Obergefell sued the State of Ohio (specifically naming Hodges, director of the Ohio Department of Health) to have himself named as Mr. Arthur’s surviving spouse. His case argued that Ohio state’s constitutional ban on same-sex marriage violates the equal protection clause of the 14th Amendment.


Issues resolved in the Obergefell opinion

First Issue:

Q: Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex?

A: The 14th Amendment requires states to issue marriage licenses to individuals of the same gender.

Second Issue:

Q: Does the Fourteenth Amendment require a state to recognize a marriage between two people of the same sex that was legally licensed and performed in another state?

A: The 14th Amendment requires states to formally recognize same-sex marriages of that state’s residents, when those residents entered into a same-sex marriage in another state where the marriage was legally valid.


Impact of Obergefell for same-sex married couples

State laws banning same-sex marriages are effectively invalidated. Same-sex couples can now enjoy all state tax benefits and other spousal benefits that heterosexual couples enjoy, including:

  • Adoption or child custody proceedings, even in states that previously did not recognize two persons of the same gender as a child’s parents;
  • Divorce proceedings, if necessary, now that states must recognize the validity of the marriage wherever solemnized;
  • Spousal identity or priority in the event will or trust proceedings are contested after death;
  • Spousal inheritance through intestacy (when a spouse dies without a valid will or trust);
  • Spousal priority in matters concerning an incapacitated spouse’s care, or recognition in the event guardianship or conservatorship proceedings are necessary;
  • Spousal survivorship rights for retirement benefits and state pension plans;
  • Spousal privilege in criminal proceedings where a spouse is a defendant. For example, spouses in a same-sex marriage can no longer be compelled to testify against one another;
  • Taxation benefits through the ability to file taxes jointly as a married couple.


Proactive Estate Planning for Same-Sex Couples

Same-sex couples should still engage in proactive estate planning. All couples, regardless of their chosen partner, should do the following:

  • Durable Powers of Attorney. To proactively express your wishes concerning medical care during periods of incapacity;
  • Estate Plans. To provide for family members other than a spouse or child;
  • Protective Trusts. For structuring the distribution of their property for the benefit of the surviving spouse and children after death;
  • Trusts. To preserve privacy, and to avoid the delay and expense of guardianship or probate proceedings during incapacity and after death;
  • Trust Administration. Providing clarity and discretion to the trustee to make strategic decisions after death (about taxes, investment powers, and accounting);
  • Trust Protector Provisions. Providing mechanisms that allow flexibility in administering those trusts to account for changes in the law, or changes in beneficiary circumstances after death;
  • Other Gifts. To make financial or real property gifts to religious or other charitable organizations.


Conslusion

Obergefell v. Hodges likely represents the final world on same-sex marriage, as it has elevated these relationships to equal status with other marriages. Despite this, the inherent protection of the laws for estate planning purposes is very limited for all couples. Families should take control of their estate planning and strive to leave as little as possible to state law interpretation. That is best accomplished through careful planning with experienced legal professionals who can guide you through the process.