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The Future of Same-Sex Marriage & Estate Planning

The movement towards legal recognition of same-sex marriage continues unabated. In December 2013, the New Mexico Supreme Court declared that “civil marriage” in that state must be open to couples of the same gender. A day later, a federal judge in Utah held the state’s definition of marriage as “one man-one woman” violated the United States Constitution.

In California, of course, state officials resumed recognizing same-sex marriages following the United States Supreme Court’s June 2013 decision in Hollingsworth v. Perry, a case that defeated an anti-same sex marriage amendment to the state’s constitution. The Supreme Court simultaneously held in a separate case that the Defense of Marriage Act-defining marriage as applying only to opposite-sex couples for purposes of federal law-was unconstitutional. That decision meant federal agencies could no longer deny recognition to same-sex marriages performed in a state where the practice was legal.

On the international front, the Parliament of the United Kingdom approved legislation in July 2013 permitting same-sex marriages in England and Wales, which will take effect in March 2014. (Scotland, which has a separate parliament, is presently considering same-sex marriage legislation for that country.) Similarly, New Zealand’s House of Representatives voted in April 2013 to alter the legal definition of marriage in that country to include same-sex couples. That law took effect this past August.

Estate Planning & Inconsistency in Marriage Laws

Same-sex marriage isn’t just a matter of civil rights. It’s an essential part of estate planning. Spouses are treated differently under federal and state laws governing probate and estates. At the federal level, for example, one spouse may leave the other an unlimited amount of property without being subject to estate and gift taxes. And in states like California and New Mexico that recognize community property, when one spouse dies the other may automatically take title to certain property without having to undergo a formal probate process.

It’s important to remember, however, that probate is mostly a state-level process in the United States. If you own property in more than one state (or country), you need to consider the state of marriage law in every locality that might have jurisdiction over your future probate estate. At the time of this writing, 32 states have not legalized same-sex marriage either through legislation or court rulings. And while, as noted above, many English-speaking countries have legalized same-sex marriage, some, such as Australia, have not. (In fact, Australia’s highest court recently rejected a local government’s attempts to legalize same-sex marriage, noting that the country’s constitution reserves that decision exclusively to the federal parliament.)

This discontinuity in the law only emphasizes the importance of careful estate planning. Consider a same-sex couple legally married in California who owns a second home in Virginia, a state where same-sex marriage remains illegal under the state constitution. A properly executed power of attorney or health care directive can ensure each partner may act for the other under Virginia law even if the marriage itself is not recognized.

Ultimately, same-sex couples face many of the same legal decisions as any other couple. Even in cases where a couple has no desire to legally marry, they should still work with an experienced California estate planning attorney who can advise them on the best way to secure their future interests. Contact the Law Office of Scott C. Soady in San Diego today if you have any questions.

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