KayBToday the United States Supreme Court ruled that Section 3 of the federal Defense of Marriage Act (DOMA) is unconstitutional.  The case, United States v. Windsor, 570 U.S. ____ (2013), involved the portion of DOMA that stated that the federal government will only recognize marriages between opposite-sex spouses for purposes of federal law.  There are over 1,000 federal laws that address marital status, and DOMA’s Section 3 denied validly married same-sex couples myriad protections and responsibilities under federal law.  Because of the Windsor decision, same-sex spouses who are validly married under state law will now also be treated as married under federal law. 

Edith Windsor married Thea Spyer, her partner of 46 years, in Ontario, Canada, in 2007.  At the time, their state of residency, New York, did not allow same-sex marriage, but it did recognize the validity of their Canadian marriage.  When Ms. Spyer died in 2009, she left her entire estate to Ms. Windsor.  Ms. Windsor filed Ms. Spyer’s federal estate tax return and claimed that she was owed a refund of $363,053 as the surviving spouse.  Under federal tax law, property passing from a deceased spouse to a surviving spouse is not subject to estate tax.  However, DOMA prevented the IRS from recognizing Ms. Windsor and Ms. Spyer’s marriage, and the refund claim was denied.  The federal District Court and the Second Circuit Court of Appeals ruled in favor of Ms. Windsor, holding that the applicable provisions of DOMA were unconstitutional and ordering that the Treasury refund the estate tax paid to Ms. Windsor with interest.  The government appealed that decision to the U.S. Supreme Court.

In today’s U.S. Supreme Court decision, Justice Kennedy, writing for the majority, stated Section 3 of DOMA violates the due process and equal protection principles of the Fifth Amendment to the U.S. Constitution because it was principally designed to impose an unequal status on otherwise validly married same-sex couples.  Specifically, Section 3 tells these couples that “their otherwise valid marriages are unworthy of federal recognition . . . plac[ing] same-sex couples in an unstable position of being in a second-tier marriage.”  Slip op. at 23.  To the extent that a state has chosen to allow same-sex marriage, the U.S. Constitution prohibits the federal government from imposing “a disability on the class [of same-sex spouses] by refusing to acknowledge a status the State finds to be dignified and proper.”  Slip op. at 25.

Continue Reading Supreme Court Rules DOMA Section 3 Unconstitutional

HilaryLThe United States Supreme Court issued its opinion in Hollingsworth v. Perry, 570 U.S. ___ (2013), this morning, regarding the validity of Proposition 8.  The outcome is that same-sex marriage is once again legal in California.  The Supreme Court did not rule on a specific right to same-sex marriage, but rather it stated that neither it nor the federal Court of Appeals for the Ninth Circuit (which includes California) had the power to hear the case.  Hollingsworth is largely a procedural case, and it requires some background to fully understand.

In 2008, the California Supreme Court held that the California Constitution’s equal protection clause prohibited limiting marriage to opposite-sex couples.  Shortly thereafter, California voters passed Proposition 8, which amended the state constitution to restrict marriage to opposite-sex couples.  The Respondents in Hollingsworth, two same-sex couples, filed suit against various California state and local officials in federal District Court asserting that Proposition 8 was invalid under the Fourteenth Amendment of the U.S. Constitution.  California state officials declined to defend Proposition 8, and the District Court allowed the Proponents (the parties who put Proposition 8 on the ballot) to defend it.  The District Court then declared Proposition 8 unconstitutional, and state officials declined to appeal.  The Proponents then appealed to the Ninth Circuit Court of Appeals.  The Ninth Circuit ultimately held that Proposition 8 was unconstitutional, and the Proponents appealed to the U.S. Supreme Court.  Even though the Ninth Circuit found Proposition 8 to be unconstitutional, it put a “stay” in place, meaning that same-sex marriages were put on hold while the appeal to the Supreme Court was pending.

Continue Reading Marriage Equality Returns to California

HilaryLRetirement plans and life insurance and annuities often constitute a large portion of a client’s estate.   At death, these plans are distributed by beneficiary designation, not by the client’s Will or trust.

Many clients are aware that under California law (unless a Will specifically provides otherwise) bequests made to the former spouse in a Will that was made prior to the divorce are revoked at the time the dissolution becomes final.  In addition, some beneficiary designations naming the former spouse are automatically revoked upon divorce; but that is not always the case.  For example, there is no such automatic revocation of beneficiary designations for retirement plans that are covered by ERISA.  For an extended discussion of the effect of California law on the inheritance rights of a former spouse see the following Death and Divorce Blog.

 

Continue Reading NEW U.S. SUPREME COURT CASE HIGHLIGHTS IMPORTANCE OF UPDATING BENEFICIARY DESIGNATIONS UPON DIVORCE

Last week, I blogged that a common refrain that we hear from people when we encourage them to consider estate planning is “But I don’t need an estate plan.”  This post addresses the second of three of the most common refrains that we hear.

I don’t need an estate plan because I want everything to go to my spouse.

Many married (or registered domestic partner) couples believe that they don’t need an estate plan because each spouse or partner wants everything to go to the other.  This is true for community property.  However, if either spouse owns any separate property, the separate property will be divided between the surviving spouse and other relatives.  Separate property generally includes anything owned prior to marriage and anything acquired during marriage by gift or inheritance, and titling a separate property asset jointly or commingling it with community property will not convert it to community property.  Many married couples will have at least some separate property, and if the surviving spouse and his or her in-laws do not get along, it could lead to disputes.  Additionally, if you have children, half to two-thirds of the separate property will go to your children, depending on the number of children.  If the children are minors, a court proceeding may be needed to distribute the assets to a guardian of the estate for the child or into a blocked account until the child turns 18 (even if the child has a surviving parent).   Even if a large sum of money is involved, there is no way to prevent the child from accessing the entire account at age 18.

Continue Reading You Need an Estate Plan (Even in Your 20s and 30s) (Part Two)

KellyDIn Conservatorship of Gregory D., (“Gregory D.”), the Court of Appeal considered whether the mother of a conservatee had standing to appeal an order that, among other things, set a visitation schedule for her son, an adult conservatee.  The Court of Appeal determined that the mother did not have standing to appeal, as she had not identified any of her own rights or interests that were injuriously affected by the order.

The Conservatorship:

Gregory D. (“Gregory”) is a developmentally disabled adult in his mid-twenties. Gregory reached the age of 18 in 2005; and, he moved into his own apartment in 2008, with supportive services that enable him to live independently.  In 2004, Gregory’s parents, Linda and Joseph, who were divorced, filed competing petitions to be named as Gregory’s limited conservator.  In 2005, Linda and Joseph settled the dispute and agreed that Linda would become Gregory’s limited conservator.  As limited conservator, Linda was granted various powers, including the ability to fix Gregory’s place of residence, access to Gregory’s confidential records and papers, and the power to enter into contracts on Gregory’s behalf.

A Series of Conservators:

While Linda was serving as limited conservator, further litigation ensued between Joseph and Linda pertaining to Linda’s administration of the conservatorship.  Joseph filed a petition to remove Linda as Gregory’s conservator, contending that Linda had improperly relocated Gregory from half-time residence in Joseph’s home and had prohibited contact between Joseph’s family and Gregory.  In August 2008, the court appointed a Probate Volunteer Panel attorney, Paul Gaulke (“Gaulke”), as attorney for Gregory.

In July of 2009, after Joseph and Linda entered into another settlement agreement, the court entered an order providing, among other things, that Linda would resign as limited conservator immediately upon the appointment of a successor limited conservator.  In September 2009, the court appointed Linda Cotterman (“Cotterman”) as the successor limited conservator for Gregory.

Continue Reading Mother Lacked Standing to Appeal Probate Court’s Order Relating to Her Son’s Rights