Estate Planning for Same-Sex Couples After Obergefell vs. Hodges

Posted on Jul 17, 2015 in LGBT Planning

One June 26, 2015 the United States Supreme Court issued its opinion in Obergefell vs. Hodges, the name assigned to a series of consolidated cases on same-sex marriage rights.  The Court ruled 5-4 in favor of the petitioners, holding that same-sex married couples are entitled to equal protection under the laws, and that their marriages must be recognized nationwide.

Impact of Obergefell for Same-Sex Married Couples

State laws banning same-sex marriage are effectively invalidated.  Same-sex spouses will now enjoy all state tax benefits and other spousal benefits that other couples enjoy.  (including marriage, divorce, adoption & child custody, separation agreements & QDROS, marital property, survivorship spousal death benefits, inheritance through intestacy, priority rights in guardianship proceedings, contract rights, etc.)

Couples absolutely should still proactively plan.  Just because states recognize marriage doesn’t mean couples should not take control of their will and trust planning, and clearly set forth their wishes in enforceable legal documents.  All the good reasons to plan apply just as much to same-sex married couples as well as opposite-sex couples:

  • Proactively expressing their wishes concerning their medical care during periods of incapacity (through durable powers of attorney);
  • Structuring the distribution of their property-ideally in protective trusts- for the benefit of their surviving spouse and children after death;
  • Establishing trust to preserve privacy, and to avoid the delay and expense of guardianship or probate proceedings during incapacity and after death;
  • Providing mechanisms that allow flexibility in administering those trusts to account for changes in the law, or changes in beneficiary circumstances after death (through carefully-tailored choice of law, decanting, or trust protector provisions);
  • Providing clarity and discretion to a trustee to make strategic tax decisions through trust administration after death (through various investment powers, and accounting and tax provisions);
  • Providing for family members other than a spouse or child through their estate plans;
  • Making gifts to religious or other charitable organizations through their estates;
  • Allowing orderly operation and transition of businesses or professional practices through incapacity or death

Obergefell likely represents the last word on same-sex marriage, elevating these relationships to equal statute with other marriages.  While same-sex married couples are now entitled to equal protection under the laws of every state, the efficacy of those laws in ensuring dignity in disability and death, and orderly structured distribution of property after death is very limited for all couples.  Families should always take control of their planning and leave as little to state law interpretation as possible.  That is best done through careful planning with experienced professionals who can intelligently guide the family through the process.

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