Although there have been significant positive changes in the laws throughout the nation with regard to same-sex

marriage in recent years, members of the LGBT community continue to face legal hurdles that heterosexual couples do not face.

ESTATE PLANNING
for the LGBT COMMUNITY

RICHARD B. SCHNEIDER
OREGON ESTATE PLANNING ATTORNEY

A comprehensive estate plan can help you manage your wealth while you are alive and ensure that it is distributed according to your wishes after your death. If you are married, you undoubtedly wish to protect and provide for your spouse in your estate plan. If you are a same-sex couple there are special considerations that must be taken into account in order to accomplish these goals. Although there have been significant positive changes in the laws throughout the nation with regard to same-sex marriage in recent years, members of the LGBT community continue to face legal hurdles that heterosexual couples do not face.

U.S. V. WINDSOR THE CASE THAT CHANGED EVERYTHING

Until very recently, same-sex couples were denied over 1,000 federal benefits as a result of the definition of marriage found in the Defense of Marriage Act, or DOMA, passed in 1996. Because DOMA defined marriage as a legal union between one man and one woman, even same-sex couple who were legally married in a state that performs same-sex marriages were denied recognition at the federal level. That, in turn, caused same-sex couple to miss out on a virtually endless mist of benefits that heterosexual couples take for granted such as Social Security retirement benefits, tax benefits given to married individuals, and the right to be included as a dependent for insurance purposes. Another benefit that same-sex couples were denied was the right to inherit from a spouse taxfree. The unlimited marital deduction allows you to leave an unlimited amount of assets to your spouse without worrying about that gift being subject to gift and estate taxes. Same-sex couples, however, could not use

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the unlimited marital deduction because the federal government did not consider them to be legally married. That all changed when Edith Windsors spouse and partner of 44 years, TheaSpyer, died in 2009 and left her a sizeable inheritance. The same-sex couple was married in Canada and lived in New York, a state where their marriage was recognized, at the time of Spyers death. When the IRS challenged Windsors marital deduction, Windsor filed a lawsuit that went all the way to the Supreme Court of the United States, or SCOTUS. Eventually SCOTUS ruled that DOMAs definition of marriage was unconstitutional, opening the door for married same-sex couples to enjoy the same benefits as their heterosexual counterparts do.

Windsor, however, fell short of proclaiming same-sex marriages to be valid

across the United States. Therefore, individual states are still free to decide if they will perform or recognize same-sex marriages.

SAME-SEX MARRIAGE IN OREGON

Currently, 17 states and the District of Columbia have a freedom to marry law on the books. A few other states, including Oregon, fall short of allowing same-sex marriage but do offer an alternative such as a domestic partnership or civil union. In Oregon, same-sex couples cannot legally marry; however, the state does honor same-sex marriages performed in other states. Oregon

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also has a very broad domestic partnership law which gives same-sex partners many of the same benefits that marriage does.

REMAINING CONSIDERATIONS FOR SAME-SEX COUPLES

Although the historical decision in Windsor had a positive impact on estate planning for same-sex couples, it fell short of removing all the possible obstacles. While the federal government now recognizes same-sex marriage, many states do not. Moreover, not all states recognize same-sex marriages performed in other states. Because you never know where life will take you, you cannot count on the laws of the state you currently live in to protect you and your family. A well drafted estate plan, however, can protect you and your loved ones no matter where you end up. Some areas where members of the LGBT community still need to focus when creating an estate plan include: Minor Children of Same-Sex Parents if you have minor children and one parent dies the law may not automatically recognize the other same-sex parents parental rights to the children. Legally adopting the children is one possible solution. You should also nominate the other parent as the childrens guardian in your Last Will

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and Testament and include clear language indicating that the nominated guardian is considered to be the childrens parent. Healthcare Decisions if you are incapacitated because of a serious accident or illness and are unable to make healthcare decisions for yourself, the law will look to the next of kin to make those decisions absent an advance directive appointing an agent. If the law does not recognize your marriage your spouse will not be considered your next of kin and, therefore, could be shut out of the decision making process. In Oregon, as is the case in most states, you can execute an advance directive which allows you to decide ahead of time who will make medical decisions for you should you be unable to make them. Asset Management and Control if you wish your spouse/partner to have equal access and control over shared assets you will need to take legal steps to ensure that access. If you suddenly become incapacitated, the law may not recognize your partners right to assets unless you plan ahead. Titling real property as joint ownership with rights of survivorship not only gives your spouse an ownership interest in the property while you are alive but also allows the property to transfer directly to him/her upon your death without the need to pass through probate. A durable power of attorney can give your partner control over all, or some, of your assets only if you become incapacitated. A revocable living trust also allows you to name yourself as trustee and your spouse as the successor trustee. Assets can then be transferred into the trust giving

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your spouse immediate and complete control over the trust assets in the event of your death or incapacity. Funeral Arrangements sadly, far too many same-sex partners have been shut out of this most emotional time period because of antiquated laws. Unless prior arrangements have been made, most states look to the legal next of kin to make funeral arrangements when someone dies. If that state does not recognize your spouse as your spouse, he or she could be left out of the funeral planning and burial process altogether. Again, estate planning can help. One option is to create a funeral trust that you fund now or with a life insurance policy that pays out to the trust. You can then name your partner as the trustee of the trust, meaning that he or she will be in charge of the funds used for your funeral and burial. You can also include very specific terms in the trust directing how you wish to be buried and what type of service you wish to have. Although it appears that the laws are slowly beginning to change in favor of members of the LGBT community, the reality is that the law is often slow to catch up with societal changes. In the meantime, if you are part of a same-sex couple you can use your estate plan to ensure that your wishes are honored should you die or become incapacitated regardless of whether the law recognizes your relationship or not. Contact an experienced Oregon estate planning attorney

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to get started on your plan today.

Nolo, 6 Estate Planning Issues for Gay and Lesbian Couples Forbes, How the Supreme Court Decision Will Change Estate Planning for Same-Sex Spouses American Bar Association, Estate Planning for Same-Sex Couples

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About the Author

Richard B Schneider
Before devoting his professional efforts primarily to estate planning, Mr. Schneider spent over fifteen years working on Wall Street for major law firms and investment banks. After graduating from law school, he practiced general civil law in New York City for five years, specializing in business transactions, financings and corporate matters. He also represented major investment banking firms in mortgage trading and real estate-related matters. Among his clients were international shipping companies, commercial and investment banks and institutional lenders, including General Electric Capital Corporation, Salomon Brothers and Merrill Lynch. For the next ten years Mr. Schneider served as Senior Vice President at the investment banking firm of Kidder, Peabody, where he managed outside legal counsel for a variety of large financial transactions between major institutions. He played a central role in the creation of Kidder, Peabodys mortgage trading subsidiary and advised and executed transactions with insurance companies, pension funds and government agencies, including the Resolution Trust Company. In 1996 Mr. Schneider established a residence in Portland, Oregon and began his law practice there in 1997. He has made a long-term commitment to providing first-class estate planning legal services to families and individuals within the Portland metropolitan area and the surrounding SW Washington region. His motivations for moving to the Northwest were several: the natural scenic beauty of the Northwest landscape, the clean air and streets, the healthy, diversified economy and the overall high quality of life. Mr. Schneider is very grateful for the warm reception he has received from Portland/Vancouver and is pleased to have become a respected member of the Portland/Vancouver legal and business community. Mr. Schneider is a member of the American Academy of Estate Planning Attorneys, the National Academy of Elder Law Attorneys, the Estate Planning Council of Portland and is on the board of directors of the the Rental Housing Association of Greater Portland. He is admitted to practice in Oregon, Washington and New York. Law Offices of Richard B Schneider, LLC www.rbsllc.com 2455 NW Marshall St, Suite 11 Portland, OR 97210 Phone: (503) 241-1215

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