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Estate Planning for Same-Sex Couples

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Estate Planning for Same-Sex Couples THIS OUTLINE MAY NOT BE RELIED ON FOR PENALTY PROTECTION CONNECTICUT BAR ASSOCIATION ESTATES AND PROBATE SECTION Wednesday, October 11, 2006 6:55 to 7:15 P.M. Quinnipiac Club, New Haven, Connecticut ESTATE PLANNING FOR SAME-SEX COUPLES Part One: LEGAL STATUS OF UNMARRIED COHABITATION AND SAME-SEX RELATIONSHIPS Part Two: ESTATE PLANNING CONSIDERATIONS FOR UNMARRIED SAME OR OPPOSITE SEX COHABITANTS Part Three: TAX CONSEQUENCES OF UNMARRIED COHABITATION, DOMESTIC PARTNERSHIPS, CIVIL UNIONS AND SAME-SEX MARRIAGE By Frank S. Berall∗ Copp & Berall, LLP 864 Wethersfield Avenue Hartford, CT 06114 (860) 249-5261 Frank S. Berall is the principal of Copp & Berall, LLP, and Senior Tax Counsel to Andros, Floyd and Miller, P.C. Both firms are in Hartford, Connecticut. He is a member of the Connecticut and New York Bars, holding B.S. and J.D. degrees from Yale and an LL.M. (in Taxation) from New York University School of Law. He is Co-Chair of the Notre Dame Estate and Tax Planning Institute, the Senior Topical Editor for Probate and Estate Planning of the Connecticut Bar Journal, on the Editorial Boards of Estate Planning and ALI-ABA's The Practical Tax Lawyer, a Life Member of the American Law Institute, a Fellow of both the American College of Trust and Estate Counsel and the American College of Tax Counsel, an Academician and Vice President, Americas, of the International Academy of Estate & Trust Law and is on the Executive Committees of the Connecticut Bar's Tax and its Estates and Probate Sections. He was Co-Chair of the Advisory Council of the Hartford Tax Institute for 10 years, President of the Hartford Tax Club and an adjunct faculty member at Yale Law School, the University of Connecticut Law School, the University of Hartford's Graduate Tax Program and the American College (of Life Insurance), was a Regent of the American College of Trust and Estate Counsel, chaired two of its committees, was on its Editorial Board, was chair of four committees of the American Bar Association's Tax Section, four of its Probate Section and chaired both the Tax and Probate Sections of the Connecticut Bar Association. He is the President and a Director of the Hartford Yale Club, a Past President and former Director of The Culver Summer Schools Alumni Association and a former Trustee of The Culver Educational Foundation. The National Association of Estate Planning Councils has designated him as an Accredited Estate Planner. He is listed in current editions of Who's Who in America, Who's Who in the World, Who's Who in the East and Who's Who in American Law and is recognized for his expertise in both trusts and estates law and tax law in the 1987 through 2007 editions of "The Best Lawyers in America" and by Connecticut Magazine as a 2006 and 2007 Super Lawyer. Neither the author, the Connecticut Bar Association nor its Estates and Probate Section are responsible for the applicability, accuracy, validity, tax or legal consequences of the materials or forms contained in this outline as applied to any client's situation. ∗ Copyright © 2006 by Frank S. Berall. All rights reserved. This outline is a combined, updated and condensed version (through October 2, 2006) of two previous publications and an outline, all by the author; namely, The Non-Traditional Family in the United States and Canada— Estate and Tax Planning Responses, which itself was one-quarter of a book, Families and Estates: A Comparative Study, edited by Rosalind F. Croucher (Kluwer Law International, 2005), and Legal and Tax Status of Persons in Connecticut Civil Unions and Other Unmarried Cohabitants, 78 Conn. B. J. 261 (#4), distributed in June, 2006. The prior version of this outline (with the same name) was distributed at the Estates & Probate Section’s program at the Connecticut Bar Association’s Monday, June 12, 2006 annual meeting. UNCONVENTIONAL RELATIONSHIPS PART ONE LEGAL STATUS OF UNMARRIED COHABITATION AND SAME-SEX RELATIONSHIPS TABLE OF CONTENTS I. INTRODUCTION ...................................................................................................1 A. Gradual Recognition of Rights of Unmarried Couples................................1 1. The most extensive changes in non-traditional family law involve same-sex partners................................................................2 II. FEDERAL AND STATE DEFENSE OF MARRIAGE ACTS (DOMAs), STATE CONSTITUTIONAL AMENDMENTS AND CASE LAW ....................5 A. A Federal Defense of Marriage Act (hereafter referred to as DOMA) defines a marriage as a relationship between one man and one woman......5 B. State DOMAs...............................................................................................6 1. State constitutional DOMAs ...........................................................6 2. A Massachusetts Constitutional Amendment to ban gay marriage will be on the 2006 ballot.................................................................7 3. Challenges to the Federal DOMA and to similar State Constitutional Amendments...........................................................10 4. Massachusetts is the only state in which gay marriage is legal............................................................................................15 B. Notwithstanding the United States Constitution’s Full Faith and Credit Clause, the federal and state DOMAs and state constitutional amendments may permit states to refuse to grant full faith and credit to other states’ lawful same-sex marriages.......................18 1. The limited exception to full faith and credit clause......................18 2. Recognition by Connecticut and Vermont of each other’s civil unions.....................................................................................19 3. Conflict of laws..............................................................................19 III. LEGAL CONSEQUENCES OF NON-MARITAL COHABITATION ...............19 A. Trend Towards Recognizing Non-Marital Cohabitants’ Rights................19 1. Obligations of domestic partners and members of civil unions.....20 2. Recognition of express oral agreements ........................................20 3. Quasi contracts, gifts and quantum meruit ....................................20 4. Proof problems with oral agreements and implied contracts.........21 B. Common-law Marriage has been used to grant relief................................21 i 1. Parties claim to be married ............................................................21 2. Current status.................................................................................22 C. Putative Marriage.......................................................................................23 1. Recognized in certain states if couple believes themselves validly married...............................................................................23 2. Children of putative spouses are considered legitimate and the couple has support obligations to each other and to their children ..........................................................................................24 3. Property rights................................................................................24 D. Rights of spouses in conventional, common law and possibly even putative marriages under federal and state law..........................................25 E. Rights of persons living together to enforce contractual and equitable claims to property......................................................................................25 1. Recently, there has been worldwide recognition that unmarried people living together have certain rights traditionally recognized only for married couples ...........................................25 2. Post separation rights of unmarried cohabitants ............................25 IV. CASES INVOLVING SAME-SEX RELATIONSHIPS ARE INCREASING.....27 A. Same-sex domestic partners have brought several suits seeking to receive the same benefits and rights as married couples .......................27 B. For the present, contract law will probably be applied to gay relationships between unmarried cohabitants in most jurisdictions, whether of the same or opposite sex..........................................................28 C. Decriminialization of gay sex ....................................................................28 1. Authority for military ban on homosexuality ................................28 2. Minnesota’s anti-sodomy law is invalid ........................................29 3. Implication that state bans on gay sex is unconstitutional.............29 4. Scalia’s dissent that Lawrence ends all morals legislation ............30 5. O’Connor’s concurrence that Texas law violated equal treatment ........................................................................................31 D. Current Attitudes Towards Gays in the United States...............................31 1. Public opinion may be swinging against same-sex rights .............31 2. Same-sex marriage has become the “hot button” issue .................31 3. The word “marriage” causes a deep emotional response...............32 4. Civil union may be the compromise solution ................................32 V. DOMESTIC PARTNERSHIPS, CIVIL UNIONS AND SAME-SEX MARRIAGES........................................................................................................32 A. Domestic partnership and civil union laws ...............................................32 1. California’s Domestic Partner Rights and Responsibilities Act of 2003 ...................................................................................33
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