Lobbying Affiliate: MML&K Government Solutions

Planning for Equality: Estate Planning, Family Law, and Tax Information for the LGBT Community, Business Lexington panel discussion

Attorneys

April 3, 2014

Authored by:
Margaret S. Barr
Masten Childers III
Brittany Blackburn Koch
Matthew J. Koch
Terri R. Stallard

On April 3, McBrayer and Business Lexington presented a panel discussion on how same-sex couples can protect their legal interests in a time when rights remain uncertain, both at the state and federal level. The panel consisted of attorneys from McBrayer's Estate Planning, Tax, and Family Law practice areas - all of whom have handled the unique legal needs of LGBT couples. Attendees benefitted from the panel's real-world advice on everything from how to pursue adoption to how to title property.

The event drew over fifty attendees and many arrived with questions about the current legal landscape and challenges that have personally affected them in recent years. Below, you will find a few of the questions posed, along with the information that was provided. If you are in a same-sex relationship and would like to know more about how to protect both your and your partner's interests, contact a McBrayer attorney today at www.mmlk.com or (859)-231-8780.

Q: I heard that Kentucky decided to recognize same-sex marriages, but then decided not to do so. What is going on?

A: On February 12, 2014, U.S. District Judge John G. Heyburn II issued a preliminary ruling that same-sex marriages legally performed in other states must be recognized in Kentucky, overturning parts of a 2004 state constitutional amendment barring recognition of same-sex marriages performed elsewhere. The ruling meant that couples could change their names on official identifications and documents and obtain the benefits of any other married couple in Kentucky. The ruling was made final on February 27th, but on February 28th, the Judge issued a twenty day stay, thereby delaying enforcement of his ruling to May 20, 2014. Governor Beshear subsequently requested in a written motion that Judge Heyburn stay his decision indefinitely so that the case could be appealed. On March 19, Judge Heyburn agreed to stay his ruling "until further order." So, for now, Kentucky bars same-sex couples from marrying and does not recognize marriages that were performed elsewhere.

Q: What impact does the Windsor decision have if I live in a state that does not recognize gay marriage, such as Kentucky?

A:Windsor overruled Section 3 of the Defense of Marriage Act, but it does not require individual states to recognize marriage. It does mean that federal agencies can now choose to grant same-sex couples the same benefits as heterosexual couples. Whether an agency chooses to do so depends on whether it elects to follow a state of celebration or state of domicile rule.

A state of celebration rule recognizes same-sex marriages if they were valid where performed, regardless of where the couple now resides. A state of domicile rule, in contrast, only recognizes same-sex couples who live in recognizing states. In short, the Windsor decision allows same-sex couples in non-recognizing states to receive benefits from some federal agencies.

For example, if a couple was married in Connecticut (a recognizing state), but now live in Kentucky (a non-recognizing state), they will receive the same federal tax treatment as heterosexual couples residing in Kentucky because the IRS officially announced that it would follow the state of celebration rule.

Q: I was legally married in another state and now live in Kentucky. I own my own home and want it to pass to my spouse upon my death. How can I ensure that happens?

A: Kentucky does not recognize your marriage, so under the laws of intestate succession, property will not pass to your same-sex spouse as it would with a heterosexual spouse. To accomplish your goal, you will need an estate plan, particularly a Will. If you die intestate (meaning without a Will), your property will pass to your surviving spouse if there are no children of the marriage; however, because Kentucky does not recognize same-sex marriage, your same-sex spouse is not considered to be a "spouse" and would thus inherit nothing. A Will can override Kentucky's intestacy laws and specify to whom you would like your property to pass.

In addition, there are ways in which you can title your real property to ensure that it will pass automatically to your surviving spouse upon your death.

Q: Besides a Will, how else can I control how my property will pass?

A: You may want to consider establishing a trust. A trust is a fiduciary arrangement that allows a third party (known as a "trustee") to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be set up in many ways and can specify exactly how and when the assets pass to the beneficiaries and can place restrictions on such dispositions. Because trusts do not have to pass through probate at death, beneficiaries will be able to gain access to trust assets more quickly than if they were accounted for in a Will. In addition, using a trust can save court fees, potentially reduce estate taxes (depending upon the type of trust), and ensure privacy.

Q: I do not even know where to begin with estate planning. Can you tell me what essential documents my partner and I need if we are living in a non-recognizing state?

A: Do not let the term "estate planning" overwhelm you! In reality, estate planning is simply deciding what you would like to do with your property upon death. Everyone, even those without a lot of assets, can benefit from advanced planning - it is not just for the rich. If you do not know where to start, consult an attorney about drafting the following documents: a Will, a Power of Attorney for both financial and health care matters, a Living Will, and a Domestic Partnership Agreement. If there are minor children involved, you might need additional documentation, such as co-guardianship papers.

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