Estate Planning for Gay and Lesbian Individuals, Same-Sex Couples and Unmarried Couples

Although on June 24, 2011, New York enacted legislation legalizing same-sex marriage and granting same-sex couples the right to marry, gay and lesbian individuals and same-sex couples face a different set of challenges in meeting their estate planning needs.

New York became the sixth and most populous state to legalize same-sex marriage, joining Massachusetts, Connecticut, Vermont, Iowa and New Hampshire, as well as Washington D.C. Argentina, Belgium, Canada, Iceland, the Netherlands, Norway, Portugal, South Africa, Spain and Sweden also allow same–sex marriages to be performed in their jurisdiction. Rhode Island and Maryland recognize foreign same–sex marriages in certain contexts but do not statutorily permit same–sex marriage to be performed there; California remains in flux because of constitutional challenges to Proposition 8. For a map of state laws on various issues impacting same–sex couples, click here.

Marriage is a state-based right that confers a "bundle of rights" on two individuals. Unfortunately, individual state recognition of same–sex relationships — whether in the form of a civil union, domestic partnership, or marriage — has no bearing at the federal level because the Defense of Marriage Act ("DOMA") limits the definition of "marriage" to a union "between a man and a woman." This limited definition denies same–sex couples the automatic bundle of rights (more than 1,000 statutes and regulations, from joint filing of federal income tax returns to transferring fishing licenses between spouses) that are afforded opposite–sex married couples under federal law. This means that a marriage valid in and recognized by Vermont may not be recognized in Kentucky or Tennessee. DOMA also means that same–sex couples (and unmarried heterosexual couples) do not enjoy many of the estate tax savings techniques enjoyed by heterosexual married couples. It also means that even with New York's new law, same-sex spouses will not enjoy the same federal benefits as their opposite–sex counterparts — among them the unlimited marital deduction, unlimited spousal transfers, survivor and spousal social security benefits, the ability to take unpaid leave under the Family and Medical Leave Act when a spouse is ill, or even spousal privilege of communications in federal court — until DOMA is repealed. DOMA's demise may come soon but has not yet arrived.¹ Until then, all same–sex couples must be proactive to protect their legal rights.

Perhaps more than anyone else, same–sex couples and other unmarried couples (and their families) need to consult with an estate planning attorney to ensure that their planning objectives are met through comprehensive documentation.

¹ The Obama administration declared on Feb. 23, 2011, that it would no longer defend DOMA. This means that the Department of Justice will no longer defend the law, marking a serious logistical setback for DOMA's defense. Even if DOMA is repealed, however, if same-sex spouses move to a state that does not recognize same-sex marriage, they will be excluded from state benefits as well as any federal benefits or programs that look to state law to determine eligibility. This severely restricts the available jurisdictions to which same-sex couples might retire or relocate for employment. Proposed federal legislation called the "Respect for Marriage Act" seeks to resolve this issue by repealing DOMA would allow the federal government to provide benefits to same-sex spouses even if they reside in a state that does not recognize the marriage.

Return to Practice Areas Listing