HOW WILL THE NEW SUPREME COURT DECISIONS AFFECT YOU
The Supreme Court killed the Defense of Marriage Act on June 26, 2013, and federal agencies are issuing new rules and procedures to grant LGBTQ couples spousal rights.
Attorneys Cynthia L. Barrett and Tabitha Lundberg Koh invite you to attend these free sessions exploring how the expansion of federal rights to LGBTQ couples will affect you. The Federal Government’s dismantling of DOMA will take time – and the attorneys are following developments day by day. Cindy and Tabitha have reserved the Hollywood Library back room for these sessions open to their clients and friends of the office.
There is no charge and you are welcome to bring a friend.
Topics to be Discussed Include:
*Couples and “Marriage Somewhere”: The federal rights will flow to COUPLES who are “lawfully married” in one of the growing number of states, and Canada, where marriage is legal. What does this mean in Oregon? Will a “marriage somewhere” help you- does it make sense for you and your partner?
*Single Widows and Widowers: Some federal rights flow to widows and widowers – if your partner died in the last few years, can you claim benefits now (Social Security or pensions or military) as a survivor?
*Federal Employees and Retirees: A two-year application “open period” has just been announced, ending June 26, 2015 – what does that mean for you?
*Tax Returns: Who should consider amending federal tax returns? When will more guidance come down from the IRS?
*Social Security: Bring your Social Security Statement (available at ssa.gov) for answers to questions such as:
Should the younger partner claim the 50% spousal benefit on the older partner’s Social Security record before age 66?
Should the age 66+ partner claim and then suspend, to permit the 8% growth in benefits until age 70? Should a survivor age 60+ apply for benefits NOW?
Questions? Contact Cynthia Barrett’s office at (503) 294-0080
PART OF DOMA DIED – WHAT NOW?
PART OF DOMA DIED:
WHAT NOW FOR LGBTQ COUPLES?
The Supreme Court of the United States (SCOTUS) ruled on June 26, 2013, that the Defense of Marriage Act, Section 3, was unconstitutional. Now, the federal government will treat “lawfully married” same gender couples as spouses for approximately 1100 different laws and regulations.
Federal agencies are moving quickly to implement this development. LGBTQ couples are riveted on this issue. If not yet married, they now must decide whether to marry, and if already married, they need to know how. Only thirteen states and the District of Columbia allow same sex marriage today, and nine states offer some other form of recognition. States are divided into three categories: marriage states, something states, and nothing states.
One major issue is whether a “marriage somewhere” will link a couple to federal recognition, no matter where they live. The nothing or something state’s same sex couples will travel to a marriage state to celebrate their union, and then return home. A married same sex couple may move to a nothing or something state. Section 2 of DOMA, which was NOT challenged, permits each state to determine whether to recognize same sex marriages. Some states may NEVER choose to recognize the validity of same sex marriage.
Will a lawfully married same sex couple be denied a federal benefit, or escape spousal responsibilities, if they live in a non-marriage state? Domicile concerns are a non-issue for many federal benefits (as shown by recent immigration, Department of Defense, and Office of Personnel Management developments). The US Department of Justice is consulting with each agency to develop some uniform policy. Practitioners are scouring statutes to see if federal recognition is linked by authorizing litigation to the state the applicant resides (or died, if survivor spouse benefits are sought).
Eventually, all validly married same sex couples will have their relationships respected by federal agencies – but achieving that goal will take more advocacy and litigation. A federal constitutional right to same sex marriage is unlikely given the composition of this US Supreme Court. What now for LGBTQ couples, as part of DOMA has died but Section 2 remains?
What should Oregon registered domestic partners do?
August 6, 2013 – 5:30-7:30 p.m.
Hollywood Branch Library, 4040 NE Tillamook
Cynthia L. Barrett
Attorney at Law
2722 NE 33rd Avenue
Portland, Oregon 97212
© 2013 Cynthia L. Barrett
THE SUPREME COURT CASES AND LGBTQ AND LIFE PLANNING
THE SUPREME COURT CASES
LGBTQ ESTATE AND LIFE PLANNING
© 2013 Cynthia L. Barrett – Watch for Updates on www.cynthiabarrett.com
MAY BE REPRODUCED WITH ATTRIBUTION, OR LINKED TO YOUR WEB SITE; Provided to the LGBTQ Community as a Public Service by Cynthia L. Barrett
Gay and lesbian couples have three potential forms of marital status: “married”, “something” less than marriage, and “nothing” – and domicile (where you have your legal residency) affects whether the “married” or “something” status is recognized.
“Nothing” states refuse to recognize marriages or civil unions or domestic partnerships from other jurisdictions.
“Something” states may –or may not – recognize other state-granted status. Oregon, for example, does not recognize same sex couple marriages from any jurisdiction.
Marriage states may – or may not – recognize a relationship sanctioned in a “something” state.
Vermont, New Hampshire, New York, California (marriages between 6/15/2008-11/5/2008), Connecticut, Massachusetts, Delaware, District of Columbia, Maryland, Maine, Washington, Iowa, Rhode Island (8/1/2013), Oregon’s Coquille Indian Tribe and Washington’s Suquamish Indian Tribe
“Something” States (Registered Domestic Partner, Civil Union, etc.)
California, Illinois, Hawaii, Oregon, Nevada, New Jersey, Colorado, Wisconsin
○ “Nothing” States
In the other states, there is no formal recognition of same sex couples, and in the most restrictive states even non-bio parentage may be denied (North Carolina, Arkansas, Florida, Mississippi, and Utah)
1.2 Marital Status of Trans Couples
Transgender NOT Transsexual
Transgender is a state of gender identity – where a person’s gender identity differs from his or her assigned sex. See the testimony of US Army Lieutenant Colonel Diane Schroer before Congress in 2008 – she is a decorated Army Ranger veteran, who was denied a civilian anti-terrorist position because she told her prospective boss that she was transitioning from male to female.
Most of us are familiar with the concept of the transsexual – an individual who medically changes his or her gender to the real identity experienced; this individual may be somewhere along the path of gender change – legally complete, with a new birth certificate issued, or not so legally complete – where the individual self-identifies as male or female, but is not yet legally recognized as belonging to the self-identified gender.
This gets complicated. Not all trans individuals can afford, or want, complete gender reassignment surgery. Not all states require complete gender reassignment to issue a new birth certificate.
In the simplest expression, a “trans man” is a female to male transgender person, and a “trans woman” is a male to female transgender person.
Marriage Before or After Transition?
The legal status of the trans’ spouse varies, depending on (1) whether a marriage occurs before or after the legal transition of the trans person, and (2) the laws in the State that is asked to recognize marital status.
If the trans person was married before transition, then after the transition the spouse retains the legal status as spouse for all purposes including federal rights (social security, pension, IRA spousal rollover, federal marital deduction, joint tax filing, etc.). If the trans person marries AFTER LEGAL TRANSITION, then the relevant state law and/or federal benefits law may not recognize the spouse as a legal spouse. This is still in a state of flux. Do we have a same sex couple marriage, or an opposite sex couple marriage? Where same sex couples can marry, there will be no barrier to state recognition – but until DOMA dies, there is confusion about federal recognition.
Social Security POMS on Transgender Spouse Claim
Review the SSA POMS GN 00305.005 Determining Marital Status, below, to see one federal agency struggling with this concept – and expect lack of clarity!
”4. Transgender Claims
“Transgender” claims are those in which information (e.g., from an amended birth certificate, the Rudiment, volunteered information) suggests or supports that a party to an alleged marriage has attempted to change his or her gender since birth. The gender change impact the status of the claimant as the wife, husband, or widow(er) of the NH. Moreover, the status of a claimant as the child of the NH may depend upon whether the child’s parents (the NH and another person) were married. The relationship of the claimant to the NH is largely dependent on the validity of the marriage in question or the right of the claimant to inherit by intestate succession from the NH under State Law. Some States may recognize gender changes, therefore, may recognize a marriage (or inheritance rights) where a transgender individual is involved, provided the new gender is opposite the gender of the other party to the alleged marriage.
a. Gender Change Prior to Marriage
Treat as questionable any marriage where information suggests or supports that prior to the marriage, either party changed his/her gender from the gender at birth. Also treat as questionable an earlier marriage of the claimant or NH to other people where either party to the earlier marriage changed his/her gender prior to the marriage and the marriage was not terminated by divorce or annulment. Send the claim to the RCC responsible for the laws of the appropriate domiciliary State and request an opinion about whether the marriage in question is valid or whether the claimant may inherit from the NH by intestate succession under applicable state law. This applies regardless of whether the attempted gender change consisted of psychological and physiological treatment, or only psychological or partial physiological treatment. The laws of the States that recognize gender changes differ concerning the criteria which must be met to establish a gender change.
b. Gender Change After Marriage-No Divorce or Annulment
A change in gender from the gender at birth of either marriage partner after marriage may or may not invalidate a marriage that was valid at its inception. In States where a gender change is not recognized, such a marriage likely would continue to be valid. However, it is unclear in States which recognize a gender change whether an existing valid marriage is considered a same sex-marriage and therefore, invalid after one party changes gender. Moreover, the law is not clear whether the parties may inherit from each other as spouses under intestate succession. Therefore, treat as questionable and send to the RCC any claim involving gender change that occurred after marriage to determine the effect of the change under applicable State law. Forward the request to the RCC responsible for the laws of the appropriate State.
In all transgender claims, obtain all available evidence relating to the marriage as well as the gender change. In particular, gather evidence as to whether an amended birth certificate was issued as well as information as to where, i.e., facility/State, the gender change was performed, before submitting the claim to the RCC. See GN 01010.800.
CAUTION: If the Numident shows a gender change and the RCC determines that a gender
1.3 Constitutional Right to Marriage for Same Sex Couples
There is a slight possibility that the California marriage case now pending before the Supreme Court of the United States (SCOTUS), Hollingsworth v. Perry 671 F.3d 1052 (9th Cir. 2012) will be broadly decided to declare a federal constitutional right to marry. THE US SUPREME COURT IS NOT LIKELY TO MAKE A BROAD PRO-MARRIAGE RULING.
If SCOTUS issues a broad pro-marriage ruling, then advocates in every “something” and “nothing” state will file a federal lawsuit to overturn that state’s restrictions on gay marriage. Those state by state lawsuits will eventually be successful; married opposite sex and same sex couples will eventually be treated the same. For several years, however, there will be gritchy implementation and uncertainty, creating much anxiety.
If a federal right to marry is recognized, then LGBTQ couples must, like straight couples, marry to access federal and state law benefits. The intermediate status of domestic partner, civil union etc. will fade away – again, in fits and starts and with legal uncertainty in the several year transition period.
1.4 LGBTQ Numbers
The US Census Bureau collects statistics on the number of self-identified same sex households by state. In 2010, 901,997 same sex couples reported their households to the US Census Bureau. Of these couples, 349,371 same sex couples described themselves as “married”; 552,620 couples did not describe themselves as married. (Table 5b 2010 Census Summary File, Same Sex Couple Statistics).
There are 130,000 validly married same sex couples in the United States. The married couples live all over the country, but primarily in recognition states. The 349,371couples who described themselves as “married” in the 2010 Census do not all have that actual legal status.
My state, Oregon, allows domestic partnerships, and keeps county by county records of domestic partner registrations accessible on the Department of Vital Statistics. Only one-third of Oregon’s 14,749 same sex couples (2010 Census) describe themselves as “married” – about the number of registered partners in the State as of April, 2013.
# 1: Discuss
Which kind of state do you live in (marriage, something, nothing?)
What is the number of same sex couples in your state (see Census report)?
Do pre-transition marriages remain valid in your state?
Can a trans person marry a person of the opposite gender in your state?
2. Life and Estate Planning as DOMA Dies
2.1 Defense of Marriage Act (DOMA) May Die in 2013
The federal Defense of Marriage Act, 1 U.S.C.A. §7, (DOMA) defines “marriage” as a legal union between a man and a woman and “spouse” as a person of the opposite sex who is a husband or wife. Section 3 of DOMA declares that the federal laws and regulations shall not treat persons of the same sex as spouses. Section 4 of DOMA permits each state to decide whether to recognize same sex marriages from other states.
Congress could simply repeal DOMA – but neither the Republicans nor Democrats have made that repeal a priority. Congress did repeal “Don’t Ask, Don’t Tell” – with much angst. Eleven states and the District of Columbia allow gays to marry, so that 130,000 validly married same sex couples live in the US. None of these validly married same sex couples are recognized as spouses for federal benefits. Therefore, they and their advocates have filed lawsuits, challenging Section 3 of DOMA as a violation of federal equal protection.
The US Supreme Court accepted review of a federal estate tax case challenging Section 3 of the Defense of Marriage Act (DOMA), heard arguments March 27, 2013, and will issue a decision by the end of June, 2013.
The Supreme Court could:
duck the issue, or
rule DOMA unconstitutional, or
uphold DOMA, and continue the discrimination.
In United States v. Windsor, 699 F.3d 169 2nd Cir (2012) surviving spouse Edith Windsor seeks a refund of $363,000 in federal estate taxes paid on the death of her partner Theo Speyer. Had their Canadian marriage been federally recognized, Ms. Windsor would have used the marital deduction to zero out the estate tax.
If the Supreme Court finds that Section 3 of DOMA violates the Fifth Amendment guaranteeing equal protection, then married same sex couples will be recognized as spouses for federal benefit and federal tax purposes. Gritchy implementation details will be worked out over the next few years.
There are many cases challenging DOMA lined up – with applications for certiorari pending before the US Supreme Court. If the Court ducks the issue in United States v. Windsor, perhaps one of the cases now in abeyance will be the vehicle for overturning the law. The wide expectation is that DOMA will die soon.
Challenges to DOMA have been uniformly successful in lower courts. The US Department of Justice concedes that DOMA is unconstitutional – but Congress has not yet repealed DOMA. Despite DOMA, federal agencies including the State Department, Department of Human Services, and Department of Defense have begun to recognize LGBTQ relationships for SOME purposes relevant to life and estate planning.
My law practice anticipates the death of DOMA.
2.2 Best Planning Practices in Anticipation of Death of DOMA
Whether or not DOMA dies, LGBTQ couples need certain basic documents to protect their families:
Will or Trust Benefiting the Partner – with a “savings clause” so the
Plan remains in effect if you marry or register somewhere after execution
Medical Advance Directive Naming the Partner as Health Care Representative
Financial Power of Attorney
with provisions about “save the home; save the assets; what to spend down on care; reference to long term care insurance; support for the household even if gone for medical purposes; permission to pay the partner for direct care & medical advocacy & and care management; sign affidavits for domestic partners; change IRA/qualified plan beneficiary designations; etc.”
Disposition of Remains Instruction
Nomination of Partner as Guardian and Conservator (included in my Financial Power)
Adoption Decrees for Non-Bio Second Parents and/or Parentage Declarations
LGBTQ estate planning documents (Wills and Financial Powers of Attorney) changed as more and more states permitted same sex couple marriages, and federal recognition of partners as spouses has slowly developed despite DOMA. Also, postmortem probate procedures changed to in recognition states to reflect the spouse/partner status and parentage changes. Since 2004, I have been educating lawyers in Oregon and around the country about these emerging LGBTQ estate and elder law planning options.
2.2.1 Credit Shelter & “As if” Marital Deduction Planning
The first change I made eight years ago in my LGBTQ couple practice was to be more attentive to credit shelter and “as if” marital deduction planning. When my clients have taxable estates (and Oregon has a $1,000,000 state inheritance tax threshold), I include
(1) partner protection credit shelter trusts and
(2) language indicating the client’s intention to claim the marital deduction and qualify trusts for Qualified Terminable Interest Property (QTIP) treatment (IRC 2056).
If you have a taxable estate (federal tax exposure for estates over $5,250,000; state inheritance tax exposure for estates over $1,000,000 in some states like Oregon), then check your will and trust to see if your advisor includes something like the following:
Intent. Except as specifically provided above, it is my intent that the partner protection trust or dispositions in my estate outright to my partner shall qualify for the Oregon inheritance tax partner deduction, and in the future for any federal estate tax deduction extended to state-recognized same sex couple relationships, similar to that marital deduction now permitted for marital relationships, and all provisions herein, including but not limited to any fiduciary powers, shall be interpreted consistent with that intent. Any ambiguities or apparent conflicts under any provisions of this Agreement, including any relating to the qualifications for the deduction, shall be resolved in favor of and consistent with this intent and my primary intent as expressed in this instrument. In addition, the rights, powers and discretions of any fiduciary with respect to the administration of my estate or of any partner trust hereunder shall not be exercised or exercisable except in a manner consistent with this intent and my primary intent.
If you have a taxable estate, and your lawyer did not include this sort of provision – ask why.
Pre-death of DOMA, LGBTQ couples should avoid disclaimer trust planning. [IRC 2518(b) (4) (A)] Currently, if the disclaimed sum passes to a trust for the benefit of the partner, it is an unqualified disclaimer, thus the assets remaining in the trust at the partner’s death are part of his or her gross estate for tax purposes, and subject to taxation twice.
After DOMA dies and some clarity emerges from IRS, I will likely add disclaimer trusts as a tax planning tool for same sex couples with Oregon or federal taxable estates.
2.2.2 LGBTQ Social Security Spousal/Children Rights
If DOMA dies, then LGBTQ will have the same Social Security safety net that straight couples have. All couples over age 55 should go on the Social Security (SS) website, and run off their Social Security benefit printouts. Review the basic benefits at ages 62 and 66, and the spouse’s [and any minor or disabled child’s] entitlement. A surviving partner/same sex spouse should review potential entitlement to survivor Social Security benefits with their lawyer.
I ask all same sex estate planning clients to bring in their SS benefit printouts and go over the following options:
Age to claim benefits
Deferral by one or both spouses
Claim and Suspend by older spouse; then have younger spouse receive 50% spousal benefit
Spousal Benefits – 50% during life, and 100% at death
& how earned wages affect the amount of the benefit before age 66
If minor children are in the household, after one partner is either eligible for SS Disability or reaches age 62, a check for the child can be claimed
If the couple has disabled (before age 22) children, then CIB/DAC benefits can be claimed after one partner is either eligible for SS Disability or reaches age 62 and is eligible for retirement SS benefit.
Check the www.glad.org website, and download that advocacy organization’s great publication Social Security and the Defense of Marriage Act: Can I Do Anything Now to Preserve My Rights? 9/1/2012.
You should determine whether federal recognition of your relationship would entitle you to a spousal benefit (survivor claim, check for 50% of the partner’s SS benefit, etc.). If you were married somewhere, or just registered in Oregon, consider filing a claim NOW before DOMA dies.
If the otherwise eligible spouse files a SS claim now, gets a DOMA denial, then files as appeal so the appeal is pending when DOMA dies, there will be a check for back benefits! There is a significant chance that couples from “something” states (civil union or state registration like Oregon) may also be eligible for SS benefits after DOMA dies.
Before your child can collect minor or disabled child Social Security benefits on your record, you need to determine the parentage law to be applied. DOMA does not prevent the child from collecting SS on the earnings record of either parent – but the state where the application is made must recognize the parent/child relationship!
In processing a child’s claim, the SS administration accepts claims on the bio parent’s earning record without question. Many LGBTQ children are adopted, or have a declaration of parentage, or a deemed parental status based on birth during their parents’ valid marriage or state-sanctioned status (for example, birth after the parents registered as Oregon domestic partners). When a child’s claim is made on a non-bio parent’s earning record, the local office sends it to the regional office for review.
See SSA – POMS: GN 00306.001 – Determining Status as Child
“d. Status of Child of a Same-Sex Marriage or Other Relationship
If the number holder (NH) is the biological parent of a child, no opinion is necessary and child benefits can be awarded on that NH’s record. Please submit all other claims for an opinion to the Regional Chief Counsel, per GN 01010.815, if the NH is not the biological parent and a parental relationship is alleged based upon a same-sex relationship, such as a same-sex marriage, civil union, or other legal relationship, such as a domestic partnership.
Direct all program–related and technical questions to your RO support staff or PSC OA staff. RO support staff or PSC OA staff may refer questions or problems to their Central Office contacts.”
Some states not only deny LGBTQ couples the right to marry or register, but also deny the right to joint and second parent adoption. Social Security will deny a child’s application from these unfriendly jurisdictions. Perhaps when federal implementation of LGBTQ spousal rights occurs, parental status will also be broadened for applicants from “nothing” states, by some form of affidavit or proof of valid parentage
2.2.3 LGBTQ Medicare Issues in Estate Planning
Post-DOMA, married LGBTQ couples will be able to:
File for Part A Coverage through a partner’s Social Security earnings record if needed;
Defer filing for Part B coverage at age 65 without penalty, if group health coverage is provided by a partner’s job.
Medicare Part A Coverage Through LGBTQ Partner/Spouse Earnings Record
Do both partners have sufficient work quarters to get Medicare Part A – or will a Medicare Part A premium be charged?. If DOMA dies, then the otherwise ineligible partner will get Medicare like non-working straight spouses do, on the wage earning record of the other spouse.. Simple access to Medicare may be the spousal benefit that tilts the couple towards marriage.
When DOMA dies, a 65 year old LGBTQ spouse from a marriage state who lacks sufficient work quarters should be able to obtain Medicare on the spouse’s Social Security earnings record.
Medicare Part B Coverage Application at Age 65
Before DOMA dies, there is a Part B Medicare penalty problem for the partner who has health coverage through the other partner’s work. Opposite sex spouses can keep employer group coverage after age 65, and defer applying for Medicare Part B without penalty.
Gay couples are penalized – that is, the non-working partner has to apply for Part B at age 65, pay the Part B premium immediately, or be penalized 10% of the Part B premium per year. As part of retirement planning, you should determine which health coverage each partner will have, private or Medicare, at age 65, and prepare to avoid this penalty trap.3.6
After DOMA dies, the non-working LGBTQ spouse should be treated like an opposite sex non-working spouse: applying for Medicare Part A at age 65 (as secondary coverage), staying in the employer group plan, and deferring Medicare Part B coverage until later needed.
Federal implementation of these LGBTQ Medicare rights will be crucial. Post-DOMA federal rights may be linked to a valid marriage, and only be available if the couple lives in a marriage state. We hope the federal rights will be linked to any recognized spousal equivalent status, or available by affidavit, so that people in something and nothing state can qualify.
Medicare Hospital Visitation Regulations Require LGBTQ Relationship Recognition, but Advance Directive Still Required
Medicare rules protect LGBTQ hospital visitation and right to make medical decisions. But the couple needs to have medical advance directives signed and available to use in an emergency. So I recommend they scan and pdf the signed directives to each other, and to the backup representatives, so the document can be downloaded in an emergency at the hospital.
The federal Center for Medicare and Medicaid Services on September 7, 2011, issued LGBTQ-friendly changes in rules governing hospitals (Conditions of Participation) that receive Medicare and Medicaid funds. Most lesbian couples heard about the Florida hospital’s denying visitation when Janice Langbehn’s partner was dying – despite the Advance Directive naming Janice as health care representative. President Obama apologized to her – and issued rules that should prevent such LGBTQ visitation denials – but only if the couple has their advance medical directives on hand!
Hospitals receiving Medicare and Medicaid funds are now supposed to (1) allow visitation with no restriction based on gender identity or sexual orientation, and (2) adopt policies to ensure lack of discrimination. The Joint Commission on Accreditation has issued a 99 page Field Guide to LGBTQ cultural competency, available on its website. www.jointcommission.org In their accreditation reviews, the hospitals will be asked to show ongoing staff training in LGBTQ cultural competency, and appropriate policies for patient visitation.
2.2.4 Medicaid Protections for LGBTQ Couples
Expensive long term care can impoverish an individual, and threaten the financial security of the ill person’s spouse or partner.. In Portland, assisted living or dementia care costs from $4,000-$7,000 a month. These long term care costs can impoverish the couple.
Some couples insure against the risk – buying long term care insurance policies that pay for in-home help and facility care. Most couples have no long term care policies, so spend down savings until the ill partner qualifies for Medicaid. Medicaid is the payer of last resort for the poor who need long term care. Under federal and state law, spouses can qualify sooner, saving assets for the healthier spouse, and avoid postmortem estate recovery claims.
Elder law attorneys usually put “save the house” and “save the other assets” instructions in the financial powers of attorney for LGBTQ couples. Your financial power of attorney can specify that the agent “spend this amount or liquidate this asset for my care needs” and add directions to “support the joint household” even if you are in care facility . Having a plan is the first step in dealing with long term care costs – and the components of the plan are long term care insurance and financial powers of attorneys containing “preserve the assets” instructions.
In the crisis situation (and any facility placement is a crisis), consult an elder law attorney to determine whether you can save assets from spend down. Before Medicaid will pay the facility, the ill partner must spend down to $2,000. IF the ill partner has given away assets in the last five years, the “disqualifying transfer” will cause a Medicaid denial. Post DOMA, married couples will have the benefit of spousal protections: unlimited transfers between spouses, asset allowances, and income protection.
Now, before DOMA has died, some Medicaid transfer protections have been extended to same sex couples in recognition states. The federal Center for Medicare and Medicaid Services (CMS) encourages this LGBTQ protection. On June 10, 2011 CMS sent a letter to the State Medicaid Directors directing states to use hardship waivers to keep the house occupied by the community same sex partner from being sold during that partner’s life, and encouraging broad use of the hardship waiver to protect a surviving partner from transfer penalties and estate recovery claims against the home.
The CMS hardship waiver provision should allow Oregon registered partners to transfer the home when facility care costs threaten impoverishment. But Oregon has no explicit regulations describing what can be transferred to a partner. Washington in 2012 enacted regulations, WAC 388-513-1367, declaring that registered partners and same sex spouses can apply for a hardship waiver to permit transfers of assets (including the home); no Medicaid transfer penalty would be assessed if the waiver is allowed.
When DOMA dies, all Medicaid spousal protections will be extended to married LGBTQ couples in marriage states. Unmarried LGBTQ couples in “nothing” states will likely have no such protections. Oregon, a “something” state, may keep its existing unwritten “protect the home” practice – but the extension of other Medicaid spousal protections in “something” states is very uncertain.
Do you have a large enough estate to need death tax credit shelter and marital deduction planning? Are these provisions already part of your estate plan?
Is one partner eligible for less monthly Social Security than the other? Do you want to have one partner get spousal benefits on the other’s record?
Are your children recognized as children of both partners? Are they eligible for minor, survivor or disabled adult child benefits on both partners’ earnings records?
Do you have medical Advance Directives signed, and are copies available online in an emergency?
Do your financial powers of attorney have Medicaid transfer and save the assets/spend down instructions, and can your partner use your income to support the household if you are in a facility?
3. Post-DOMA Federal Benefit Implementation
After the Supreme Court finds DOMA unconstitutional, what happens next?
For sure, Edie Windsor will receive her $363,000 federal tax refund! Married same sex couples who die in a marriage recognition state will have the right to use the federal marital deductions.
Federal agencies will commence the immense job of adopting procedures and practices to extend other federal benefits to married LGBTQ couples from marriage states.
It is possible that federal spousal benefits (Social Security, Medicaid, Medicare, ERISA, tax, federal employee, military etc.) will flow only to validly married LGBTQ couples who live in a marriage state.
3.1 LGBTQ Couples from Something and Nothing States
LGBTQ couples from something and nothing states are considering the “marriage somewhere” strategy. That is, they are traveling to a marriage state without residency requirements, putting a marriage on the books, and hoping to bring federal rights back when they return home.
Federal agencies do not want to discriminate between married LGBTQ couples and “something” state LGBTQ couples – and sympathize with couples who live in nothing states and are denied social security, pension rights, IRA spousal rollover, etc. After DOMA dies, more lawsuits will be filed to expand federal recognition to something and nothing state couples. State marriage initiatives will be energized if federal benefits extend only to LGBTQ couples in marriage states.
3.2 Do-Overs & Domicile
Post-death of DOMA, two problems loom: do-overs and domicile.
3.1.1 Will a host of do-overs be allowed?
Will do-overs be allowed after the death of DOMA? That is, will an LGBTQ retiree be able to apply late for a federal benefit that he or she could not get before DOMA died?
Spousal pensions could be re-opened for a limited “second chance” application period; tax returns be amended; perhaps some inherited IRAs could be converted to spousal IRAs during a limited time period. Will the new benefits be retroactive or prospective only? There are a host of matters to be worked out in the general category of “do-overs”.
How will the LGBTQ couple find out about do-over opportunities?
In one of my cases, I found out that my 75 year old surviving lesbian partner could file a hardship waiver affidavit and claim a spousal survivor’s pension. The elderly couple had retired before California allowed domestic partner registration and moved to Oregon. Do-overs are not unheard of, and might arise in many circumstances.
3.2.2 Will Domicile Matter?
Even the “marriage somewhere” strategy may not secure federal benefits for couples living in nothing and something states if domicile matters. For federal recognition, I prefer that domicile not matter. But Section 4 of DOMA permits each state to refuse to recognize marriages granted in other jurisdictions.
If marriage somewhere works for federal recognition in a nothing state, then the LGBTQ spouse might file a joint married federal income tax return, but a single person state income tax return. Domicile will be relevant for state law purposes, but perhaps not for federal recognition.
3.3 Federal Declaration of Domestic Partnership?
To prevent creation of second and third class citizens, the federal implementation of DOMA may proceed in a broader manner: by some sort of declaration or affidavit establishing the partner as a “spouse-equivalent.”
After “Don’t Ask, Don’t Tell” was repealed, LGBTQ individuals could openly serve in the U. S. military. The Defense Department studied ways to integrate the gay family into military benefit programs. Watching the cautious deliberate Defense Department process work has been excruciating for advocates – but the results are promising.
In February, 2013, the Veterans Department Secretary Shinseki allowed the first burial in a National Veterans Cemetery for the deceased spouse of a retired Air Force officer. Portland retired Air Force officer Linda Campbell will bury her spouse (Canadian marriage) and Oregon Registered Partner Nancy Lynchild, in Portland’s Willamette National Cemetery.
On Feb. 11, 2013, in one of his final acts as Secretary of Defense, Leon Panetta extended many benefits to same-sex domestic partners of active service members.
Secretary Panetta did not limit benefits to same sex couples with marriage certificates. He chose to proceed by requiring same sex partners to submit a Declaration of Domestic Partnership.
Perhaps, post-DOMA the federal government will adopt this Defense Department approach – an affidavit of spousal equivalency would link all LGBTQ couples to federal benefits, whether from marriage, something or nothing states.
4 Post-DOMA Predictions
4.1 If marriage somewhere becomes a prerequisite for federal benefits, then LGBTQ couples will marry somewhere – yet recognition of the couple’s “marital” status for state law purposes will vary. Until same sex marriage is allowed in Oregon, couples will marry in another state (perhaps Washington) and also register as Oregon domestic partners (gaining dual status as both spouse and RDP).
4.2 Most LGBTQ couples residing in marriage states will marry. Oregon may become a marriage state in 2014, if the voters approve a proposed measure.
4.3 Some LGBTQ couples will choose NOT to marry or register, so unregistered domestic partnerships will continue to exist.
4.4 Watch for a Declaration OR Affidavit of Domestic Partnership to appear for some federal benefits; eventually perhaps one uniform document for IRS, military, federal retirees, Social Security, Medicare, and Medicaid etc. In the post-DOMA implementation period, each agency may have a slightly different form – watch for those relevant to you!
4.5 If Oregon registered partners cannot access federal benefits post DOMA, then those who do not want to wait until Oregon recognizes marriage must:
4.5.1 Marry somewhere outside Oregon; and
4.5.2 Move to a marriage state if domicile matters.
Social Security News
Your pensions and IRAs do NOT disqualify your spouse or disabled child from receiving SSI and its linked Medicaid. Source: New Clarifying Social Security Administration Policy Instruction, issued February 25, 2010 (https://secure.ssa.gov/apps10/public/reference.nsf/links/02242010110239AM).
Helping with Food and Shelter: Complicated ISM Rules
The Social Security Administration’s own recent study reported a consensus that the in-kind support and maintenance (ISM) rules were “complex, intrusive and sometimes inequitable” and sometimes discourage family members and friends from helping the disabled SSI recipient.
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