In the wake of the Windsor case, same-sex couples living in recognition states and non-recognition states alike should confirm and, if necessary, update their estate planning instruments to ensure their wishes will be honored in the myriad legal landscape left as a result. This is especially so for couples who have legally married, but live or own property in states which still do not recognize the legality of the marriage. This article suggests circumstances under which estate planning should be considered and carefully scrutinized in the post-Windsor world.
First and foremost, pre-nuptial agreements should be considered prior to any marriage; anti-nuptial agreements should be considered for those already married. A couple can use the pre-or-post-nuptial agreement to express their intent for disposition of marital property in the event of divorce. This is particularly important for couples who may move to a non-recognition state during the life of their marriage, and/or who may own or come to own property in a non-recognition state. The couple may not even be able to obtain a divorce in a state that does not recognize their marriage; or alternatively may be required to file an action in equity, outside of well-established proceedings and rules for divorce. Divorce laws are often much clearer with respect to factors considered in determining division of assets. Pre-and-post nuptial agreements may be available to sort out some of the financial issues that may arise during the marriage.
When the couple has children, special steps should be taken to ensure both parents' parental rights will be respected outside of recognition states. Unless the child is adopted by a non-biological parent, that parent may be prohibited from exercising his or her parental rights in a non-recognition state, even if both parents are named on that child's birth certificate. Furthermore, in the absence of adoption, the non-biological parent may not be permitted to make medical decisions for the child. The state may not consider children of same-sex couples "children of the marriage," which has custodial and support implications for the parties and the children. Additionally, courts may not be available to enforce the non-biological parent's parental rights in emergency situations.
Both spouses should check to ensure their medical directives are in order and clearly express their intentions. A spouse's right to make medical care decisions may not be honored in jurisdictions that do not recognize the marital relationship and children of the spouses may be at a disadvantage (absent legal adoption) if the birth parent is not available to make health care decisions for them. Both spouses should ensure they have a valid health care proxy, adoption should be discussed, and requisite paperwork should be readily available to both parties in the event of an emergency.
Finally, both spouses should have updated wills and estate instruments. These should be reassessed for applicable tax consequences, as many of the gift and estate tax provisions affecting same-sex couples were affected by Windsor. Whatever final dispositions a spouse may make should be carefully reviewed by at attorney and/or tax professional to ensure the simplest, most financially advantageous result for the family.
