All Families Are Traditional Families in New Mexico and the US.
The rights of same-sex couples have greatly expanded in the US since 2013, when the U.S. Supreme Court struck down a portion of the Defense of Marriage Act (DOMA), which prohibited the federal government from recognizing same-sex marriages performed in the states in United States v. Windsor.
Justice Anthony Kennedy, in the majority opinion in Windsor, stated, “The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity.”
On June 26, 2015, the US Supreme Court ruled that the US Constitution guarantees the right for same-sex couples to marry in all 50 US states in Obergefell v. Hodges. Obergefell requires all states to issue marriage licenses to same-sex couples and to recognize same-sex marriages validly performed in other jurisdictions.
Special Issues for Couples Who Marry After Long Partnerships.
Many couples who are now able to marry and choose to do so, have partly separate and partly comingled financial histories, sometimes stretching back decades. Estate planning can take this history into account. Property agreements may also be helpful in order create balance and fairness for a long-term couple that are newly married.
Same-sex married couples can now engage in estate planning as would any other married couple. Couples who now marry have immediate opportunities, including filing amended federal income tax returns for the past three years, obtaining health insurance through a spouse, and utilizing spousal provisions for retirement accounts. Lawfully married same-sex couples and their children now have access to the full range of federal rights, benefits and protections, such as Social Security survivor benefits, access to federal family and medical leave, and benefits for spouses of federal workers and members of the military.
Couples also should review agreements made before marriage and may need to modify them to meet the legal standards for pre- and post-nuptial agreements. Existing estate plans for same-sex couples who marry should be reviewed in light of their change of status. Prior estate planning vehicles, from retirement plans to insurance to ILITs, may no longer work as anticipated.
What if You Choose Not to Marry?
Same sex and opposite sex couples who do not marry but wish to create marital-like agreements related to community-type property, inheritance and privacy rights must do so through advanced planning documents and contracts. In some states, partners may choose to formalize their relationships through domestic partnership registration; this is not an option in New Mexico, although many New Mexico employers, including state government, provide domestic partner benefits. New Mexico also does not recognize common law marriage, as do many states. A common law spouse does not have the same rights as a married person in New Mexico, although state law does grant rights for health care decision-making to long term partners.
For this reason, a private contract similar to a pre-nuptial or post-nuptial agreement can protect family members. Repetitive legal documentation also serves as evidence of the alternative family structure, documenting the duration of a relationship and the intent to make partners the beneficiaries of estate plans. Unmarried partners can grant authority for medical decision-making or financial management in the event of incapacity.
Entering into a marriage is not always economically advantageous to an older same-sex or opposite-sex couple. Couples that habitually share income and assets are likely to find additional security through marriage. Couples with children will likewise. Couples without children, who maintain property separately, who have approximately equal assets and income, or who do not intend to bequeath their assets to their partner may not wish to enter into an officially recognized relationship unless there is a compelling emotional or social reason to do so.
Marriage can also involve exposure to a partner’s debts, tax uncertainties, and in the event of a separation, spousal support claims. For these reasons, individuals should consider entering supplemental agreements covering property ownership before entering a domestic partnership or marriage. Couples should discuss and document how financial assets will (or won’t) be shared.
Planning for incapacity is crucial.
Documents that appoint an agent to make medical decisions for another, known as the health care proxy or durable health care power of attorney, are now recognized in all jurisdictions, and many states provide simple forms and encourage their use. Powers included in many standard documents include the power to consent to or refuse treatment, to withhold or withdraw artificial nutrition or hydration, to make decisions on pain relief, to determine who has access to the patent in visitation, access to medical records and consultation with attending physicians, and to give permission for donations of organs or for autopsy. Despite these legally recognized documents, LGBT couples still may experience prejudice from health and nursing home providers. An attorney needs to ensure that doctors, caretakers, and service providers understand the client’s wishes for care and his or her nomination of agents. The attorney must be prepared to act on behalf of the client in a health emergency to be sure the client’s wishes are honored.
Including an appointment of a guardian in a medical directive is particularly important for unmarried gay couples whose families do not support their relationship. New Mexico courts will generally honor a nomination of a guardian in a health directive. If having a guardian is desirable, then consider including a guardian or conservator appointment in multiple documents: the durable power of attorney, health care directive and your will. Repeating the appointment will encourage a court to recognize the client’s choice over a possible challenge.
Careful, repetitive documentation of the client’s capacity and of his or her intent is very important. Contractual agreements and statements of intent may “save” a disposition by will, permit a trust to remain private, or enable a desired outcome to withstand a legal challenge. The formal appointment of a partner as agent and guardian or conservator in a trust, a medical directive, and a durable power of attorney may give them standing even in a hostile legal environment.
Planning for children.
One of the most difficult issues facing single-sex couples has to do with the legal relationships between unmarried or non-biological parents and their children. If there are minor children in a unmarried relationship, one of the most important tasks facing the couple is ensuring for their care and protection in the event of the death of a parent. Unless a child has been legally adopted by the non-biological parent (or by both parents) the death of a single parent could result in the child being placed with unsympathetic family members or even in foster care.
Formalizing parent-child relationships to secure children’s inheritance rights is an essential task for non-biological and non-adoptive parents, because without such arrangements, their children may be excluded from inheritance through laws of intestacy. Equally important, appropriate legally-defined relationships may enable a grown child to play an essential part in the care of aging non-biological parents. Many adult children expect to take on a caretaker role for an ailing parent when the parent’s partner is unable to do so.
In many states, unmarried heterosexual couples or same-sex couples use the co-parent adoption procedure. This procedure permits a person who shares parental responsibility for the child with the child’s biological or adoptive parent to adopt regardless of whether or not the adopting parties are married.
What’s in a family?
Every family is a real family, but sometimes the law treats different kinds of families differently. The law may not provide for the needs of partners in unmarried family relationships. Many couples choose to live together permanently outside of marriage, with or without children. A couple living together may have children from previous marriages.
A person may have a single life partner, or several persons with whom they are or have been partners. Families may include biological or adopted children of one or both partners or children from prior marriages; some individuals regard younger relations like nieces and nephews almost as if they were their own children. Individuals may wish to include close friends or former partners in estate plans along with biological family. Since laws often don’t automatically recognize these important relationships, agreements between partners and other kinds of contracts fill the gap.
What are cohabitation agreements?
Cohabitation agreements (sometimes called “living-together contracts”) are essentially contracts that contain provisions on how income and expenses will be shared and handled, children cared for, residence managed, and conflicts resolved. They should have provisions setting out terms for ending the relationship and the division of assets acquired during it. As contracts, they should be straightforward and specific and include descriptions of what is contributed by each partner to the relationship and what will remain separate.
Are there negative consequences of entering a registered same-sex relationship?
Entering into a same-sex marriage, registered domestic partnership or civil union (the last two are not available in New Mexico, which also does not recognize common law marriage) is not always economically advantageous to an older same-sex couple. Couples that habitually share income and assets are likely to find additional security through registration. Couples with children will likewise. Couples without children, who maintain property separately, who have approximately equal assets and income, or who do not intend to bequeath their assets to their partner may not wish to register, unless there is a compelling emotional or social reason to do so.
Registering a domestic partnership or other legal relationship can also involve exposure to partner’s debts, tax uncertainties, and in the event of a separation, spousal support claims. For these reasons, individuals should consider entering separate agreements covering property co-ownership and defining how property will be owned and managed before entering a domestic partnership. If registering partners have concerns about income or assets becoming part of the community, then there should be discussion prior to entering a domestic partnership about how these financial assets will (or won’t) be shared. Couples also need to determine whether oral or written agreements made before registration will be valid after registration (and in the event of a dissolution) and may need to modify such agreements to meet the legal standards for pre- and post-nuptial agreements.
What about employment benefits under domestic partnership?
Currently in the U.S., state and local government employers offer some of the most substantial benefits to domestic partners. State and local government benefits for domestic partners, in comparison to benefits offered by private employers, tend to be more encompassing and may include retirement benefits that may figure as assets in the event of a partner’s death. New Mexico is one of 17 states currently offering benefits for domestic partners of state employees, who may register as such with their employer, although the state does not have a formal registration process granting domestic partner status in lieu of marriage. However, domestic partners also need to be sure that their employer provides retirement benefits, death benefits, and health coverage after retirement.
Unfortunately, some private employers that offer domestic partner benefits to their workers provide only benefits with short-term availability such as family, bereavement, or sick leave, relocation benefits, access to employer facilities, and attendance at employer functions. However, because many employers – both public and private – regard domestic partner benefits as both cost efficient and an effective means of retaining well-qualified employees, it is likely that such benefits will be expanded in the future.
LGBT singles and couples pay the same FICA deductions as all other Americans, yet unmarried same-sex couples are unable to access the Social Security safety net when one of the couple retires, becomes disabled, or dies. Nor can unmarried same-sex couples take advantage of the ability of married couples to utilize a higher-wage-earning spouse’s record in situations where one partner has compromised their own career in order to raise children or worked while another studied. In the same way, same-sex couples that elect to dissolve a domestic partnership cannot benefit from a partner’s retirement benefits. Denial of social security benefits can hit particularly hard when children are concerned. For example, if one partner in a lesbian couple died, and that partner had worked while the other bore children and took care of the household, the children would not receive the benefits they would otherwise be entitled to until age sixteen if the couple had been able to marry.
How do you use a financial advance directive and power of attorney?
The ability to grant a durable power of attorney to a trusted agent is especially important for non-traditional couples who do not wish biological family members to serve as decision makers in the event of incapacity. An agent under a power of attorney may conduct financial affairs for the benefit of another individual, manage banking or brokerage accounts, employ caretakers, arrange for housing, make gifts and transfers, arrange for financial assistance or Medicaid and name a conservator should that become necessary. In the event of illness or incapacity, a durable power of attorney naming an agent to direct financial affairs may be needed to access the funds for medical treatment and care.
Are health care directives and powers of attorney a good idea?
Powers of attorney covering financial matters, living wills, and advanced medical directives are always appropriate. The ever-present threat of accident or illness should direct all of us to have these basic legal documents in place. A person in a same-sex marriage or partnership may have special needs for privacy, or may be very uncomfortable with an unknown physician, or may find him or herself in a care facility unfriendly to LGBT individuals. Documents that appoint an agent to make medical decisions for another, known as the health care proxy or durable health care power of attorney, are now recognized in all jurisdictions, and many states provide simple forms and encourage their use. Powers included in many standard documents include the power to consent to or refuse treatment, to withhold or withdraw artificial nutrition or hydration, to make decisions on pain relief, to determine who has access to the patent in visitation, access to medical records and consultation with attending physicians, and to give permission for donations of organs or for autopsy.
In New Mexico, a preferred guardian may be named in a medical directive, and courts are likely to honor such a nomination. Everyone should consider including such a guardian appointment in multiple documents: the durable power of attorney, health care directive and other decision-making documents. Repeating the appointment will encourage the court to recognize your choice over a possible challenge.
What about Medicare/Medicaid coverage?
Medicare is available to all persons after retirement age, covering essential hospital care and with optional additional coverage paid by the patient, physician services and some post-hospitalization home health care. Medicare Supplement Insurance may supplement the unpaid portion of Medicare.
Medicaid benefits have income eligibility criteria. Generally, they require that an elder impoverish him or herself in order to be eligible. Congress has been diligent in eliminating loopholes in the law that allowed transfers of assets that impoverish an individual for Medicaid purposes; such transfers now trigger a period of ineligibility which can last as long as 60 months.
Same-sex couples considering marriage, but who may need to access Medicaid benefits for care, need to consider whether assets acquired through marriage might disqualify an ill spouse for Medicaid benefits.
Some long-term care insurance policies are tax-qualified and benefits are received tax-free. The choice of long-term care insurance may enable a preferred choice of facility care where LGBT patients feel more comfortable, but in other respects LBGT individuals are at no greater disadvantage in the system than other patients.
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