Estate Planning is Crucial for Same-Sex Couples

/ September 13, 2011

bouquet of flowers - iStockAnyone who attended a Twin Cities Pride event this summer can attest to the vitality of Minnesota’s gay, lesbian, bisexual, and transgender (GLBT) community. The turnout and support for the GLBT community proved Minneapolis deserving of the honor, “Gayest City in America,” bestowed on the city earlier this year by The Advocate. As an estate planning attorney with an office overlooking Loring Park—site of the first local GLBT march, in June 1972, and current site of the Twin Cities Pride Festival — I was struck by the reality that, despite a thriving GLBT community, Minnesota has a framework of estate planning laws hostile to same-sex couples. This unfortunate fact makes estate planning critical for all same-sex partners wanting to provide for each other on death.

History

The legal framework currently in place is a product of a regrettable history of hostility towards same-sex couples under Minnesota law. An abridged history follows:

1971: The Minnesota Supreme Court addresses the issue of same-sex marriage in Baker v. Nelson, holding that the Minnesota Statutes prohibit same-sex marriage.

1977: The Minnesota Statutes are amended to state that marriage is “between a man and woman.”

1997: Minnesota enacts the Defense of Marriage Act (DOMA), specifically prohibiting “marriage between persons of the same sex.”

2010: Following in the footsteps of Varnum v. Brien—the 2009 Iowa Supreme Court decision effectively legalizing same-sex marriage in Iowa — three same-sex couples file a lawsuit in Hennepin County District Court, arguing that Minnesota’s ban on same-sex marriage violates due process, equal protection, and freedom of association rights; the court eventually dismisses the suit. In addition, the Final Wishes Bill — seeking, among other things, to provide equal rights to same-sex partners to determine the final disposition of a deceased partner’s remains — is presented to Gov. Pawlenty to be signed into law; Gov. Pawlenty subsequently vetoes the bill stating that the law is unnecessary because it addresses a non-existent problem.

2011: The Minnesota House and Senate pass a bill proposing an amendment to the Minnesota Constitution stating that marriage is the union of one man and one woman; the amendment, which cannot, by law, be vetoed by Gov. Dayton, will be put to a vote in the 2012 election.

Notwithstanding the intense sociopolitical debate on the issue of spousal rights for same-sex couples — which transcends the scope of this article — every estate planning lawyer in Minnesota knows the current legal framework presents a real problem to same-sex partners wanting to provide for each other on death. The crux of this problem lies in the default rules for dealing with the event of death under Minnesota law.

Intestacy

Intestacy laws are a set of default rules dictating who will receive your property if you die without a valid Will. The possible recipients are set forth in a certain order of priority. Under the intestacy laws of Minnesota, your spouse, if you have one when you die, will receive top priority. If you are leaving behind a same-sex partner, however, your partner will not enjoy this same priority. This is true regardless of how many years you and your partner spent together, how devoted you were to each other, and whether you were lawfully married in another state — Minnesota law prohibits marriage between persons of the same sex and does not recognize these marriages from other states.

So…what priority will your same-sex partner receive if you do not have a valid Will when you die? The unfortunate answer is that no priority whatsoever exists for a surviving same-sex partner under Minnesota law. In fact, under intestacy laws, the State of Minnesota is more likely to receive your estate than your surviving same-sex partner. Although an intestate transfer to the state, known as “escheat,” is extremely rare in modern times, it is at least a possible scenario under the intestacy laws of Minnesota. The same cannot be said regarding intestate transfer to a surviving same-sex partner.

Final Disposition

The laws regarding “final disposition” are default rules that, among other things, dictate who can make decisions about your human remains — e.g., whether your body will be buried or cremated and where your body will be buried or your ashes spread. If you are in a same-sex relationship and die without a valid Will, health care directive, or other accepted legal document stating otherwise, all of the following persons, among others, will have default legal priority over your surviving partner to decide the final disposition of your remains:

  • Your spouse — i.e., to the extent you married an opposite-sex partner and never divorced or legally separated;
  • An adult child or the majority of your adult children;
  • A surviving parent or both surviving parents with equal authority;
  • An adult sibling or the majority of your adult siblings;
  • An adult grandchild or the majority of your adult grandchildren;
  • A surviving grandparent or your surviving grandparents with equal authority; and
  • An adult niece or nephew or the majority of your adult nieces and nephews.

Although Minnesota laws regarding final disposition and intestacy are meant to establish generally acceptable defaults for dealing with the event of death, the hostility towards same-sex couples embedded in Minnesota law renders these defaults generally unacceptable to those in devoted same-sex relationships. The same can be said for Minnesota laws regarding appointment of a personal representative.

Appointment of Personal Representative

A “personal representative” is the person most know as an “executor.” The role of personal representative is an important one, because the personal representative manages and administers the estate. Depending on the particular case, the personal representative has powers analogous to that of a Chief Executive Officer of a company. Similar to Minnesota laws regarding final disposition and intestacy, absent a valid Will or other accepted legal document, a surviving same-sex partner has no priority whatsoever for appointment as personal representative under Minnesota law. This is astonishing given that Minnesota law even provides a priority status to creditors.If the significance of this is not apparent, consider the following scenario:

You have been in a devoted same-sex relationship for years. You have lived in the same residence as your partner and have acquired personal property used by you and your partner on a daily basis—e.g., furniture, electronics, automobiles, etc. You die without leaving a valid Will.

Under this scenario, not only will your surviving partner not have any rights to your property or to make decisions regarding your final disposition—under Minnesota laws regarding intestacy and final disposition, respectively—but a third party, perhaps a relative who did not support your same-sex relationship or even a creditor who cares only about getting paid, may be given the authority to manage and administer your estate against the wishes, and to the detriment, of your surviving partner.

Other Concerns

Unfortunately, I have introduced only some of the ways the current legal framework in Minnesota can negatively impact same-sex partners who want to provide for each other on death but who have not engaged in estate planning. Other concerns include but are not limited to:

  • What authority will your partner have to make medical decisions, including end-of-life decisions, on your behalf if you are unable to do so for yourself?
  • What authority will your partner have to decide where you live and receive medical care if you are, likewise, unable to do so because of incapacity?
  • What authority will your partner have to deal with your finances if you become unable to do so?

Positive Notes

If you are in a same-sex relationship, you may be feeling a little frightened, a little depressed, or even a little angry about the inequities of Minnesota law, and rightly so. You may find some consolation in knowing that you can tackle and, to some extent, overcome these inequities through estate planning. You can employ beneficiary designations, Wills, health care directive, powers of attorney, transfer-on-death deeds, and other legal instruments to establish, with clarity and legal authority, your intent to provide for your loved ones. Of course, the effect of Minnesota law on you and your loved ones in the event of death depends entirely on the facts unique to your situation. An estate planning attorney can help you navigate these sometimes murky waters and enact a plan to provide for loved ones after you are gone.

On a positive note, it should also be noted that the law tends to be a lagging indicator of social mores. The existing legal framework of estate planning laws in Minnesota is no exception. The majority of Americans believe that society should be accepting of same-sex relationships,and, likewise, evidence shows that the overwhelming majority of Minnesotans believe same-sex couples should be treated no differently under the law. These beliefs are well-represented in the employment policies of many private-sector employers in Minnesota. Over 290 Minnesota employers offer some form of domestic partner benefits. Of the Fortune 500 companies based in Minnesota, 70 percent offer their employees domestic partner benefits.These companies include the following pillars of industry: 3M, Ameriprise Financial, Best Buy, General Mills, Medtronic, Target, US Bank, and Xcel Energy.

There are many indicators, nationwide, to suggest that the slow-moving ship that is the law is starting to turn toward GLBT equality. Until Minnesota law legally validates same-sex relationships, however, planning for your loved ones is critical.