07/01/2013
The implications of the Supreme Court's decisions on gay marriage will not be entirely clear for a long time. There are some meanings that we do already know, though:
· Couples who are married under the law of any state or nation will have their marriages recognized by the federal government. As a result, those couples will be entitled to the benefits that flow to married couples.
· There are several major federal benefits which will very quickly benefit same-sex couples. One such benefit is Social Security spousal and survivors’ benefits.
· Spouses of Federal employees will have access to spousal employment benefits. It is very common for us to see couples in which the federal employee is paying for family health insurance benefits but his or her spouse has to pay $400 or $800 per month for his or her own health insurance. That spouse will be able to be covered immediately.
· Many people will find that their taxes will decrease as a result of being able to file jointly. But more people, sad to say, will find that their taxes will inch up a bit. Therefore, you may want to have your tax advisor attempt to calculate whether your combined tax burden would increase or decrease if you filed in a married category.
But there are some cautions:
First, do not take any precipitous steps. For example, if in you exuberance to gain “free” health insurance coverage through your spouse’s family plan you immediately terminate the coverage under your own plan, you may be horrified to learn that you will not be able to be covered. You may not be able to join your spouse’s plan without a “qualifying event”.
Second, it likely will long be the case that same-sex couples having children will have to continue to use second-parent adoptions to secure sound parental rights. While DC has a law recognizing a same-sex spouse as the parent of a child born to her wife, that merely creates a rebuttable presumption. That presumption, for a heterosexual couple, can be buttressed by a DNA test, but no such option is available for the same-sex couple. As a result, and in view of the still-rocky landscape, same-sex couples will have to continue getting second-parent adoptions.
Third, there will be some drawbacks as well as benefits. For example, the Federal Adoption Tax Credit has been a major boon to gay couples who have used it to finance the cost of second-parent adoptions. I spoke with the IRS manager who wrote the Tax Credit regulations and is the nation’s expert in that rule, and she advised me that the IRS has consistently taken the view that because gay couples cannot be recognized as married under federal law, the exclusion for step-parent adoptions does not apply to gay couples. Of course, with this change in law, it is highly likely that the federal adoption tax credit will no longer be available to a gay married couple in which one spouse seeks to adopt his or her spouse’s (biological) child.
Another drawback will arise in the area of Medicaid planning. This change in law will affect gay couples of all ages (which should be obvious based on the circumstances that gave rise to the lawsuit). One of the most important tasks an older couple can do is to evaluate their preparedness for paying for long-term care. At $100,000 to $150,000 per year for nursing home care, older people must think very carefully about their ability to pay. Often-times, divesting oneself of assets can make one eligible for Medicaid payment of long-term care. Gay couples have long had a bit of a step up in this regard because the spouse of a person needing long-term care has always been considered to be a legal “stranger” to the person needing long-term care. That immediately goes away.
Many of our clients have been asking us for advice in all of these areas already. I think that it is fair to say that it is just too early to give anyone much concrete advice. How the federal government implements these decisions and how states respond to the increasingly positive legal landscape for state recognition of same-sex marriage will have a lengthy and rippling effect. We are counseling people to wait if possible.
But there may be circumstances in which you should not wait. For example, if your spouse passed away and you filed an estate tax return for your spouse’s estate with the result being the payment of state or Federal estate taxes, you may be able to amend that return to claim the marital deduction and recover those estate taxes. As a general rule, amended returns must be filed within three years of filing. If you fear that a deadline of that sort is approaching, or other pressing circumstances exist, you may not want to wait.
By the way, there are several lawyers and law firms which have been serving GLBT families for many years. (I am thinking specifically of Michele Zavos’ firm and Sue Silber’s firm, in addition of course to my own.) Even though many other law firms serve many GLBT clients, I think that the legal landscape for GLBT families remains adequately distinct that GLBT persons should continue to favor firms with a proven record of serving GLBT families. I believe that this dynamic will change at some point, but I don’t think that we are there yet. While this may appear just to be self-interest, it really is based on my honest assessment.
Finally, please remember that this is general information. If you wish to receive advice based on your specific circumstances, talk with a lawyer!