December 29, 2003
On November 18, 2003 the Massachusetts Supreme Judicial Court ruled that gay and lesbian couples have the right to civil marriage in Massachusetts. The ruling in Goodridge v. Department of Public Health is the first of its kind in this country by a state high court.
Undeniably, the current approach by the Court has prompted much discussion in the legal community as to the effects a marriage would have on the children, assets and liabilities of the couple, among other things.
The concern is one of how do same sex couples protect their significant others, life partners, and family in the event of a death or voluntary dissolution of their relationship.
In order to allow the Legislature "to take such action as it may deem appropriate in light of (its) opinion," the Court stayed the entry of its judgement for 180 days. Thus, Legistlature has been afforded time to conform the marriage laws of the Commonwealth to the Court’s opinion. Some practitioners would argue that unless otherwise suggested by the context of the law, gender specific laws are to be interpreted neutrally, therefore, the legislature need not take any action to effectuate the Court’s decision, however, that may be a risky interpretation for same sex couples to accept and rely upon.
So how do same sex couples protect themselves, their loved ones and accomplish their asset protection and estate planning goals? Couples should plan cautiously and become aware of the options available to them to protect themselves and their loved ones in the event of an unforseen circumstance.
To begin, couples of all kinds should contemplate how to protect the assets which they possess from becoming marital property at the time of marriage to their partner. Couples must remain aware that upon a marriage all assets of an individual become assets of the couple and absent the existence of a written mutual agreement to the contrary, the distribution of marital property would be decided by the Commonwealth’s general laws in either the instance of divorce or death.
The only way to predetermine the disposition of assets of a couple who is to marry, is through the execution of an antenuptial agreement. Also known as prenuptial agreements, antenuptial agreements are used in traditional pre-marital planning for couples. Simply put, they are contracts drafted to determine the ownership of property of individuals prior to marriage and to insulate the premarital property from the spouse upon marriage. Parties can protect the assets which they are possessed of at the time of marriage from becoming part of the marital asset pool and potentially distributed to their partner upon divorce or inherited at death.
Couples who execute antenuptial agreements should be certain to prepare their estate planning documents in a manner which is consistent with the terms of the antenuptial agreements.
Regardless of whether or not a couple desires to enter into an antenuptial agreement, all couples should prepare appropriate estate plans, which should include at a minimum a Will, health care proxy, durable power of attorney, and a declaration of homestead if they own real estate.
The Will directs the disposition of a person’s probate estate which consists of property that is held in your name alone and that does not have a beneficiary designation. For couples who own property jointly that is not enough asset planning to avoid probate and to keep you from needing a Will.
In order to avoid probate and for the property to pass to the surviving joint owner, there must actually be a surviving joint owner. Upon the death of the first partner, the survivor will inherit the property outside the Will, but what happens upon the death of the surviving partner or in the event of a simultaneous death? Absent the existence of a Will to address these issues, the property will pass as directed by the Commonwealth rather than as directed by you. Among many other things, a Will allows the designation of a guardian of minor children, the selection of an executor or executrix to oversee the estate and deters claims of family members and others in contest to the asset distribution. The latter is a very powerful and helpful benefit of a Will, especially for same sex couples.
A health care proxy is a document in which you designate someone to make health care decisions for you in the event you are incapacitated and unable to make your own health care decisions. If you later become unable to make your own decisions, the person you have named will be able to step into your shoes and begin making decisions for you.
A durable power of attorney is a document in which you designate someone to make financial decisions for you. It gives authority to the person you designate to handle all of your financial decisions. For all intent and purpose, the person designated in your power of attorney can do anything you could do with regard to your finances if you were able.
Absent a health care proxy and a durable power of attorney, marriage alone will not be enough to confer the health care decision making power and financial decision making power upon one’s partner and will likely result in the need for a Guardian to be appointed to have any medical and financial decisions effected upon your behalf.
The homestead declaration is document whereby you declare real estate as your primary principal residence and the declaration when property recorded in the Registry of Deeds will protect the equity of your home from creditors or judgments that arise after the declaration was recorded up to the amount of $300,000.
In addition to the tools described here, there are many other tools that same sex couples who marry or decide to remain as life partners may avail themselves of in order to protect their assets and plan their estate. Cohabitation Agreements, Funeral Arrangements, Business Agreements such as Buy-sell and Cross Redemption agreements to name a few can be utilized to protect one’s self, one’s partner and to accomplish one’s lifetime planning goals.
Julie A. Dialessi-Lafley, Esquire is a multi faceted attorney with the law firm of Bacon & Wilson, P.C. who focuses her practice areas in business law, real estate, estate planning and administration and family law.
by: Julie A. Dialessi-Lafley, Esq.