Welcome to Pride 2025…Or Stonewall Pt 2
I’ve been writing and speaking on LGBTQ+ rights as they intersect with estate planning and otherwise since the inception of my firm. (It’s related to my lawyer origin story.) In fact, serendipity had our firm launch on the day Illinois passed the Civil Union Act, on June 1, 2011. Then, in 2015, the U.S. Supreme Court ruled for marriage equality in Obergefell v. Hodges. Still, that ruling was a plurality, which means it could be readily overturned if the Court agrees to hear another marriage equality case, that is founded on a different and novel legal argument. Perhaps reading the tea leaves or understanding the direction of the Court, in 2022, former President Biden, signed into law the Respect for Marriage Act. The law undergirded interracial marriage, repealed the infamous DOMA, and required states with mini-DOMAs to respect same-sex marriages if the couple was married in a jurisdiction that provided same-sex marriages. So, same-sex marriage is safe, right? DOMA was signed into law in 1996 by former President Bill Clinton. The law defines marriage as a union between one man and one woman. Technically, same-sex marriage is safe, but the benefits that accompany marriage are still governed by state and federal law and the doctrines supporting states’ rights are more popular now and the Supreme Court has a different composition than it did in 2015. The results: second-parent adoptions for same-sex couples are being sought more now than ever in addition to amended estate plans that protect LGBTQ+ couples regardless of their domicile; and any other protections that can be provided by law. It is unfathomable the reverse course that LGBTQ+ rights are confronting, but the Stonewall Generation doesn’t forget. So, Welcome to Pride 2025. On September 30, 2022, the U.S.’s Financial Crimes Enforcement Network (FinCEN) issued its final rule on Beneficial Ownership Information Reporting Requirements, mandated by the Corporate Transparency Act (CTA). The rule aims to combat money laundering and terrorism by collecting and maintaining Beneficial Ownership Information (BOI) for U.S. businesses. It addresses the use of corporate structures, such as Limited Liability Companies (LLCs) by illicit actors and aligns with international efforts to combat unlawful activities. The rule outlines reporting requirements, including who must report and the violation consequences that are costly (like $500/day!). The current U.S. framework for combating money laundering and terrorism has shortcomings, making it attractive for illicit actors to create hidden shell companies. The final rule requires new covered businesses to submit timely BOI reports to FinCEN within 30 days of establishment. Existing businesses have until January 1, 2025, to submit their initial reports. Accuracy and updated information are emphasized. Reporting companies must include specific information in their initial reports, such as legal name, trade name, address, jurisdiction of formation, and EIN or TIN. They must also provide details of each beneficial owner and company applicant, including full names, dates of birth, addresses, unique identifying numbers, and images of identification documents. Corrected and updated information must be reported later. The final rule defines a “beneficial owner” as an individual who exercises substantial control over the reporting company or who owns at least 25% of the company (ownership interest). Exceptions to the definition include minor children, nominees, intermediaries, custodians, agents, employees, individuals with future inheritance interests, and creditors. If no exceptions apply, beneficial owners can be identified based on substantial control and ownership interests. The rule provides indicators of substantial control and clarifies the definition. Businesses must determine if they are considered reporting companies for purposes of the final FinCEN BOI rule. Domestic reporting companies include corporations, LLCs, or entities created by filing documents with a secretary of state or similar office. Foreign reporting companies are entities formed under foreign law and registered to do business in a state or tribal jurisdiction. The rule does not add exemptions beyond the 23 specified in the CTA. Companies must also determine the extent of their reporting obligations and maintain a record of changes in company applicant information. The definition of a company applicant is limited to one or two persons. Additionally, existing companies are exempt from providing applicant information, but new companies must comply. Complying with the final rule may be challenging, because it involves analyzing multiple individuals with ownership interests and substantial control. FinCEN has not imposed limits on the number of beneficial owners to be reported to create a comprehensive database. Small businesses may benefit from legal counsel to navigate and comply with these measures.
DEI and Estate Planning: The Economic, Non-Business Case, Imperative
National Estate Planning Awareness Week has come and gone. But it was busy! I presented LGBTQ+ estate planning tips and a helpful loophole to members of the Dramatists Guild. Next, esteemed panelists and I shared thoughts about diversity and inclusion and the wealth gap in the context of the estate planning profession. Then, there was the usual stuff, non-stop. Estate planning loophole, you ask? Yes, there is for unmarried couples of certain ages with retirement assets. Contact us to learn more. Diversity & Inclusion and the wealth gap in estate planning, you ask? Yes, for me and our firm, diversity’s moral imperative is a given. Yet, there’s an economic imperative beyond the business case: To be successful in the U.S., one must be financially successful, which means be gainfully employed so that you can enjoy a comfortable living. Appropriate DEI initiatives in the estate planning profession, a profession traditionally dominated by old, white guys, address not just the mythical pipeline issue but compensation and retention issues, which ultimately address the wealth gap. Thus, it’s an economic imperative for estate planning firms to be authentically diverse and equitable and inclusive. (Read: Diversity is not just on our website or in support but front and center in our firm\’s planning professionals and we\’ve been this way since day one.) Mythical pipeline issue, you ask? Yes, but we’ll save that discussion for another day.
ABA to Judges: Obergefell Is Still the Law
FACTS. Judge Vance Day, an Oregon judge, was appointed to the bench in 2011 and, upon appointment agreed to solemnize weddings. Judge Day was re-elected to the bench in 2012. In 2014, Oregon overturned its constitutional ban on same-sex marriages. Shortly thereafter, a judicial clerk and assistant asked Judge Day whether he would perform same-sex marriages because of the judge\’s view that marriage was only to occur between one man and one woman. In response to that question, Judge Day created a screening process whereby if he was asked to perform a marriage, his staff was to try to ascertain whether the couple were a same-sex couple. If the couple were a same-sex couple, then the staff was instructed by Judge Day to tell the couple that the judge had a scheduling conflict. If the couple was straight, then the staff could schedule the ceremony. There was only one incident in which the screening took place and a same-sex couple was identified. And on that occasion, Judge Day had a legitimate conflict. ANALYSIS. Judge Day’s behavior was brought before the Oregon Commission on Judicial Fitness and Disability and he was charged with violating a Judicial Rule of Conduct. Judge Day argued that he had not discriminated against any known parties so he could not be reprimanded. The Commission disagreed, explaining that performance was the low bar for judges and that the additional bar judges must abide by is the appearance of impartiality. Judge Day then contended that because his screening process was internal, the appearance of impartiality was sustained. Wrong. The staff knew what he was doing and so he failed that test. The Formal Opinion explained 2 of the cardinal rules of judges’ conduct are to (1) perform their duties impartially and (2) not promote or appear to promote favoritism for certain classes or segments of society. To follow these rules, judge must not evince bias based on “race, sex, gender, religion, national origin, ethnicity, disability, age, sexual orientation, marital status, socioeconomic status, or political affiliation.” And this is an in-exhaustive list. CONCLUSION A judge who performs marriages for opposite-sex couples cannot refuse to perform marriages for same-sex couples. The Formal Opinion even hearkened back to Obergefell v. Hodges, explaining that Obergefell is still the law and the Model Rule of Judicial Conduct requires judges to comply with the law. The Formal Opinion did acknowledge the fact that the Obergefell and infamous Masterpiece Cakeshop decisions considered the issue of deep convictions regarding the concept of marriage. BUT, the Formal Opinion, concluded judges are officers of the law beholden to the model rule. Either marry all or none.
Love Knows No Discrimination… aka Marriage Equality Snakes Pt 3
In the springing steps of new love, newlyweddedness, and newborns, we become absorbed with, like my spouse likes to say, the “bubble and squeak” of it all. And as the bubbles grow fewer and the squeakiness turns to creakiness in the golden and platinum years, we start to plan our farewells and what that should look like in honor of our loving relationships. That planning is sometimes truncated by accelerated medical challenges but more often than not, the planning is executed without much challenge. Loved ones are able to celebrate the dearly departed in dignity and honor and friends and family join in the celebration and do what they can to console and uplift the grieving. That is, this is the farewell achievable for couples who resemble couples of 40 years ago. For LGBTQ couples, who are even lawfully married, post Obergefell, planning farewells is often not that easy. The heartbreaking story of Jack Zawadski and Bob Huskey illuminates this additional post-Obergefell challenge: Jack and Bob were a loving couple of more than half a century. Upon retirement, they moved from Colorado to Mississippi and were married in 2015, shortly after the Obergefell ruling. Before moving to Picayune, Mississippi, Bob was diagnosed with a cardiac condition that worsened to the point that, ultimately, during the last few years of his life, Jack became his caregiver. A year after marrying, the couple acknowledged that Bob’s death was imminent. He was eventually placed in a nursing home near the couple’s community in Picayune. So Jack could focus on his last days with Bob, John, Bob’s nephew and dear friend of the couple, took on the responsibility of searching for a funeral home that could provide services in Picayune. Services in their community meant Bob’s body would not have to be transferred far and the couple’s friends and family could focus on helping each other through the grieving period. Searching online, John found the Brewer Funeral Homes. He contacted the Funeral Home and entered into a verbal agreement with the owners, Ted and Henrietta Brewer, for their services. The parties agreed to price, logistics of signing the paperwork, transportation of the body, and disposition of remains. The Brewers told John that they just needed the nursing home to contact them when Bob died and everything would be properly handled. The funeral home’s paperwork required the signature of next of kin. Bob died and Jack signed the paperwork as surviving spouse. When the Brewers received the paperwork indicating Jack was next of kin as surviving spouse, that they would be servicing a gay couple, they absolutely refused to provide the agreed upon services. John eventually found services 90 miles away. However, Bob’s body had to be moved from the nursing home before that service was available, so another funeral home was required to be involved to “hold” the body. Furthermore, because everything was last minute and far away, friends from Picayune couldn’t attend the services. Needless to say, this is not what Jack and Bob had wanted. So Jack and John sued the funeral home, alleging Intentional Infliction of Emotional Distress, Negligent Infliction of Emotional Distress, Breach of Contract, and Negligent Misrepresentation. Unfortunately, Jack died in December of 2017 and a petition was filed to substitute John as a plaintiff. Then Masterpiece Cakeshop was decided… However, another case was decided a few days after Masterpiece Cakeshop that may have truncated its reach and another legislative attempt to undermine the rights of LGBTQ families was recently thwarted. So, more to come. For now, we hope that people realize that estate planning isn’t just about getting valid instruments in order, especially if your family doesn’t resemble the other 80% of American families. This is the third part of a series, Marriage Equality Snakes, examining jurisprudence that undermines the rights of LGBTQ couples to marry and have families. Part 1 ~ Part 2
So Like, What Is It with Using Children? AKA Snakes Pt. 2
Continuing our examination of challenges to marriage equality, let’s consider the D.C. case, Marouf v. Azar, where the issue is whether the federal government, on the basis of religious freedom, violated the Constitution by using taxpayer dollars to fund services that discriminated against lawfully married persons. Two lesbian, married couples, and federal taxpayers have challenged the federal government because part of their tax payments (actually part of all U.S. taxpayers\’ dollars) is used to fund programs that discriminate against them with respect to adoption and foster parenting. Most readers probably know by now, because of recent events, that the federal government provides care to refugee children who reach the U.S. without a parent or legal guardian; the care is provided via the Unaccompanied Refugee Minor Program. The government further provides assistance to children who arrive without a parent or legal guardian and have no legal status through the Unaccompanied Children program. Homeland Security initially seizes children in both programs and transfers them to the Office of Refugee Resettlement program (ORR), which is governed by the U.S. Health and Human Services Department (HHS). ORR then places the children in foster homes or with adoptive parents and provides other care through religious organizations such as the organization at issue in this case, the United States Conference of Catholic Bishops (USCCB). The USCCB openly denounces LGBTQ persons and families because of the organization’s religious doctrine and clearly provides this denunciation in its application for funding from the federal government. Yet, ORR provides grants comprised of taxpayer dollars to the USCCB despite the organization\’s discriminatory policy and, in so doing, violates its parent agency’s – HHS’s – grantmaking rules because HHS follows the law settled by Windsor and Obergefell. One couple, Fatma Marouf and Bryn Esplin, and filed a lawsuit based on these facts after they tried to apply for adoption through USCCB and, during a telephone interview, were denied the opportunity to continue the application process. Fatma and Bryn were told that they were unsuitable because their family did not “mirror the holy family” and thus, were unqualified to foster parent or adopt. In response to this clear discrimination by an organization funded by the federal government, as of February 2018, Fatma and Bryn are seeking redress alleged violations of their rights under the Establishment Clause, the Equal Protection Clause of the Fifth Amendment, and the Substantive Due Process Clause under the Fifth Amendment. Really…what is it with keeping children from being loved by lawfully, married couples?
The Snakes Surrounding Marriage Equality, Pt. 1
We would usually post a rainbow or something uplifting for PRIDE, but this month, we\’ll leave rainbows for the parade… Because, ironically, as we celebrate PRIDE 2018, the LGBTQ community is facing an erosion of rights established by long and hard-won battles. So, as I join the community in celebration, I also underscore the “not quite” response I gave to colleagues, who, when Obergefell v. Hodges was decided, quipped that the LGBTQ community\’s issues with respect to discrimination were primarily over. Like so many groups that continue fighting discrimination – explicit and implicit, the LGBTQ community will score one victory against the venomous discrimination snake just to see the head of another emerging from its hole. Furthermore, because several respected institutions that once stood for “justice for all” are now politicized and fractured, I recently shared analyses of the marriage equality jurisprudence post Obergefell to emphasize that discrimination against LGBTQ families and individuals is still rampant: Post Obergefell Challenges: First Amendment Constitutional Claims When I first read the Masterpiece Cakeshop pleadings, the short hairs on the back of my neck stood up. And as I presented this case the morning of June 4, lightning struck those hairs as my concerns, unfortunately were shown to be well-founded. The issue in Masterpiece Cakeshop, Inc. v. Craig and Mullins was whether an exception in Colorado law prohibiting sexual orientation discrimination could be made because of a business owner’s religious beliefs. That discrimination against customers should be illegal is a no-brainer, right? Well… Jack Phillips, owner of Masterpiece Cakeshop, refused to make cakes for LGBT couples because of his religious beliefs. LGBTQ couples filed a complaint against Phillips with the Colorado Civil Rights Commission, arguing that Phillips’s refusal to bake cakes for the LGBTQ community violated Colorado’s state law that prohibits discriminatory action based on sexual orientation. Phillips’s response was audacious: Instead of denying his actions were discriminatory, he asked that his behavior as a business owner in the marketplace be excused because his business was small and too inconsequential for the State to be concerned with. Phillips’ overall contention amounted to a legal, ‘so what?’ The couples disagreed with Phillips’s minimalist argument, responding that (1) the discriminatory action has been illegal since the 1960s; and (2) Phillips’s religious beliefs could not be allowed as a basis to create an exception because the history of intolerance based on religion illuminates the horror such unfettered intolerance has wrought. The Commission found in favor of the couples. Score one for the good guys. Phillips, of course, appealed. On appeal, the couples’ brief explained how debate has continued regarding religious beliefs and discriminatory action but the law was clear: Action such as Phillips’s was illegal in the marketplace. Also, Phillips’s contention the State’s interest was marginal was bunk because Colorado has thousands of LGBTQ residents and families, despite the fact that Colorado has a storied history with respect to its discrimination against the LGBTQ community. Yet, even setting that fact aside for the sake of argument, the additional fact that the commercial marketplace must be open to all, free of discrimination, still remains. Business owners’ religious beliefs should not determine the sales strategy of a for profit, commercial enterprise. To allow such discriminatory action would undo more than 50 years of precedence. The Colorado Appellate Court agreed. Score two for the good guys. However, one could already see the snake tracks of discrimination heading toward LGBTQ rights after the Hobby Lobby decision was announced in light of Windsor. In Burwell v. Hobby Lobby Stores Inc., the U.S. Supreme Court examined 2 for-profit, closely-held corporations’ claims that the Religious Freedom Reformation Act’s mandate to provide healthcare, including access to contraceptives, violated the corporations’ First Amendment and statutory rights to freedom of religion by forcing them to provide health insurance coverage for abortion-inducing drugs and devices, and related education and counseling. The Court, taking a bite at women’s reproductive rights – or more broadly, individual rights – ruled in favor of the corporations. The Roberts Court is becoming known for its narrowly drawn Opinions, such as the Hobby Lobby decision, addressing one part of a case, while ignoring another. So, when deliberating Masterpiece Cakeshop, the Court’s majority, as I feared, slid in discrimination, couched in religious freedom, by focusing not on the Appellate Court\’s review but on the Colorado Commission’s hearing. During the Commission’s hearing, hearing officers deliberated aloud, indicating they held a bias in favor of business persons keeping their religious feelings to themselves when serving the public in commercial settings, comments that the Court reasoned undermined Phillips’s Due Process rights. Remarkable! Phillips admitted he discriminated and so what; hearing officers rebuke this lack of respect for equality that is – or was – the law; and the U.S. Supreme Court glides past the fact that the Appellate Court’s decision was reviewed according to all the facts and law notwithstanding the Commission’s hearing, used the hearing officers’ vocal comments made in a public hearing, comments steeped in a half-century of law, to actually weaken that half-century jurisprudence. The day Masterpiece Cakeshop’s ruling was announced, legal analysts shouted over the airwaves that the decision was not very meaningful because it was decided narrowly. However, Plessy v. Ferguson was also decided on narrow grounds and has yet to be expressly overturned. Also, as Justice Harlan explained in his dissent in Plessy, the U.S. Supreme Court is the final arbiter of American law and its rulings, broad or narrow, affect laws and public policies for decades if not centuries. The majority Opinion also slipped in a state’s rights argument allowing for “outcomes for cases like this” to be decided by other courts, thereby creating a vein through which discriminatory, poisonous actions can run through our country with little impediment or cure. And so marches for equality must continue until celebrations can be fully enjoyed, without fear of snakes paralyzing equality jurisprudence. Snakes, Pt. 2 – About the Children…
Revisiting We ALL Do…
June is PRIDE month and to celebrate…all month long, we\’re revisiting the one of the most important decisions for our friends, family, and clients in the LGBTQ community: Obergefell v. Hodges, which gave the community marriage equality. To start things off, let\’s consider the 4 \”principles and traditions\” the Supreme Court of the United States used to justify its Opinion and, thus, marriage equality: \”Individual autonomy\” encompasses the right to decide who one will marry. See Loving v. Virginia. And in case you\’re wondering, \”individual autonomy\” is legalese that underpins the Declaration of Independence, the instrument that declares individuals free to pursue happiness. The union of marriage is a fundamental right because the intimacy of the marital union is unique and depriving same-sex couples from the recognition and protection of that intimacy is wrong. Marriage equality helps protect the emotional stability of children borne or adopted into same-sex marriages, by equalizing their families with heteronormative families. Marriage is one of the bases of America\’s social and legal order. Depriving same-sex couples from enjoying the benefits of marriage, which includes social stability, would be \”demeaning. Individuals must be free to pursue happiness. That happiness can be found in the remarkable closeness of the marital union. Generally, children are the fruit of marriages and children must be protected because they represent the future. Thus, marriage is a societal bedrock in which most adult individuals must be able to participate. Sounds simple, but it took us almost 50 years to get here.
The Wait Is Over: All Americans Are Free to Wed
In a plurality Opinion authored by Justice Anthony Kennedy, today, June 26, 2015, the United States Supreme Court ruled in favor of marriage equality for the country. Removing any doubt that states that did not support same-sex marriage would be able to continue to discriminate against LGBTQ couples, in Obergefell v. Hodges, the Court provided that states must (1) recognize same-sex marriages that were lawfully performed, even if outside of their states and (2) states must issue marriage licenses to same-sex couples. Accordingly, if a state did not recognize or did not provide for same-sex marriages before, it must do so now. The Court’s rationale for its ruling considered 4 principles: (1) personal choice; (2) the status of marriage; (3) the protection of children; and (4) the stability of America’s social order. This 27-page Decision downloaded here, followed by 76 pages of dissent, is based on the fundamental right to marry, which is undergirded by the Equal Protection Clause and the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. The holding is as eloquent as it is just: “No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.” The 62 pages of dissent begins with Chief Justice Roberts, who argues that the acceptance of marriage equality will be much more difficult to achieve because of those who were and are against marriage equality will be chaffed by the fact that their opinions are now irrelevant in the eyes of the law. He analogizes the coming “cloud” over marriage equality to that of the cloud over racial equality. It is a point well taken but, respectfully, the Chief Justice is ignoring the fact that a long-standing responsibility of the Court is to provide equality in the law where inequality exists for those who have been marginalized. The fight for social recognition, of course, is not over. However, being equal with respect to the law does not require social acceptance. Justice Scalia argues that America’s democracy is now in jeopardy. His dissent is not unusual in that he disagrees with the Opinion on the grounds of Constitutional literalism and states’ rights. It is unusual in that he equates the Court with God but then states that the Court, or the 5 activist judges comprising the majority in this Decision, is acting out of hubris. His opinion that 135 years of precedent has been overturned is quite remarkable, itself. Justice Thomas is also in his usual form, reiterating Justice Scalia’s remarks but offering for good measure a nod to the Magna Carta that just celebrated its 800th anniversary and the philosopher John Locke. The final and most brief dissent, authored by Justice Alito, is a rejection of the new norm or “orthodoxy” as J. Alito terms it. Notwithstanding the dissents, as C.J. Roberts stated, the argument – at least legally – is over; and to quote J. Kenned, “It is so ordered.” We do.
What If I\’m Neither: More Non-Financial Planning Pointers for Transgender & Queer Persons
This is the 5th in our segment on estate planning for the T & Q of the LGBTQ Community… Most people will agree that family battles are what make estate planning “sexy.” Forget about the smart tech wizards who create subtrusts and the stability that goes with it; Philip Seymour Hoffman’s story, may he rest in peace, is much more interesting. However, squabbles – or wars – in families of straight married couples may benefit on settled law and when the legal issue is murky, experienced judges are readily available. Neither settled law nor experienced judges are generally available when addressing family dynamics for transgender or queer couples. So, a transgender or queer person’s first line of defense against contentious family members is their trusted advisors. Attorneys must be able to identify potential conflicts of interest and manage confidentiality with aplomb. Conflicts of interests involve understanding who our client is, e.g., are we representing Dana as an individual or Dana and Chris as a couple. Equally, if not more important is the issue of confidentiality. What information have we been given permission to disclose, to whom, in what manner, and when. For example, can Bobbie’s mom know that Dana was born male? The employer? The children? With respect to a will or trust, below are a few key concerns in light of family dynamics. Disinheritance. Family members who are contentious can always be written out. Fiduciaries. Would you want a family member who has always been a tad combative acting on your behalf? Digital assets. Only close loved ones should have access and control to the digital assets, especially personal email and social media accounts; otherwise, such assets should probably be deleted or destroyed. It’s nobody’s business when Dana or if Dana had sexual reconstruction. As with all testamentary documents and trusts, the critical administrative provisions are also critical areas where instructions should be included with respect to communicating information, fiduciary selections, and more. Another broad category under non-financial considerations is lifestyle intentions, i.e., travel and retirement in particular. Again, the overall issues are similar to straight married couples. However, the nuances are what distinguish planning for straight married couples from planning for transgender or queer couples. For example, today’s society is very mobile and clients are becoming more informed about a little of what we do, which is dangerous, especially if they don’t consult local lawyers about what they have learned. So, when considering lifestyle intentions and non-financial estate planning considerations, planning should include the following considerations. Vacations. Vacations should not be ruined because, while being treated for an allergic reaction, the client’s spouse can’t visit them. Relocation from Illinois or Cook County to an unfriendly jurisdiction. Though this may not be necessary, soon. Perhaps employment, grandchildren, or retirement has provided a desire to move. While many attorneys are only licensed to practice in one or two jurisdictions, any lawyer serving the LGBTQ community on issues related to family should have a thorough understanding of the national jurisdictional landscape with respect to marriage equality. For example, what does the jurisdiction say about children of married couples who are not adopted; what is the landscape for transgender rights? Does the retirement community or municipality to which the client plans to retire or visit as a snowbird provide healthcare treatment for transgender or queer persons? Is the community friendly to transgender or queer elders? The more unfriendly the jurisdiction, the more “right and tight” as Justice Ginsburg says the estate plan must be for those who travel or plan to relocate but retain property in Illinois, and especially for transgender and queer persons. Estate Planning for the T&Q of the LGBTQ Community: Part 1 | Part 2 | Part 3 | Part 4 | Part 5
What If I\’m Neither: The Dual-Track Agency Dance
In our first article in this series, unlike Illinois law, we alluded to how Windsor created tricky issues for the LGBTQ community to navigate with respect to marriage. The Illinois Marriage Fairness Act embraces the entire LGBTQ community, whereas Windsor does not. Okay, but what does this mean? Part of the Windsor decision required action by the IRS, which resulted in the IRS passing Revenue Rule 2013-17 (“Rev. Rule 2013-17” or “Rev. Rule-17”). The rule stated that the agency never gave much, if any, meaningful consideration to gender; so, since the Court in Windsor required IRS action, the agency the IRS mandated that, post-Windsor, its rules and regulations governing all taxation applicable to heteronormative (“straight”) married couples would also apply to lawfully same-sex married couples. Additionally, the IRS announced that it would use the “place of celebration” standard when reviewing its matters with respect to married couples. Finally, the agency strongly suggested that other federal agencies, especially those whose benefits were governed by IRS rules and regulations, to follow suit. However, many federal agencies that used male and female descriptors in definitions involving marriage didn’t recognize same-sex marriages before Windsor. So, post-Windsor, a number of federal agencies decided that, like the IRS, they were required to abide by the Supreme Court decision for lawfully married same-sex couples, the agencies were not required to use the same standard of review for determining benefits as the IRS and the Court would not disagree, per another seminal Supreme Court case, Chevron. Therefore, many agencies decided to use the “place of domicile” standard instead. Explaining the \”standards\” Place of Celebration: Same-gender marriages are recognized as legal as long as the place where the couple was married provides legal same-gender marriages. An agency that uses this standard will recognize your marriage even if you live in an unfriendly state. Place of Domicile: The same-gender marriage must be legal where the married couple resides. Ergo, if the couple was married in Illinois, which provides same-gender marriages, but lives in Florida, an unfriendly state that does not recognize same-gender marriages, then an agency using this standard will not recognize the marriage as legal. The dual-standard usage by federal agencies resulted in a dual-track federal benefit system for legally married same-sex couples. So, while Windsor was a great milestone for the LGBTQ community, the federal agency guidance that followed created an interesting path for planners to navigate, depending on the benefits the plan needed to consider. For example, if estate planning attorneys consider the dual-track federal benefit system strictly from a same-sex paradigm, i.e., lesbian, gay, and bigender, the decision matrix would resemble the chart to the left. Also, if attorneys consider the dual-track benefit system when planning for a transgender person who is in transition and cannot check a gender box or a queer person who will not check a box, then we\’re left with the question marks below. All of the question marks are appropriate for transgender married couples who even reside in friendly states, such as Illinois, because lawyers must consider a plethora of benefits from agencies that a potential surviving spouse should receive were that spouse in a heteronormative marriage. Still, as the chart below illustrates, agencies following Windsor and using the place of domicile standard can inadvertently preclude transgender or queer surviving spouses from enjoying benefits that surviving spouses who are in lawful same-sex marriages enjoy. Considering a transgender person who has completed their sexual reconstruction and resides in an unfriendly state or who would like to leave benefits to their spouse, results in several questions about the definition of ‘spouse’ as derived from a particular statute or regulation governing a particular benefit: If the state defines spouse in terms of Windsor and the couple consists of a transgender man and a non-transgender woman, then is the couple a same-sex couple? If a state benefit did not follow Windsor, should the couple argue that the transgender man’s identity should apply and, therefore, they are a heteronormative couple able to receive the benefit? If the transgender man could transfer benefits to his spouse but a same-sex married couple living in the same state could not, is that fair? If the transgender man began his transition before Windsor and completed his transition after Windsor, would a federal benefit even apply? These and many questions are what transgender and queer couples must contend with in Windsor’s wake. Stay tuned for a few solutions and, of course, more questions. Estate Planning for the T&Q of the LGBTQ Community: Part 1 | Part 2 | Part 3 | Part 4