On June 26, 2015, the U.S. Supreme Court’s decision in Obergefell v. Hodges confirmed that same-sex couples have the same right to marry as opposite-sex couples. So that means that same-sex couples’ estates will be treated the same by the courts, right?
Well, unfortunately, it’s not that simple yet.
Courts have not explicitly ruled on whether or not same-sex civil unions (or what some people think of as “common law marriages”) will be retroactive for the purposes of classifying community and separate property in the marital estate.
What does that mean?
Let’s say Abby and Brandy have been in a relationship since 1990 and moved in together at that time. In 1995, they had a ceremony in front of their friends and family in which they exchanged rings and committed to stay together forever. From then on, they introduce each other as “my wife” and told everyone that they will get married as soon as the law allowed. In 1997, they bought a house together in Dallas and opened a checking account in both of their names. Then Abby bought a new car in her name only, and Brandy installed a pool in their back yard that she financed in her name only and paid for with her salary.
Fast forward to June 27, 2015, when Abby and Brandy are finally, legally married at the courthouse . . .
If either Abby or Brandy dies without an estate plan in place, what would happen with the house, the checking account balance, the car, and the improvements on the house?
No one knows, for sure. If the law decides that their “common law marriage” can be retroactive (for the sake of classifying their assets), all of those things could be considered community property to be distributed to the surviving spouse. If their marriage isn’t retroactive back to 1995, the courts will be very unpredictable as to how they will handle the division of assets. Of course, this potential distribution of assets to the surviving spouse supposes no familial disagreements or arguments necessitating additional court hearings.
What should same-sex couples do?
The best thing for same-sex couples to do is work with an experienced attorney to put their exact wishes in writing ensuring specific instructions are carried out. It is also recommended that any other “non-traditional” families (like opposite-sex couples who have been together for a long time but never married, married couples with blended families including children from previous relationships, or any other family that might need special instructions in lieu of the common law rules of distribution) work with an attorney to protect their legacy.
In addition to crafting an estate plan that will distribute your assets according to your requests, our total estate plan packages include power of attorney documents that will help avoid problems with other institutions that don’t recognize your partner’s authority to handle your financial and medical decisions.