What is the status of domestic partnership benefits on a federal level post-Windsor?

by Matthew Dulac (Summer Associate)

Before the United States Supreme Court struck down the Defense of Marriage Act (“DOMA”) in United States  v. Windsor, the federal definition of “marriage” was limited to that between a man and a woman. For that reason, same-sex couples in registered domestic partnerships and civil unions could not receive spousal benefits under federal law.  This has not changed post-Windsor, since same-sex and opposite-sex married couples are now afforded (nearly all of) the same treatment under federal law.  That is, federal spousal benefits are only extended to “married” couples – whether same-sex or opposite-sex – and not to domestic partners.

In fact, several federal agencies have clarified that “marriage” means only couples who are actually married under the law, regardless of sexual orientation, and not those in registered domestic partnership or civil unions.  For example, in September 2013, the Internal Revenue Service (IRS) stated in Revenue Ruling 2013-17  that, for tax purposes, the term  “marriage” includes marriage between individuals of the same sex but does not include registered domestic partnerships.

Similarly—and just two days after the IRS—the US Department of Labor (DOL) released its own statement in the DOL Guidance to Employee Benefit Plans 2013-04 that it would interpret “spouse” as any individual lawfully married under any state law, and “marriage” to include a same-sex marriage that is legally recognized as a marriage under any state law.  The DOL also stated, however, that the terms “spouse” and “marriage” do not include individuals in a relationship that is not denominated a “marriage” under state law, such as a domestic partnership.

In sum, even though same-sex marriages now are eligible for many of the same federal benefits as opposite-sex marriages, domestic partnerships remain unrecognized for the purpose of receiving federal spousal benefits.

If you die intestate (without a last will and testament), will your same-sex spouse be considered a “spouse” for purposes of inheritance?

by Mercedes Bugallo (Summer Associate) 

Yes.  One of the effects of the Whitewood decision is that same-sex spouses are considered a “spouse” for purposes of Pennsylvania’s intestate succession process. A person domiciled in Pennsylvania who dies without a will is said to have died “intestate” and his or her estate is divided according to Pennsylvania’s intestate succession laws. The existence of surviving children or parents will affect the amount of the estate and other property to which the same-sex spouse is entitled.  If the deceased left no children or parents, then the surviving spouse inherits everything. Importantly, property inherited from a spouse is exempt from Pennsylvania’s estate tax.

For more detailed information, please refer to this chart, located on the Allegheny Register of Wills’ website: http://www.alleghenycounty.us/wo/probate/intestate.pdf

 

 

Does the recognition of same-sex marriage in Pennsylvania have any effect on immigration visa petitions for Pennsylvania citizens?

by Mercedes Bugallo (Summer Associate)

Immigration visas, unlike marriage recognitions, are regulated by the federal government, not the individual states.  This means that the Pennsylvania Whitewood decision, albeit groundbreaking on a state level, has no effect on a same-sex couple’s application for green cards or fiancé visas.

Fortunately, however, the federal government has been treating both same-sex and opposite-sex married couples alike for immigration purposes since shortly after the U.S. Supreme Court declared the federal Defense of Marriage Act (“DOMA”)
unconstitutional in 2013, in the case of United States v. Windsor.  Before Windsor, a U.S. citizen could not sponsor his or her foreign spouse for a green card or fiancée visa. Now, bi-national same-sex couples are afforded the same consideration as opposite-sex couples for immigration purposes.  Indeed, according to the U.S. Citizenship and Immigration Services (USIS), which is the organization in charge of the visa process for spouses of American citizens, USIS reviews immigration visa petitions filed on behalf of a same-sex spouse in the same manner as those filed on behalf of an opposite-sex spouse.

Keep in mind that “the law of the place where the marriage was celebrated determines whether the marriage is legally valid for immigration purposes. . . . The domicile state’s laws and policies on same-sex marriages will not bear on whether USCIS will recognize a marriage as valid.” In other words, USCIS will consider visa petitions of same-sex couples who have a valid marriage license from a U.S. state or foreign country where same-sex marriage is legal, even if the couple lives in a state that does not recognize same-sex marriage. But, it will not consider visa petitions for same-sex spouses whose marriage was performed in a country or state that does not recognize same-sex marriage, even if the couples lives in a state that does recognize same-sex marriages, because the marriage was not lawfully entered into.

 The U.S. Citizenship and Immigration Services’ FAQ section for same-sex marriage applications and benefits can be found at: http://www.uscis.gov/family/same-sex-marriages.

 

Are out-of-country same-sex marriages (e.g., Canada) now recognized in Pennsylvania?

by  Mercedes Bugallo (Summer Associate)

Seventeen countries have legalized marriage for same-sex couples nationwide (Netherlands, Belgium, Spain, Canada, South Africa, Norway, Sweden, Portugal, Iceland, Argentina, Denmark, France, Brazil, Uruguay, New Zealand, Britain, and Luxembourg).  Two others allow same-sex marriage on a regional basis (Mexico and the United States).

Same-sex couples who married abroad can rest assured that the state of Pennsylvania will automatically recognize their marriage. There is no formal process or forms to fill out for the marriage to be recognized in the state.

However, marriages from other countries are not automatically registered in the Commonwealth of Pennsylvania. This means that while Pennsylvania will recognize foreign marriages of same-sex couples, it will not maintain records of those marriages, because marriage records are maintained by the jurisdiction that granted the marriage license. Same-sex couples getting married abroad should, therefore, obtain certified copies of their marriage license from the country in which it took place. There are a various reasons why someone may need a copy of his or her marriage record. For example, proof of marriage may be required for name changes, to collect Social Security or pension benefits, for adoption purposes, and for some passport applications.

For more information, listen to Equality Pennsylvania’s “Questions and Answers about Marriage in PA”: http://www.equalitypa.org/questions-and-answers-about-marriage-in-pa/

 

Protection from Sexual-Orientation Discrimination in Pennsylvania

 

By:  Alaura Maglio (Summer Associate)

Question: Does Whitewood v. Wolf Provide Any Protection from Sexual-Orientation Discrimination in Pennsylvania?  

In Whitewood v. Wolf, a federal judge struck down a Pennsylvania law that limited the definition of marriage to that between “one man and one woman.”  In his momentous opinion, Judge Jones also declared that classifications based on sexual orientation are subject to “intermediate scrutiny.”   As a result, when a state or local law classifies people (i.e. discriminates) on the basis sexual orientation, the government must prove that this classification is substantially related to an important government purpose.  This is quite a difficult standard to meet.

As this language indicates, to receive legal protection for discrimination, there must first be an applicable law.  It is important to understand that unfair or discriminatory treatment, on its own, is probably not an illegal practice.   For instance, we know that employers employees aged 40 or older are protected against being fired because of their age.  However, this is not just because discrimination is a bad practice; it is because a federal law, the Age Discrimination in Employment Act (ADEA), prohibits such practice.  Had Congress not passed the ADEA, there would be no law barring employers from firing employees based on their age, and such discrimination would not be illegal.

In sum, Whitewood only announced how rigorously a court must examine the purpose of an existing law.  There is currently no statewide Pennsylvania law that protects against sexual orientation discrimination.  Judge Jones did not create a law prohibiting discrimination based on sexual orientation (nor could he have done so).

There is, however, pending legislation in Pennsylvania that would provide some of these protections.  Senate Bill 300 seeks to add “sexual orientation” and “gender identity or expression” to the protected categories under the Pennsylvania Human Relations Act (PHRA).  If Senate Bill 300 were to pass, it would allow persons discriminated against in employment, housing or public accommodation because of their sexual orientation or gender identity or expression to seek redress under the PHRA.   For example, if an employer fired an employee because of her sexual orientation, she could bring a claim to the Pennsylvania Human Relations Commission (PHRC).   If the former employee proved to the PHRC that she was terminated because of her sexual orientation, she could receive redress as provided by the Act.  Such redress includes: compensation for loss of work, reinstatement to her former position, and an order to the employer to pay a civil fine.  However, keep in mind that there is no law in Pennsylvania that regulates purely private conduct.  Outside of employment, housing, or public accommodations, Senate Bill 300 would not protect against or provide remedies for discrimination.

In sum, Whitewood represents an important step toward providing increased protections to the LGBT community by requiring courts to closely examine potentially discriminatory laws.  However, the court’s opinion does not provide recourse for discriminatory practices, and it also represents the conclusion of just one judge.  Such protections can be provided at a state level by the passage of laws like Senate Bill 300.

Designating Your Same-Sex Spouse as the Sole Beneficiary in Your Will

 

By David K. Goldfarb (Summer Associate)

Question: If your will designates your same-sex spouse as the sole beneficiary, will your relatives have a valid (and potentially successful) claim against your estate?

Estate planning can be a very stressful time for all married couples, especially when children and other relatives need to be considered.  However, under normal circumstances, one need not be overly concerned with the validity of his will and the possibility of relatives bringing claims against a surviving spouse that has been designated as the sole beneficiary under that will. It is typically very difficult to challenge a will. Approximately 99% of wills are enforced without any issues. Courts interpret wills as the voice of the testator (the person who wrote the will). Since that person is deceased and no longer able to express his wishes, courts are extremely hesitant to alter the terms of the will.

As a general rule, a party must have an interest in order to challenge a will, and that interest must be substantial, direct, and immediate. It is very likely that a court would conclude that close relatives, like children, have a substantial, direct, and immediate interest in your will. Thus, your relatives would likely be able to bring a claim against your estate. However, such a claim is unlikely to prevail.

As an initial matter, Pennsylvania law expressly allows you to disinherit (deprive someone of inheritance) every individual other than your spouse.  Furthermore, your relatives, or any other challenger, would have a very limited number of grounds for bringing a claim against your same-sex spouse. Most grounds address the procedural process for the creation of a will and are easily addressed by retaining an attorney to assist in your estate planning. The two substantive grounds are that the individual lacked the mental capacity necessary for creating a valid will and that the will was procured by fraud, forgery, or undue influence.

In order to challenge a will based on mental capacity, the challenger must prove that the testator did not understand the consequences of making the will at the time of the will’s creation. Adults are presumed to have the necessary mental capacity required for the creation of a will, thus this argument is usually limited to the context of an individual diagnosed with dementia who revises their will towards the end of their life.

In order to challenge a will based on fraud, forgery or undue influence, the challenger essentially must prove that the will was not created by the deceased or that the deceased was forced via threats to create the will. No matter the situation, it would be wise to have several witnesses, including an attorney, present during the creation of your will. Most states require a typed hard copy of the will signed by the testator in the presence of at least two adult witnesses who are not named as heirs in the will.

It is advisable to consult with a Trusts & Estates attorney as part of your estate planning to ensure that no potential claimant could prevail against your same-sex spouse in challenging the will.

 

First Read on Same-sex Spouse Health Benefits Post Windsor

 

by:  John H. Wilson

The issues of same-sex spousal rights to benefits is now largely resolved; however, substantial questions about same-sex spouse health and welfare benefits remain.

To see the full story, click on the link below:

http://www.bipc.com/files/media/misc/11e4d4de9ce2b59482c528e2d1c3f3a0.pdf

John H. Wilson is a Shareholder of Buchanan Ingersoll & Rooney PC whose practice is primarily focused on employee benefits, ERISA and deferred compensation matters.

Attorney General Eric Holder Memo on Federal Benefits Post-Windsor

“This is what we have been waiting for from the attorney general.”

Maureen Cohon, Esquire

Attorney General Eric Holder has issued a memo on how the Windsor decision will effect federal programs. This is a result of the year long review after Windsor. The memo can be found here by clicking on the link below:

http://www.justice.gov/opa/pr/2014/June/14-ag-653.html
 

Gift tax Consequences of Real Estate Transfers

By Lauren Sweeney

Often times, one partner in a same-sex couple owns real property and seeks to add the other partner to the title or deed for no consideration (i.e. when no money or other type of payment is received in return).  Though this may appear to be a straightforward process, it is important to keep in mind that there are tax consequences for so doing. This type of one-sided property transfer constitutes a taxable gift for federal gift tax purposes.  Under the federal tax laws, there is a gift tax reporting obligation to the extent that the fair market value of the gifted interest, exceeds the available annual exemption in the year of the gift.

This reporting obligation does not necessarily imply a tax liability.  According to The American Taxpayer Relief Act, each American taxpayer has a $5 million cumulative lifetime gift and estate tax exemption.  This means that any amounts given during life or transferred upon death that total less than $5 million will be transferred free of tax.  Additionally taxpayers are allowed to make annual gifts up to $14,000, per recipient, which gift does not count towards the $5 million lifetime maximum exemption.   Any gift amount to an individual that exceeds $14,000 is considered a taxable gift, and the taxpayer who made the gift is required to file a gift tax return.  Gifts that exceed the annual exemption amount accumulate from year to year and count toward the $5 million lifetime maximum exemption, as do any assets that are part of an inheritance.

The use of a “tenancy in common” may be a beneficial means for gifting the other partner into ownership with minimal gift tax consequences. Because the shares of ownership do not have to be equal in a tenancy in common, the partner may choose to gift a share of the property to the other partner each year (up to the annual exclusion amount) until the desired property apportionment is received.   Best-practices compliance involves not only a gift tax return filling, but also a real estate valuation of the fractional interest being gifted.

Since the repeal of DOMA, legally married spouses can transfer property to their spouses free of the gift tax.  For federal tax purposes, the terms “spouse,” “husband,” and “wife” includes individuals of the same sex who were lawfully married under the laws of a state whose laws authorize the marriage of two individuals of the same sex and who remain married.  However, the terms “spouse,” “husband and wife,” “husband,” and “wife” do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state, and the term “marriage” does not include such formal relationships.  Gifts to your spouse are eligible for the marital deduction.

Due to the complexity of both real estate and tax law, it is advisable that individuals consult with an attorney prior to adding his or her same-sex partner to a title or deed to ensure proper reporting of both the real estate transfer and gift tax reporting.