The United States v. Windsor case, decided June 26, 2013 by the United States Supreme Court, held Section 3 of the Defense of Marriage Act (DOMA) to be unconstitutional under the Due Process Clause and the Fifth Amendment. Among its many consequences, the Windsor decision will impact settlement planning for cases involving same-gender couples.
Although not specifically about settlement planning, a recent webinar sponsored by the National Academy of Elder Law Attorneys (NAELA) and titled "The DOMA Decision and What It Means to Your Clients" identified some of the settlement planning issues the Windsor decision could impact. Although S2KM did not attend the NAELA webinar, S2KM did receive and review the webinar handout materials which are summarized in this blog post.
Featured NAELA webinar speakers and topics:
- Cynthia Barrett - Estate Planning
- David Lillesand - Social Security
- Victoria Collier - Veterans' Benefits
- Rene Reixach, Jr. - Medicaid
- As enacted in 1996, DOMA Section 3 (Definition of Marriage) provided:
"In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word 'marriage' means only a legal union between one man and one woman as husband and wife, and the word 'spouse' refers only to a person of the opposite sex who is a husband or a wife."
- As a result of this definition, same-gender couples had been excluded from many federal benefits available to heterosexual couples.
- In its Windsor decision, however, the Supreme Court did not address DOMA Section 2 (Powers Reserved to the States) which provides:
"No State, territory, or possession of the United States, or Indian tribe, shall be required to give effect to any public act, record, or judicial proceeding of any other State, territory, possession, or tribe respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other State, territory, possession, or tribe, or a right or claim arising from such relationship."
- In other words, DOMA Section 2, which remains operable, says no state can be forced to recognize a same‐gender marriage from another state.
- By defining "spouse" and its related terms to signify a heterosexual couple in a recognized marriage, DOMA Section 3 previously codified non-recognition of same-gender marriages for all federal purposes.
- The Windsor decision could impact the rights of “lawfully married” same-gender couples under as many as 1100 different federal laws and regulations.
- Historically, states have had the right to determine family relationship issues.
- Only thirteen states and the District of Columbia currently permit same-gender marriages and nine states offer some other form of recognition.
- Only eleven states and the District of Columbia currently recognize common-law marriages with one state (New Hampshire) limiting recognition to probate and another state (Utah) requiring validation by a court or administrative order.
- One overriding post-Windsor issue is whether a lawfully married same-gender couple will qualify the couple for federal recognition regardless of where they live.
- Or, alternatively, will a lawfully married same-gender couple be denied certain federal benefits, or escape spousal responsibilities, if they live in a state that does not permit or recognize same-gender marriages?
- The Social Security Administration, the IRS and the Veterans Administration, generally determine marital status based upon “Place of Domicile” rather than “Place of Celebration”.
- The Department of Justice currently is consulting with various state agencies to develop a uniform policy for determining whether lawfully married same-gender couples can be denied federal benefits, or escape spousal responsibilities, if they live in "non-marriage" states.
- Although the Social Security Act (SSA) contains many titles, only Title II ["Old Age, Survivors and Disability Insurance" (OASDI)] and Title XVI ["Supplemental Security Income" (SSI)] are administered by the Social Security Administration (SSA).
- SSA Title II (OASDI) provides monthly payments to elderly retired and non‐elderly disabled persons, and their dependents and survivors based on the wage‐earner’s past contributions of a wage earner into the retirement and disability trust funds.
- SSA Title XVI provides welfare benefits to the elderly and disabled who have not paid sufficient sums to qualify for Title II benefits, and are either age 65 and above, or who are medically disabled and have low income and few assets.
- Depending upon subsequent legal developments, the Windsor decision could have a significant impact on both Title II and Title XVI programs for same gender couples seeking qualification for some national programs which are dependent on state of residence.
- Immediately following the Windsor decision, the SSA issued an Emergency Message ordering its 66,000 employees to stop processing claims involving “same‐sex married couples” and their children until the related issues are resolved.
- Unlike Social Security, which is a federal program, Medicaid is a dual federal-state program which the states are primarily responsible for administering.
- Pre-Windsor, states that did not recognize same-gender marriages generally did not apply deeming to deny community Medicaid (health insurance to pay doctors, hospitals, drugs, etc.) to same-gender couples. However, these states also did not grant the favorable aspects of Medicaid nursing home benefits to same-gender couples.
- Medicaid experts anticipate further litigation to determine whether states that do not honor same-gender marriages will lose their federal cost sharing if they continue to deny Medicaid benefits for same-gender couples or whether state Medicaid officials must continue to obey state laws forbidding such marriages.
- The Windsor decision, which follows repeal of "Don't Ask Don't Tell", appears to allow military members and their same-gender spouses to receive almost all of the same benefits (including health care and housing) as married heterosexuals regardless of where the couple lives so long as their marriage took place in a state that recognizes same-gender marriages.
- Although the Department of Defense administers laws and regulations affecting active duty military, the Department of Veterans Affairs administers laws and regulations affecting veterans.
- Because VA regulations determine the validity of a marriage based upon state law, same-gender married veterans may still not receive post-Windsor all benefits available to other married veterans.
- These potential inequities may result in equal protection and due process violations and are therefore likely to be litigated.
Estate Planning - Issues impacted by Windsor decision
- Federal employees and retirees health coverage and pension do-overs
- Income tax refunds
- Disclaimer and QTip trusts; marital deductions
- Private and non-federal public survivor pensions
- IRA and qualified plan beneficiaries
- Social security retirement and LGBTQ spousal benefits
- Long term care Medicaid income and asset protections for married LGBTQ couples in marriage states
- Public needs-based benefits where marriage may disqualify individuals
- Affordable Care Act premium support and subsidy
- Joint spousal income for tax credits
- Married couples filing joint tax returns
- Will and/or trust documents should mention any marriage or registration
For additional information about the rights of same gender couples following the Windsor decision as well as continuing updates on related litigation, see the GLAD website.