Thursday, June 27, 2013

Supreme Court strikes down Defense of Marriage Act – What does this mean for same-sex couples in Pennsylvania?

On June 26th the United States Supreme Court struck down the federal Defense of Marriage Act (DOMA). The court’s 5-4 decision in United States v. Windsor was a great victory for supporters of same-sex marriage. But what does it mean for Pennsylvania couples?

The 1996 DOMA law prohibited federal recognition of same-sex marriages – which meant that legally married same-sex couples were denied federal benefits, privileges and obligations under laws governing taxes, Social Security, Medicare, insurance benefits, immigration, etc. 
Now, under the Supreme Court’s ruling in Windsor, same-sex married couples must receive the same federal treatment as married couples of the opposite sex. This involves both benefits and burdens (such as potentially higher income tax rates due to the “marriage penalty” and pooling of a couple's resources for purposes of qualification for Medicaid benefits).
The court’s decision does not mean that there is a constitutional right to same-sex marriage. The court dodged that murky and politically charged issue by dismissing a second same-sex marriage case, Hollingsworth v. Perry, on procedural grounds.  
Here is a “plain English” explanation of the Windsor decision supplied by Amy Howe of the SCOTUSblog on June 26th:
The federal Defense of Marriage Act defines "marriage," for purposes of over a thousand federal laws and programs, as a union between a man and a woman only. Today the Court ruled, by a vote of five to four, in an opinion by Justice Kennedy, that the law is unconstitutional. The Court explained that the states have long had the responsibility of regulating and defining marriage, and some states have opted to allow same-sex couples to marry to give them the protection and dignity associated with marriage. By denying recognition to same-sex couples who are legally married, federal law discriminates against them to express disapproval of state-sanctioned same-sex marriage. This decision means that same-sex couples who are legally married must now be treated the same under federal law as married opposite-sex couples.
The court's decision does not create a national constitutional right to same-sex marriage. It does mean that married same-sex couples living in states where their unions are recognized as legal must be treated as married for purposes of federal benefits. Currently 12 states and the District of Columbia recognize gay marriage. (The Hollingsworth decision effectively adds California to that list).


What about gay couples living in Pennsylvania and other states where same sex marriage is not currently recognized? What is the effect of this ruling for Pennsylvania couples?
The case does not affect same-sex couples residing in Pennsylvania who have not been validly married in another jurisdiction. Only couples who have been lawfully married are impacted by the ruling.
But the implications are complicated and evolving for Pennsylvania same-sex couples who have been validly married in another jurisdiction.

PA State Benefits Not Affected

Pennsylvania statutory law is legally hostile to gay marriage. Act 124 enacted in 1996 (the Pennsylvania Defense of Marriage Law, 23 Pa.C.S 1704) holds that “marriage shall be between one man and one woman” and that a “marriage between persons of the same sex which was entered into in another state or foreign jurisdiction, even if valid where entered into, shall be void in this Commonwealth.”

However, the Pennsylvania Constitution contains a direct prohibition against denial or abridgment of equality of rights because of sex. Section 28 of the Pennsylvania Constitution states: 

"Equality of rights under the law shall not be denied or abridged in the Commonwealth of Pennsylvania because of the sex of the individual." 

For now the current Pennsylvania governor will be supportive of the Pennsylvania Defense of Marriage Act statute. So, state benefits and privileges granted to married couples under Pennsylvania law will not immediately change as a result of the Windsor decision. They won’t change unless or until there are successful legislative or judicial or executive challenges to current PA law.  
Legally married same-sex couples residing in PA will not be treated as married for purposes of state inheritance, state pensions, state taxes, etc. The differences can be very significant. For example, the PA tax rate on inheritance by a surviving spouse is 0%. The tax rate between same-sex couples is 15%.

Federal Benefits for PA Couples

The federal benefit situation is confusing for same-sex spouses who are legally married, but reside in Pennsylvania. Various federal agencies follow different standards in determining who is married.
Some federal agencies follow the “place of celebration” standard. This means that if a couple was legally married in any jurisdiction, the marriage is recognized by the agency. But other agencies follow a “place of residence” standard which requires that the marriage be recognized by the place where the couple is living for them to be eligible for the benefit. 
The place of residence standard is followed by the Internal Revenue Service, the Social Security Administration and the Department of Veteran’s Affairs according to NPR’s breaking news two-way blog. (See below for the SSI program regulation).
The result is a mess that is going to have to be fixed either by Congress via legislation or President Obama via regulation. Don’t count on Congress agreeing on anything. But President Obama seems to be already moving towards changing regulations.
In a statement issued after the Windsor ruling, the President said: "So we welcome today's decision, and I've directed the Attorney General to work with other members of my Cabinet to review all relevant federal statutes to ensure this decision, including its implications for Federal benefits and obligations, is implemented swiftly and smoothly."       
It seems likely that the Obama Administration will seek to broadly apply a place of celebration standard. But some definitional standards are created by statute and may not be subject to regulatory change. So it may take some time and possibly litigation before a universal definition of marriage is achieved for federal benefit purposes.  

Advance Planning is Important

The Windsor case is a big step forward for same-sex couples, but it is only a partial step towards true legal equality. Nontraditional couples residing in Pennsylvania, whether legally married or not, still need to plan in advance to protect their partners. As my friend and co-author, Kirby Upright, has noted in his chapter of the book Estate Planning in Pennsylvania:
[E]state planning is probably far more important for the nontraditional couple (i.e., same-sex partners or unmarried partners of the opposite sex) than for traditional couples. Ironically, no such laws address the many complications that develop in a nontraditional relationship. Consequently, nontraditional couples are left to their own means, with little assistance from the legislature, to protect their property rights and the rights of their loved ones.  (Estate Planning for Nontraditional Couples, Chapter 9 of Estate Planning in Pennsylvania, PBI Press, 2012 Edition).
As Bob Dylan sang, “The Times They Are A Changin’” but the law tends to move slowly – it’s a local train, not an express. Same-sex and other nontraditional couples should sit down with their advisors and get their legal and financial planning in order. There is much that can be done to limit the problems and uncertainties that can hurt your loved ones while the law inches forward.   


Further Information

As of July 1, 2013 the following US jurisdictions recognize same sex marriage:
  1. California (pending)
  2. Connecticut
  3. Delaware
  4. District of Columbia
  5. Iowa
  6. Maine
  7. Maryland
  8. Massachusetts
  9. Minnesota
  10. New Hampshire
  11. New York
  12. Rhode Island
  13. Vermont
  14. Washington 
Here is the current SSI regulation on who is considered to be married:
§ 416.1806. Whether you are married and who is your spouse.
(a) We will consider someone to be your spouse (and therefore consider you to be married) for SSI purposes if—
(1) You are legally married under the laws of the State where your and his or her permanent home is (or was when you lived together);
(2) We have decided that either of you is entitled to husband's or wife's Social Security insurance benefits as the spouse of the other (this decision will not affect your SSI benefits for any month before it is made); or
(3) You and an unrelated person of the opposite sex are living together in the same household at or after the time you apply for SSI benefits, and you both lead people to believe that you are husband and wife.
(b) if more than one person would qualify as your husband or wife under paragraph (a) of this section, we will consider the person you are presently living with to be your spouse for SSI purposes.

Here is an article by Massachusetts attorney Harry Margolis: What Does Defeat of DOMA Mean for Estate and Long-Term Care Planning 

Tuesday, June 18, 2013

The Disabled Military Child Protection Act

Military retirees should be allowed to better provide for a surviving child who is disabled. Right now that planning is made difficult because of the restrictive rules that apply to Survivor Benefit Plans.

A Survivor Benefit Plan (SBP) is an insurance plan that military retirees can use to protect their surviving spouse or dependent child. In the event of the death of the retiree, the SBP can pay an annuity to the surviving family member to help make up for the loss of the veteran’s retirement income.

Many military retirees choose to protect their dependent children with an SBP. In most cases a surviving child beneficiary receives annuity payments until they reach age 18 or 22 (if a full-time student). However, an incapacitated child can receive the annuity for life provided the child never marries.

But it turns out that a SBP is not a particularly effective way for military retirees to provide for their disabled children. Under current law, the annuity payments must be left directly to the child. This can create problems for a child who is necessarily reliant on means tested public benefit programs. For more on the problems with direct inheritance by special needs children see my earlier post: Inheritance can create problems for grandchild with special needs.

Non-military families can provide for special needs children by having their insurance and retirement benefits paid to a special needs trust. Careful planning is required for IRAs and other qualified retirement plans, but it can be done. Why do we deny military retirees the same opportunity to use their SBP insurance to protect their disabled children?

Legislation has been introduced in Congress which would enable veterans who invest in a Survivor Benefit Plan (SBP) to transfer their benefits to a Supplemental Needs Trust for their special needs children (instead of leaving the benefit directly to the disabled child). S. 1076, the Disabled Military Child Protection Act, is unfortunately given only a slim chance of making it out of committee by GovTrack. Similar legislation (H.R. 2249) has been introduced in the House of Representatives with even slimmer prospects. 

However, in the Senate, Senator Kirsten Gillibrand (D-NY), a co-sponsor of the Disabled Military Child Protection Act, successfully added the Act’s language to the National Defense Authorization Act for Fiscal Year 2014 (S.1034) (NDAA). S. 1034 was passed through the Armed Services Committee this month.
The current situation is a shameful way to treat both our military retirees who have served our country so well - and their disabled children. If Congress would just turn its attention to this legislation, it’s hard to imagine there would be significant opposition. Let’s get this legislation enacted and allow our veterans to plan for the special needs of their disabled children.

Further Information

For more on Supplemental Needs Trusts for children with special needs, see my earlier post What are "Special Needs Trusts"

Thursday, June 13, 2013

Being Sensitive to Hearing Loss

I’m an elder law attorney who suffers from some hearing loss. Perhaps it is a result of too many rock concerts in the 1960’s or too many hours on the lawnmower with no ear protection. (I wear ear protection now, but of course that won’t bring back the hearing I have already lost).
I wear hearing aids, and they help a lot. But, they don’t solve all of my hearing issues. I still spend a lot of frustrating, embarrassing moments dealing with my inability to understand what someone is saying to me.  
My own personal hearing loss has made me more sensitive, I think, to the hearing needs of my clients. This is especially important for an elder law attorney. Nearly two-thirds of people over age 70 have some degree of hearing loss (and only 20% wear hearing aids). And even with high quality hearing aids, I can tell you from personal experience, I still miss a lot.
Improving client communication is important for any professional. We want to make sure our clients are able to stay in the conversation.To communicate more effectively with our clients with hearing loss, we need to do more than just raise our voice. Raising the volume may actually do more harm than good. 
Hearing is complex. The fact that I can hear you doesn’t mean I can understand what you are saying. Volume alone does not equate to clarity and understanding. Your client may have difficulty distinguishing between different sounds. My own loss is most severe in the higher register. This makes it harder for me to hear consonants. If you shout at me, I still won’t know what you are saying.  
Of course, we all want our clients to understand what we are saying.  Here are ten tips that I have found useful. I’m posting them on this blog in the hopes one or more of them may be helpful for lawyers and other professionals who frequently counsel persons with hearing loss. 
1. Understand that most of your older clients have some problems with their hearing.  Be alert for hearing loss even when the client has not volunteered this information.  Ask if anyone has a hearing problem at the outset of the appointment.  Watch for hearing aids, bending of the head, lack of expression while listening, inappropriate responses and other signs of interference with communication
2. Don’t confuse hearing loss with dementia.
3. Avoid background noise.
4. Face the client so the client can see your face, especially your lips.
5. Use visual aids. (I have large whiteboards in each of my offices where I can print things out in bold letters, and put diagrams)
6. Do not shout (shouting actually distorts sound) but enunciate clearly and moderately.
7. Use short, simple sentences. 
8. Go slow, take time.
9. Make sure your face is well lit from the front so that your client can see your lips and facial expressions. Avoid back-lighting.
10. Ask the client what you can do to improve communication

There are some online videos that can help you understand what your clients with hearing loss may be experiencing. You can check them out by clicking the links below.