Dear Mr. Premack: A few weeks ago you wrote about nontraditional couples and the type of planning they can legally do to protect each other (like wills or trusts, powers of attorney and advance directives). That was very helpful information. Since then, I’ve read a few news stories about courts that are beginning to rule in favor of LGBT equality under the law. Do any of those court decisions give legal rights to LGBT couples in Texas? – S.L.
On May 31, the US Court of Appeals for the 1st Circuit announced its decision in the case Gill v. OPM. The issue was whether the federal Defense of Marriage Act (DOMA) is constitutional when it seeks to deny federal benefits to same-sex couples who are lawfully married under a state’s laws. The case was brought in Massachusetts, which has a state law which allows same-sex marriage. One of the plaintiffs was seeking spousal survivor benefits under Social Security law.
The Constitution guarantees equal protection under the law, but to gain that protection a group must show that it has been the subject of discrimination. If the discrimination is not against a suspect group, the government need only have a “rational basis” for the legal discrimination. But if the group is one that has often faced discrimination – like discrimination based on race or national origin – then the government must have a much stronger reason for discriminating or the government’s discrimination is unconstitutional. There must be a “compelling governmental interest” at stake, and the law must be narrowly tailored to address that interest. If the standards are violated, the discrimination is unconstitutional.
Thus, the 1st Circuit needed to decide if same-sex couples are a group that has faced ongoing discrimination (called a “suspect classification”). The court applied prior rulings and decided that same-sex couples are not a suspect classification. However, the court then applied other Supreme Court rulings that limit federal intervention in areas of law that are traditionally left to the states. An example is family law, involving marriage and divorce regulation. When the federal government passes a law that infringes on a state’s traditional legal sphere, the government’s action must pass intensified scrutiny and have strong justifications.
The court examined the reasons which Congress gave for passing DOMA, and found those reasons had no relationship to the effect of the law. For instance, the goal of “strengthening marriage” is not met by denying social security benefits to the surviving spouse from a same-sex couple. Hence, the court ruled that part of DOMA violates the equal protection clause of the Constitution. The court recognized that the US Supreme Court may rule with or against this decision, and thus did not order the government to change its behavior until after appeals are exhausted.
Just two weeks later, the US District Court for the Southern District of New York ruled in the Windsor case that same-sex spouses should be treated as married under the federal estate tax law. The tax code delays imposing estate taxes on a surviving spouse, waiting instead to impose the tax when both spouses have died. If DOMA is legal, then a same-sex couple loses that benefit and the survivor must pay a significant estate tax. The case involved a couple living in NY who were legally married elsewhere. One spouse died in 2009, leaving her assets to the other spouse. The IRS applied DOMA, treated them as unmarried, and assessed $363,000 in estate taxes.
The surviving spouse claimed that DOMA violates the equal protection clause of the US Constitution. The court, like in the Gill case, decided that same-sex couples are not a “suspect classification”. Instead, the court used the same rationale in Gill to find DOMA’s effect has no relationship to the goals Congress set when it passed the law. The court ordered the IRS to treat the couple as married, to apply the “unlimited marital deduction”, and to refund the estate tax it had assessed.
These rulings do NOT apply to same-sex couples in Texas who were legally married elsewhere. The Gill case may reach the US Supreme Court, and that court’s ruling would apply in Texas. The Windsor case is binding only on the parties to that case, and is likely to be appealed. If Windsor reaches the Supreme Court it would be binding in Texas. Until then these cases would not be binding on a US District Court in Texas or on the 5th Circuit Court of Appeals.
Paul Premack is a Certified Elder Law Attorney practicing estate planning for all ages and probate law in San Antonio.
Original Publication: San Antonio Express News, June 18, 2012