Oral Argument in Same Sex Marriage Cases Scheduled

The Supreme Court has scheduled oral argument for two cases which involve the legality of same-sex marriages.  The arguments will be heard on March 26 in both Hollingsworth v. Perry, a case involving California's Proposition 8, and United States v. Windsor, a New York case involving the constitutionality of the Defense of Marriage Act as it applies to the Federal Estate Tax.

By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com

Supreme Court to Address Same Sex Marriages

The Supreme Court announced that it would hear two cases which involve same-sex marriages.  One case is from California, and concerns a ban on same sex marriages approved by California voters.  The other is an appeal from the U.S. Court of Appeals for the Second Circuit which held that part of the Defense of Marriage Act was unconstitutional.

The Second Circuit case concerned a lesbian couple who had married in Canada, but lived in New York.  One spouse died, leaving her estate to her surviving spouse.  The surviving spouse claimed the marital deduction against the federal estate tax.  The Second Circuit held that the Defense of Marriage Act, which prohibits the Federal Government from recognizing same-sex marriages, violated the Equal Protection Clause of the U.S. Constitution.

The move by the Court does not necessarily mean that the Court will reach the central issue of whether same-sex marriages should be recognized in the United States.  Nonetheless, a possible outcome of the cases could be the resolution of whether same-sex couples can enjoy the same benefits under federal law as heterosexual couples.

By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com

Using Trusts and Powers of Attorney in Your Estate Plan

There are various tools that you can use in your estate plan to make sure that your property is handled the way you want.  Two such tools are the trust and the power of attorney.

A trust is a legal arrangement where one person, a trustee, holds and manages property for the benefit of another person, the beneficiary.  Through a trust agreement, the trustee is given instructions on what to do with the property held in trust.  This includes instructions on what to do with the property once the beneficiary has died.

The most common type of trust used in estate plans is the inter vivos, or living, revocable trust.  The owner of the property appoints himself or herself as both the trustee and the beneficiary.  He or she then appoints a successor trustee to take over when the original trustee dies or becomes incapacitated.  The trust includes instructions on what to do with the property upon the owner's death.

Revocable living trusts are commonly used to avoid probate.  That is, by owning your property through a trust, you do not have to file it with the probate division of the court, and go through the expensive and tedious process of probate.  In Virginia, where every estate with more than $50,000 (exclusive of real estate) must go through probate, using a living trust can save your heirs money and hassle after your death.

But, revocable living trusts can have other purposes.  They include assisting an older person who needs hep managing money by appointing a co-trustee to help make financial decisions. 

A power of attorney is a document that appoints a person to make decisions for you.  You appoint an agent, also known as an attorney-in-fact.  Your agent has the power to act as if her or she were you.  That can make it easier for you to have someone do your banking or sign documents in a real estate transaction.  Of course, since the agent can do things on your behalf, you better make sure your agent is a person you trust to act in your best interests.  Powers of attorney can be limited.  An example is a power of attorney to complete a real estate transaction while you are out of town.  Powers of attorney can also be general.  This is where you appoint an agent to do anything you can do.  They should also be durable, meaning that the powers of attorney is effective even when you are incapacitated.

The most common reason to have a power of attorney is to protect your estate from the need to engage in guardianship proceedings.  That is, if you become incapacitated, and you do not have a power of attorney, then in order for someone to take care of your estate for you, that person would have to go through a guardianship proceeding.  Guardianship proceedings are expensive and can be embarrassing.  By contrast, a power of attorney is usually a fairly simple and inexpensive document to create.

I go into more detail on trusts and powers of attorney in this article.

When you are ready to discuss you estate plan, you should contact a knowledgeable attorney to discuss the options available and the advantages and disadvantages of each option.

By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com