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IRS to Gay Newlyweds: Not So Fast

August 5th, 2011

From Bloomberg Businessweek
IRS to Gay Newlyweds: Not So Fast
Federal tax benefits of marriage don’t extend to same-sex couples
By Andrew Zajac

bloomberg-businessweek-logoFor all those same-sex newlyweds in New York, Lawrence S. Jacobs has a message: Enjoy the Champagne and the honeymoon, but expect no gifts from the IRS. Jacobs, a lawyer in Washington, specializes in estate planning for same-sex couples-and in delivering the bad news that their unions aren’t legal in the eyes of the IRS, a policy that will cost them time and money during tax season.

Same-sex couples in Washington, which last year legalized gay marriage, must fill out a federal return to make calculations required for their D.C. joint return. But then they must set that work aside and fill out separate federal returns because the IRS doesn’t regard their union as legal, Jacobs says. “You just spent decades getting your marriage recognized, and now the feds say, ‘No, you’re not,’” says Jacobs, who as a partner in a same-sex marriage has firsthand experience of the problem.

This cumbersome process applies to all married same-sex couples in the U.S. It comes courtesy of the Defense of Marriage Act, or DOMA, which defines marriage as “a legal union between a man and a woman as husband and wife.” The Obama Administration, saying DOMA is unconstitutional, has instructed federal agencies to do what they can under existing law to extend benefits to same-sex partnerships. Such rule-stretching doesn’t go far with the IRS, says Brian Moulton, an attorney with the Human Rights Campaign, a Washington gay rights advocacy group. “There’s a relatively small space before you bump up against DOMA,” he says. “I don’t think there’s much they can do.” The IRS declined to comment.

Filling out a “dummy” federal return can add $300 to $400 to a same-sex married couple’s tax preparation bill, according to Larry Rubin, a partner at accounting firm Aronson in Rockville, Md. As a result of DOMA, gay couples must also pay income tax on a portion of employer-provided health insurance, which isn’t taxable for heterosexual married couples.

The costliest potential consequence of the IRS’s treatment of same-sex couples involves the estate tax. A heterosexual husband or wife generally can inherit any amount of money or property from his or her spouse without paying tax. A same-sex spouse inheriting a large estate, by contrast, can face a tax bill of as much as 35 percent on anything above $5 million. That situation spurred a New York widow, Edith Windsor, to sue the government last November seeking to get the IRS to return $363,000 in taxes on an inheritance from her spouse, Thea Spyer. Windsor is working with Senator Kirsten Gillibrand (D-N.Y.) and other lawmakers to repeal DOMA. “It’s a matter of fundamental fairness,” says Rose Saxe, an attorney with the American Civil Liberties Union, which is helping represent Windsor. “The government shouldn’t be excluding one group of married couples from these important protections.”

The bottom line: Even where they can marry, gays face disadvantages such as higher estate taxes and tax-prep fees $300-$400 more than straight couples.

Zajac is a reporter for Bloomberg News.

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Give the Gift of Estate Planning!

December 17th, 2010

Christmas GiftsThe 2010 holiday season is upon us which means holiday dinners, holiday travel and shopping for gifts. A gift to consider this holiday season is the gift of estate planning. Legal documents provide you and your loved ones with a peace of mind.

LGBT individuals especially need to be proactive to ensure that their plans for the future reflect their own wishes and are not dictated by laws that do not fit their life and relationships. Did you know that unless otherwise specified in many states, probate laws generally provide if a person dies without a Will, their property goes to family, rather than a partner they had a relationship with for years and the state determines who gets your assets, not you. Without an estate plan, your loved ones would have the burden to decide what your wishes are in times of crisis. Preparing legal documents will secure your wishes and help loved ones know what your intentions are during times of crisis.

Give the gift of estate planning for yourself or loved ones and you’ll have peace of mind for many holidays to come.

Let LegalOut help you give the gift of estate planning, visit our legal documents center.

Top Reasons Individuals Put Off Preparing Legal Documents

Often times, people put off creating legal documents. We know we need to do something, but we wait. Why do we wait? Here are some common reasons why we defer making a decision:

  • We do not want to think about dying or being incapacitated.
  • We do not know where to begin.
  • We think we do not have any assets. People assume they have to be rich or married with children to create a Will.
  • We procrastinate- people know they need to create an estate plan but put it off.
  • Legal costs are high.

Can you identify with one of these reasons of putting off estate planning? Without legal documents you are at risk of not having your wishes carried out in the event that something unexpected occurs. If you are in a committed relationship, you may want your significant other to be able to make medical and legal decisions for you, should you unable to make them yourself.  You would like to plan for the future of your family to ensure they are taken care of when you are gone. Even if you are not in a committed relationship, you want to make decisions about your own life and future without unwanted intrusions from others.

LegalOut can help you avoid putting off creating legal documents. LegalOut’s online resource center provides the LGBT community with affordable legal document solutions.  We provide easy-to-use tools for customizing your documents online, in the privacy of your own home, at your own pace and provides hundreds of do-it-yourself legal documents including living wills, domestic partnership agreements, power of attorney documents, last will and testament, and many others.

By planning now you can feel comfortable that you, your family and your future are taken care of exactly the way you envision.

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Are you one of the 70%?

August 11th, 2010

Did you know that national statistics indicate that over seventy percent (70%) of Americans die without creating a Last Will and Testament or other estate plan? This is a staggering statistic; it means that 70% of adults are letting others make decisions for them.

Are you one of the seventy percent? Do you really want someone else to make tough decisions on your behalf in times of crisis?

Here are some reasons why people do not create a Will:

  • Do not want to think about dying or being incapacitated.
  • Do not know where to begin.
  • Think they do not have any assets. People assume they have to be rich or married with children to create a Will.
  • Procrastination - people know they need to create an estate plan but put it off.
  • Legal costs are high.

What happens if you do not have a Will or Estate Plan:

  • State determines who gets your assets, not you.
  • Probate laws generally provide if a person dies without a Will, their property goes to family, rather than a partner they had a relationship with for years or decades.
  • Not having a Will may cause disagreements or lawsuits between your partner and your family.
  • Your loved ones would have the burden to decide what your wishes are in times of crisis.

Legal DocTypes of Estate Planning Documents

No one wants to think about his or her own death, but taking the time now to complete some basic documents can save you and your family much heartache later. You’ll get more peace of mind knowing that your wishes will be followed and your family and friends will be taken care of. Listed below are some basic estate planning documents:

Last Will and Testament
A Last Will and Testament allows you to set out your specific wishes for how you want your property and assets to be divided upon your death. It also designates who will assume guardianship responsibility of any minor children if neither parent can serve as guardian. You can use a will to make bequests to charities. Wills are easy to prepare, but are subjected to probate process, which, depending on the size of your estate, could take some time.

Living Will
A Living Will is a legal document used to specify your wishes for end-of-term health care decisions. It states that you do not want life-prolonging treatment if there is no hope of recovery, for example in the event of terminal illness or irreversible coma. Having a Living Will lets others know what your wishes are when you are unable to communicate them yourself.

Durable Power of Attorney
You can grant a Power of Attorney to another person (called your agent) for any case where you cannot represent your own interests. For example, you can send an agent to an important meeting you are unable to attend, and they may act on your behalf for the duration of that meeting. A Durable Power of Attorney, on the other hand, remains in effect if you become incompetent. In cases of terminal illness or permanent unconsciousness, you can set out health care directives for your agent, much like in a Living Will.

Hospital Visitation
This authorization is used to give visitation rights to a person who is not a legally recognized family member, should you become unconscious or unable to communicate yourself. You should have this document if you want your partner or someone who is not considered a family member by the state to be able to visit you in the hospital, should you become unable to communicate for your wishes.

Domestic Partnership Agreement
The Domestic Partnership Agreement is a document that a couple can enter into to dictate their contractual rights as a couple.

You can find all these legal documents and other estate planning forms on Legalout.com. Our online interview makes it easy to create these important documents - get started now for a piece of mind!

Online Legal Wills Provide an Affordable Solution
Everyone should have a Last Will and Testament, and the document should be reviewed and updated on a regular basis. Preparing and maintaining your Will doesn’t have to be time consuming, difficult, or costly. Knowing that an hour of an attorney’s time can cost $200 or more, many people put off preparing their Wills. However, you don’t have to use the services of an attorney to create an effective Will. You and the other members of your family can create your own Online Legal Will easily and inexpensively.

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Same-sex couples deserve visitation rights, hospitals told

May 7th, 2010

From the American Medical News:

By Doug Trapp, amednews staff. Posted May 7, 2010.

Washington — Same-sex couples and other unmarried partners will have their hospital visitation rights protected by forthcoming federal regulations, according to an April 15 memo from President Obama.

Gay rights groups said the announcement was long overdue. “Many same-sex couples are simply at the mercy of hospital personnel,” said Tara Borelli, staff attorney at Lambda Legal, a nonprofit organization supporting the civil rights of gay, lesbian, bisexual and transgendered people. “Nobody is hurt by allowing that access.”

Obama directed the Dept. of Health and Human Services to issue rules stating that people named in legally valid advance directives and through powers of attorney have the same rights as immediate family members of hospitalized patients when it comes to making health care decisions. Hospitals must also respect patients’ rights to designate visitors.

The rules will apply to all hospitals participating in Medicare and Medicaid, which is about 90% of U.S. hospitals, according to Rebecca Fox, executive director for the National Coalition for LGBT Health.

Obama said denying loved ones’ access to each other in hospitals during serious health situations has consequences. Physicians and nurses don’t always have the best medical information as a result, and people sometimes die alone while a loved one is “left worrying and pacing down the hall,” he wrote.

No reliable estimates exist on how often gays and lesbians are denied access to their hospitalized partners. Dozens of known cases each year could mask many more unreported incidents, Borelli said.

The American Hospital Assn. issued a brief statement saying that “we will look forward to details of the new regulations as well as direction on coordinating with states’ laws.” The Federation of American Hospitals offered no comment.

Obama said he was moved to act in part by the story of a lesbian couple who was preparing to take a cruise in 2007 with their three children. One of the women, Lisa Pond, collapsed from a brain aneurysm and was rushed to Jackson Memorial Hospital in Miami. She died the next day. Janice Langbehn, Pond’s partner of nearly 20 years, was denied access to Pond before she died, but Pond’s sister was not. Langbehn unsuccessfully sued the hospital.

Jackson Health System in Miami — which includes the hospital — has since emphasized same-sex couples’ rights during new employee training, said Jason Schneider, MD, immediate past president of the Gay and Lesbian Medical Assn. and assistant professor of medicine at the Emory University School of Medicine. However, most states do not legally recognize gay marriages, so some hospital staff don’t see same-sex couples as having the same rights as heterosexual married couples, he said.

AMA policy supports hospitals providing the same visitation rights to same-sex couples as they do heterosexual couples.

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What is Estate Planning All About?

March 5th, 2010

No one likes to think about times of personal crisis such as illness, accidents, or even death. But such planning is essential for gay, lesbian, bi-sexual, and transgender individuals and couples, whose basic civil rights, depending on state legislation, can be severely restricted.

Many of us put off estate planning for one reason or another. We know we need to do something, but we wait. We defer making a decision.

Why do we put off estate planning?

Some reasons may be:

  • lack of time
  • budget concerns
  • not knowing exactly what we need
  • we don’t want thing about death or crisis situations

But estate planning doesn’t have to be complicated at all. Estate planning is really about taking control over your own life and legacy and providing for who and what you love.

Not planning, means letting someone else plan for you. LGBT individuals need to be proactive to ensure that their plans for the future reflect their own wishes and are not dictated by laws that do not fit your life and relationships or individuals who are not involved in your life and relationships.

Estate planning is an opportunity to protect your wishes and loved ones - LegalOut provides you with affordable solutions to start your estate plan - get started now for a piece of mind!

How does LegalOut work?

It only takes three easy steps to safeguard your rights:

1. Select the documents that are right for you.

2. Review your documents using our simple online tools.

3. Finalize your documents. We’ll give you clear instructions at every step of the way.

Create a Basic Estate Plan:

At a minimum, any basic estate plan should include the following documents (click the link to learn more about the document):

Safeguard your relationship, secure your financial, property and health care rights by taking action now with LegalOut’s estate planning legal documents.

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Maine: Same-Sex Marraige Law Repealed

November 4th, 2009

The passage of Question 1 in Maine (a referendum vetoing the state’s law recognizing same-sex marriages) feels like one step forward and two steps back. Opponents of the state’s marriage equality law campaigned on fear and misinformation. We must not let our spirits be broken but continue to to fight for equality.

Read The Lesson in Losing by Cody Daigle on what we can do as a community to reach marriage equality.

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Special Offer: $49.95 for Domestic Partnership Agreement

October 27th, 2009


Start your legal document now.

If you are part of a legally unmarried couple, you lack many of the protections and benefits the law extends to married couples. You must create your own safeguards by preparing legal documents.

A smart way to protect your rights is to prepare a Domestic Partnership Agreement, along with other estate planning legal documents.

And now LegalOut is offering members of the LGBT community affordable online do-it-yourself Domestic Partnership Agreement for only $49.95 or FREE with Easy Legal Care Proâ„¢ Free Trial. Take advantage of the deal today! >>

Click here to learn more about the online do-it-yourself Domestic Partnership Agreement.

Check Out Other Estate Planning Documents

A domestic partnership agreement primarily covers the sharing of income, expenses, and property, it doesn’t address other areas requiring protection. You should supplement your domestic partnership agreement with: Living Will, Will, Advance Health Care Directives, Hospital Visitation, Power of Attorney. Find more estate planning documents >>

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Same-sex marriages begin in Vermont

September 1st, 2009

Vermont is one of five states that now allow same-sex couples to marry. Massachusetts, Connecticut, New Hampshire and Iowa are the others.

Read the 365gay featured news story Same-sex marriages begin in Vermont -

Hooray for Ben & Jerry’s check out how they are celebrating marriage equality in Vermont:

In partnership with Freedom to Marry we are gathered here to celebrate Vermont and all the other great states where loving couples of all kinds are free to marry legally. We have ceremoniously dubbed our iconic flavor, Chubby Hubby to Hubby Hubby in support, and to raise awareness of the importance of marriage equality.

A great reason to eat some ice cream today!


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The Rainbow Babies

July 22nd, 2009

Rainbow Babies

Starting a family is an exciting time. There is much to think about, especially if you are in a same-sex partnership - there are medical, legal, financial, and spiritual areas to consider.

It could be an overwhelming process to get started but an educational Web site that makes it easy to access all types of LGBT parenting information is The Rainbow Babies.com, created by Angela Watson.

The Rainbow Babies site provides a central area for general information on the many aspects of LGBT pregnancies and parenting. Watson was inspired to create a site that provides timely information about starting a family whether by insemination, surrogacy, fostering or adoption after listening to her friends talk about their struggles with becoming parents and thought that if they could tell their stories, then other families-to-be could get encouragement and support.

So, in a crazy moment of inspiration, she thought that she would create a website where parents could post their family stories, as well as get timely information on ways to have families, read book and movie reviews related to LGBT families, as well as learn about pertinent legal and social issues related to being LGBT parents in the U.S. today.

Three years later, The Rainbow Babies continues to grow and thrive, currently featuring over 200 pages of nearly all original and exclusive content on every topic dealing with the special challenges of LGBT parenting.

If you have questions regarding donors, insemination process, how to select a sperm bank or interested in reading about LGBT parent stories, The Rainbow Babies provides articles and information for all these areas and more.

Read more LGBT parenting issues at The Rainbow Babies.

LegalOut Note:

If you are planning to start a family, in a long-term committed relationship, ensure your interests are followed should something unexpected occur.  Protect your wishes and family  by preparing legal documents. At minimum, any basic estate plan should include the following documents: Hospital Visitation Authorization, Living Will, Health Care Power of Attorney, Shared Parenting Agreement, Last Will and Testament, Power of Attorney. Protect yourself now - create legal documents.

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Adoption Resources for LGBT Couples and Individuals

July 22nd, 2009


Guest Blogger: LegalOut welcomes Independent Adoption Center (IAC) as a guest blogger to provide resources to LGBT families with their quest to adopt. IAC, founded in 1982, is a caring, open and supportive agency that understands the unique issues LGBT families face and has a long and proud tradition of working with gay and lesbian families in their pursuit to adopt.

LGBT families face some unique challenges when pursuing adoption. The biggest challenges are discriminatory laws and outdated, and unintentionally discriminatory, adoption agency practices.

Although adoption by LGBT families is outlawed in some states, and is difficult, though not illegal, in other states, in the vast majority of states LGBT adoptions are legal. The Independent Adoption Center (IAC) works with LGBT families to navigate the complexity of each state’s adoption laws to ensure that every adoption is done safely and legally.

The IAC is also committed to best practices in adoption, including practices that ensure the equal treatment of LGBT families. For example, a long standing practice at many adoption agencies is to ask birthparents if they are open to considering LGBT families before presenting family profiles.

This question implies that there would be some acceptable reason to consider excluding LGBT families.

The IAC has always taken the position that all families are equal and we do not ask birthparents if they are open to certain families. We assume they want to see all the families that are open to their situation so they can decide for themselves what is the best placement for their baby. As a result IAC has never had a longer wait time for LGBT families than for heterosexual families. In fact LGBT families have a shorter wait on average.

Although discriminatory laws are a problem in some states the IAC will work with LGBT families to ensure they adopt legally. We also are committed to ensuring best practices in adoption, and continually evaluate our program to ensure it serving all families equally.

Interested in learning more about adoption? Contact the IAC:  send an email or visit IAC Gay & Lesbians Families Web site.

Have an adoption question? Ask the Adoption Experts - Answers to All Your Adoption Questions.

Adoption Experts is a project by the Independent Adoption Center with the goal of spreading reliable information about domestic adoption, open adoption, and other adoption topics. Our experts have the answers to all your adoption questions. Ask your question now>>

Check out adoption stories written by some gay and lesbian families that have adopted through the IAC. Each of these families’ stories is as unique and incredible as the individuals who make up all of our open adoptive families. Read more>>

LegalOut Note:
If you are planning to start a family, in a long-term committed relationship, ensure your interests are followed should something unexpected occur.  Protect your wishes and family  by preparing legal documents. At minimum, any basic estate plan should include the following documents: Hospital Visitation Authorization, Living Will, Health Care Power of Attorney, Shared Parenting Agreement, Last Will and Testament, Power of Attorney. Protect yourself now - create legal documents.

Visit Legalout’s LGBT Issues section to learn more about adoption laws and terms.

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