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June 2010 Archives

Prop 8 - Unlawful Discrimination or Rational Law - case argued today

The Prop 8 gay marriage ban case is being argued today in California.  The parties challenging the law are being represented by a team that brings together former Bush v. Gore adversaries Ted Olsen and David Boies.  As described in a Reuters report the District Judge will be considering the reasons why California voters passed Proposition 8 - is there a rational basis, or a good reason to have this law or is it motivated by a desire to discriminate against a certain class of people?  In their brief to the Court, Olsen and Boies write, "Voters' unfounded and discriminatory stereotypes are not a substitute for proof that a law actually furthers a legitimate state interest."   Olsen and Boies also argue that same-sex couples who marry improve both their health and wealth, their children benefit and the state itself benefits. As reported by the San Jose Mercury-News lawyers from both the offices of California Governor Arnold Schwarzenegger and Attorney General Jerry Brown declined to make any argument to defend the state law. Defense of the law is led by  Charles Cooper who argues that allowing same-sex couples to marry will weaken the institution of marriage by removing the "special encouragement" for couples to stay together and raise children.  Cooper further writes, "These changes are likely to reduce the willingness of biological parents, especially fathers, to make the commitments and sacrifices necessary to marry, stay married, and play an active role in raising their children." After reading this, I have to wonder how much Mr. Cooper had to strain to come up with this argument.   As an attorney having worked in family law for over 20 years, I have personally observed that limiting marriage to heterosexual couples has not served to keep families together as evidence by the large docket of divorce and child custody dispute cases in the courts today - and in my office.  I fail to see how someone can take seriously the idea that by allowing certain individuals to marry that someone who has nothing to do with them will somehow feel less motivated to get married or to be a good spouse or parent. It is worth noting that none of the court decisions or statutes which have legalized same-sex marriage require any religious authority to celebrate, sanctify or officiate same-sex marriage - it would only be addressed at the laws and actions of the government.  Thus nobody whose religious beliefs oppose same-sex marriage need fear that the government will try to force their church to facilitate these marriages. Arguments are taking place today (June 16).  Whatever the decision of the District Court, it will almost certainly be appealed by the losing side and could eventually end up in the U.S. Supreme Court along with a number of other same-sex marriage cases pending around the country.

Billionaire's Heirs Big Winners in 2010 Estate Tax Gap

Fortuitous timing has saved a billionaire's estate huge estate taxes.  According to a New York Times report, Dan Duncan, who made a fortune from a network of natural gas processing plants and pipelines died in March of this year at the age of 77.  Had he died three months earlier, his multi-billion dollar estate would have been taxed at a rate of 45 percent or higher and, under current law, had lived into 2011, his estate would have been taxed at a rate of 55 percent.  Instead, Mr. Duncan's heirs benefit from the fact that Congress did not prevent the 2010 temporary lapse of the estate tax.  This was a result that was never really intended in Washington.  It was part of a gimmick compromise between the Bush Administration and its Republican allies on the one hand and Congressional Democrats on the other back in 2001.  Wanting to have tax relief but to cap the cost, they agreed to a sunset provision of the law with a one year moratorium on the estate tax.  Everyone, including me, assumed that something would be worked out before that happened but it did not.  An attempt to amend the law failed in December 2009.  So, Mr. Duncan's heirs benefit from some fortuitous timing.  While it may seem crass,  I think it is a good bet that discussions in some wealthy families are taking place about how long Grandpa or Grandma should be kept on life support - discussions that will become more urgent as the end of 2010 or (less likely) Congressional action approaches.  This strange legal situation could potentially put estate planning lawyers in the uncomfortable position of being asked to advise clients on the tax implications of the timing of death.  I also will not be surprised if we see an episode of one of the Law and Order shows based on a scenario of an elderly parent's demise being hastened due to estate tax considerations - are you reading and listening Dick Wolf?
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