• Curbing the legislative process: The Minnesota Defense of Marriage Act was passed by the legislature and could be repealed by the legislature, subject to a gubernatorial veto, at any time. The proposed amendment would prevent the legislature from recognizing same-sex marriage. Should they wish to do so, they would need to send another proposed amendment back to the voters. And in that second election, proponents of same-sex marriage would be at a disadvantage, because in Minnesota, anyone who shows up at the polls on election day but chooses not to vote on a constitutional question essentially counts as a “no” vote.
• Curbing the courts: If the proposed amendment passes, the courts will be prevented from finding that the current ban on same-sex marriage violates the state constitution. This type of court decision is how same-sex marriage was originally introduced in several states, including neighboring Iowa, and supporters of the amendment have explicitly stated that one of their goals is to prevent something like this from happening in Minnesota. Of course, the only way they can accomplish this goal is by writing discrimination directly into the constitution.
• Preventing recognition of out-of-state marriages: Earlier this year, a district court in Hennepin County found that the Minnesota Defense of Marriage Act did not prevent it from recognizing an out-of-state same-sex marriage for the limited purpose of identifying the heirs of a person who died without a will. If the amendment passes, courts considering similar questions in the future may be forced to rule differently.

While many are treating this election as a battle in a larger culture war, it is also a legal act with significant legal consequences affecting the lives of real people. Voters should carefully consider whether language declaring that one group of people will be treated differently from others really belongs in the state constitution.

What many people may not realize is that life insurance proceeds, although not subject to income tax, can be subject to estate tax. Specifically, if you own or control a policy on your own life, or if there is a policy on your life with your estate named as the beneficiary, the proceeds will be included in your taxable estate for both federal and Minnesota estate tax purposes.

Now, depending on what Congress decides to do after the outcome of this year’s election, the federal estate tax could soon be going away entirely. And if it is kept in place, it will probably only be imposed on very large estates. In Minnesota, however, all estates worth more than $1 million are subject to estate tax. That means that, if you live in Minnesota and you have at least $1 million of life insurance, you should be thinking about your estate tax planning options. These include:

• Pay the tax. If your potential estate tax liability is relatively small as a percentage of the life insurance proceeds your beneficiaries will receive, you may be willing to have a portion of the proceeds used to pay the tax. If you take this approach, you will need to be sure that your will is drafted to apportion a fair share of the estate tax liability to the beneficiaries of the policy.
• Put your life insurance in a trust. Creating an irrevocable life insurance trust (ILIT) to hold insurance on your life is generally regarded as the most foolproof way to avoid estate tax on life insurance proceeds. Because an ILIT is a very complex type of trust, it is preferable to use a professional trustee, who will typically charge a fee to administer the trust.
• Use other tax planning strategies. For some people, the costs of setting up and administering an ILIT will outweigh the potential benefits. However, it may still be possible to gain some benefits by transferring ownership of a life insurance policy to someone else and/or writing contingent trust provisions into your will. These approaches must, however, be planned out very carefully.

Which of these approaches is right for you will depend on your personal circumstances and priorities. In any case, if you are considering purchasing life insurance, now is the best time to carefully weigh your options. And if you already have an insurance policy that is large enough to have potential estate tax consequences, then the sooner you talk to an attorney, the better.

I don’t claim to know how things are in the other 49 states, but in Minnesota, a revocable living trust is not necessarily for everyone. As with every other estate planning document, it should only be used if it is the best tool to meet the specific needs of the person making the estate plan.

The major benefit cited by revocable living trust advocates is avoidance of probate, the legal process for distributing the assets of someone who has died. It is true that, in some states, probate can be unnecessarily expensive and time-consuming. In Minnesota, however, the probate code allows for small estates to be distributed by affidavit, a relatively simple procedure, and many other estates are eligible for informal probate, a faster and less expensive option than formal probate. In addition, attorney fees for probate cases are negotiable, which is not the case in some states.

Revocable trusts have two other frequently cited benefits. The first is privacy; when a person’s assets are administered through a trust rather than through probate, there is no public record of the administration. The second is incapacity planning; while powers of attorney are the most commonly used incapacity planning tools, trusts offer some additional flexibility. These are certainly legitimate benefits, but they must be weighed against the costs and potential complications of establishing and administering a trust.

It is also important to know the limits of what revocable living trusts can do. Specifically, this type of trust offers no benefit in terms of avoiding or reducing estate taxes, and it does not protect your assets from your creditors. There are trusts and other estate planning tools that can be used to address these issues, but the revocable living trust is not one of them.

Finally, it is important to avoid being lulled into a false sense of security by the statements that many promoters make about the simplicity and convenience of revocable living trusts. Once you have created one of these trusts, you must pay careful attention to how all of your assets are titled in order to gain the benefits of the trust. Also, the fact that a person had a trust does not remove the need to contact a lawyer after that person dies, as there may still be important estate administration tasks that need to be performed.

Revocable living trusts are a useful estate planning tool for many people, but they are not a one-size-fits-all solution to everyone’s estate plan. Anyone who tells you otherwise is probably trying to sell you something without going through the effort of meeting with you, learning about your goals, evaluating the costs and benefits of your different options, and drafting customized documents to meet your needs.

First, it is helpful to understand the facts of this case. According to the sources cited above, Minneapolis residents Thomas Proehl and James Morrison were married in California during the brief period in 2008 when same-sex marriage was legally recognized in that state. In 2011, Proehl died without having made a will, and at the time of his death, he had several solely owned assets in addition to those owned jointly with Morrison.

Because Proehl did not have a will, his assets needed to be distributed under Minnesota’s intestacy law. Under this law, in order for Morrison to inherit these assets, he needed to be recognized as Proehl’s spouse. Otherwise, Proehl’s parents would inherit. Proehl’s parents supported Morrison’s right to inherit, but he still needed to legally establish this right in court.

On Wednesday, the court ruled that the Minnesota Defense of Marriage Act — which reads, “A marriage entered into by persons of the same sex, either under common law or statute, that is recognized by another state or foreign jurisdiction is void in this state and contractual rights granted by virtue of the marriage or its termination are unenforceable in this state” — does not prevent the probate court from recognizing Morrison as Proehl’s spouse because the right to inherit under the intestacy law is not a “contractual right.”

Some caution is appropriate here. This ruling came from a single district court. And because Proehl’s parents apparently do not object to the outcome, there is unlikely to be an appeal that would allow the Court of Appeals or Supreme Court to weigh in.

A different judge could very well find that the “void in this state” provision of the Defense of Marriage Act operates separately from the “contractual rights” provision to bar a same-sex spouse from inheriting. Also, this November, Minnesotans will vote on the proposed “marriage amendment” to the state constitution, which specifies, “only a union of one man and one woman shall be valid or recognized as a marriage in Minnesota.” If the amendment passes, the courts could interpret this language to bar claims such as Morrison’s.

It appears that this case turned out the way everyone involved wanted it to, so that is a positive outcome. But ultimately, unless and until full marriage equality is put in place, there is still a great deal of uncertainty about the inheritance rights of same-sex couples in the absence of a will or trust.

• In determining whether your will was executed validly, the Minnesota courts will apply the law of the state where the will was made, rather than Minnesota law. So if you have any question about whether your will is valid, you will need to evaluate it under the law of your former state.
• If your witnesses did not “self-prove” their signatures by executing notarized affidavits attesting that they saw you sign your will, the Minnesota courts may require your personal representative (executor) to locate those witnesses in order to prove that your will is valid.
• Perhaps most importantly, your will may represent advice that you were given by an attorney in your former state that was specifically based on the laws of that state. Those laws may be different from Minnesota law. For instance, your former state may have different laws on inheritance by minors, or it may have a different type of estate or inheritance tax — or no such tax at all.

All of these issues aside, it is generally a good idea to have an attorney review your estate plan periodically, and especially after a major life change. So while an out-of-state will may be valid in Minnesota, there are some very good reasons to consult an in-state lawyer about your will.