New Colorado Law Regarding Joint Filing of Tax Returns for All Married Couples

denver elder law

my violets

 

I will start with a reminiscence. Back when I was in law school (alas, the previous century. . . !) I think I can remember at least one thing from my family law class.  That was the axiom “a marriage valid where celebrated is valid everywhere.”  That was thanks to the Full Faith and Credit Clause of the United States Constitution, which states

Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.

U.S. Const., Art. IV, section 1.  You U.S. history mavens may recall that the Articles of Confederation included a part of this language, but it didn’t [like the rest of the Articles, and the Confederacy as a whole] go quite far enough, so James Madison’s request for supplemental language at the Constitutional Convention was adopted.  If you really want to go crazy on this one, read The Federalist Papers, No. 42. . . .

It may not sound like such a pronouncement would really be necessary, but that conclusion would skip over much of our history.  In our present context of “domestic relations,” remember that Colorado, along with a handful of other “frontier” states, has for many years recognized common law marriage.  That was an issue for tax filing for those couples, as those common law marriages weren’t valid in other states.  Hence, the Revenue Ruling.  In Colorado, it remains one of the indicia of common law marriage – that a couple is “holding out” as married for federal tax purposes.  In case you’re wondering, I will cheerfully decline this opportunity to explain in any detail the legal significance of a “Revenue Ruling” by the Internal Revenue Service.  Under our administrative law system, I will cite Wikipedia:

A Revenue Ruling is “an official interpretation by the [Internal Revenue] Service that has been published in the Internal Revenue Bulletin. Revenue Rulings are issued only by the National Office and are published for the information and guidance of taxpayers, Internal Revenue Service officials, and others concerned.”26 C.F.R. sec. 601.601(d)(2)(i)(a).   Revenue Rulings are published “to promote correct and uniform application of the tax laws by Internal Revenue Service employees and to assist taxpayers in attaining maximum voluntary compliance by informing Service personnel and the public of National Office interpretations of the internal revenue laws, related statutes, treaties, regulations, and statements of Service procedures affecting the rights and duties of taxpayers.” 26 C.F.R. sec. 601.601(d)(2)(iii). See, generally, Mitchell Rogovin & Donald L. Korb, “The Four R’s Revisited: Regulations, Rulings, Reliance, and Retroactivity in the 21st Century: A View From Within”, 46 Duquesne Law Review 323, 330 (2008).

The federal Defense of Marriage Act changed all that Full Faith and Credit status quo. It was a reaction to the passage of state laws recognizing same gender marriage and “tweaked” if you will, the Full Faith and Credit Clause.  The old IRS Revenue Ruling from 1958 [Rev. Rul. 58-66] was re-engineered in light of the decision in United States v. Windsor, 570 U.S.___, 133 S. Ct. 2675 (2013) which held parts of the Defense of Marriage Act unconstitutional.    You can read the new Rev. Ruling 2013-17 here.  This Rev. Ruling basically reinterprets “husband” and “wife” to include same-sex spouses for purposes of the Internal Revenue Code.  The IRS also has a helpful FAQ on their website that basically says, if you were married somewhere in a domestic or foreign jurisdiction whose laws recognize the marriage of same-sex spouses, then you can file jointly.

I don’t usually say this in a blog post but this post is NOT to be used as any kind of tax advice, as this is educational information only about the new Colorado law.  Based on my reading, for educational purposes only as I have said – this in NOT tax or legal advice for your particular situation – the bottom line for Colorado same-gender partners is – you have to be married outside Colorado to avail yourselves of the joint filing benefits, as a Colorado civil union will not get you there.  I do not mean this to minimize the importance of the new statute to clarify an otherwise rather murky situation.

So what about the details of this bill signed into law by Gov. Hickenlooper on Feb. 27, 2014 (SB 14-109, entitled “Concerning the State Income Tax Filing Status of Two Taxpayers Who May Legally File a Joint Federal Tax Return.” )? Well, you can read it here.  It basically says that if federal law allows you, as a married couple, to file jointly for tax purposes (according to the Rev Rulings), then you can file jointly for Colorado purposes.  If you don’t meet the standard under federal law, then no Colorado joint filing is available. Fairly straightforward, but also very complicated.  I really thought this would be a short post . . .  I tried!  thanks to T and P for “calling for the question.”

  ©Barbara Cashman  2014   www.DenverElderLaw.org

PS No blog post next week. . . .

When Death is Not Death: a Reprise

 

Waterton Waters

Waterton Waters

Perhaps a more appropriate title would be “when dying is not dying.”  This is a follow up to an earlier post about “brain death” for organ donation purposes and how the use of medical technology can ethically complicate a person’s dying.  The Boston Globe had a good article about a source of interference for a terminally ill person’s otherwise natural dying process: the implantable cardioverter defibrillator.  Turns out that prolonging life for someone with a chronic disease can have repercussions when the person is dying of a terminal illness or other natural causes.  Read the article “Lifesaving implants complicate end-of-life care” here.  Another troubling issue which is broader than that of the ICD deactivation is when a pacemaker-dependent patient is terminally ill and requests deactivation of the device.  Doctors distinguish between the ethical decisions of these two actions.  You can read a medical journal article about the 2008 Guidelines for Device-Based Therapy of Cardiac Rhythm Abnormalities here.

The implants are basically small, internal versions of the paddles that emergency rooms use to shock patients’ malfunctioning hearts – and these are saving many lives. But in some cases they also are making the act of dying, the process of letting go and saying goodbye much harder, because they are forcing terminally ill patients and families to make wrenching decisions about turning them off. The devices subject some dying patients to painful jolts and can prolong their suffering.  These jolts to a person’s otherwise dying body are also traumatizing to loved ones and can make the dying process more difficult in unanticipated ways.

Implants aren’t the only complications for end of life issues facing an individual or family.  TPN or total parenteral nutrition has served to extend many lives which would have been shortened due to short bowel syndrome or intestinal failure.  As a medical means of extending life for these conditions, this type of intravenous feeding can also complicate end of life care when a person is suffering the effects of another disease process.  Dialysis can stave off renal failure for many years for those with failing kidneys.  What used to be fatal heart attacks and strokes can be more effectively treated in many elders, but the interventions may result in chronic complications or cognitive decline.

Health care POAs and advance directives are much more important for persons with these implants.  Prolonging life and not impeding dying – how do we separate out the two? Is aging and death a natural part of life or is it something that should be opposed as some would argue, essentially that we should be pursuing a “cure” for aging?

I have previously written a post (or two) about the medical definition of “a good death,” and will avoid a discussion of the difficult distinction between quantity versus quality in end of life care.  These issues affect individuals and family members of elders in a much larger proportion, but the issues surrounding medical intervention at the end of a life are issues for all ages of people, children and young adults on life support are much more challenging to us in many ways because these deaths go against the “natural order” of a parent dying before a child.

How to determine what would be a good death is a very individual choice which doctors and medical providers can help facilitate, but they are not the ones properly in charge of making such a determination for a patient or a patient’s family.  Thinking about these difficult questions now and discussing feelings about these scenarios with family members can lighten a potential burden immeasurably.    So what can you do now to start the difficult conversation?  I still like the American Bar Association’s Consumer’s Toolkit for Health Care Advance Planning because it has great topics to break down the process into manageable conversations around issues like Are Some Conditions Worse than Death? and Personal Priorities and Spiritual Values Important to Your Medical Decisions.

These questions are best discussed by family members in advance of a crisis.  The discussion can avert or greatly diminish potential conflict among family members with differing opinions.  Don’t put this opportunity off until it’s too late, especially when so many helpful resources exist to help you get started.

©Barbara Cashman  2014   www.DenverElderLaw.org

Longevity Planning for Childless Adults

Fall at Monet Garden, DBG

Fall at Monet Garden, DBG

Okay, I’ve written about several different scenarios in the estate and disability planning context, along with identifying some of the difficult conversations and decisions people need to make while they have the luxury of time to carefully consider things, not in the midst of crisis or catastrophe.  Many older adults, individuals as well as couples, do not have children.  Without children, there is no automatic safety net (whether you consider that accurate or not, that is the subject of another blog post!) for persons doing disability or longevity planning and no “natural bounty” for their estate planning.  Some of my clients have been childless adults who have provided care for an aging parent.  Some of them have asked themselves – who will provide this care for me?

I am going to focus on the longevity and disability planning angle here.  This topic came to me via Professor Rebecca Morgan’s post in the Elder Law Prof Blog entitled “Who Are the Caregivers for Elders Without Children?”  Her short post cites to a NY Times post of Feb. 14, 2014 entitled “The Childless Plan for Their Fading Days.”  This topic was discussed by my study group (a small group of women estate and elder law attorneys) in the context of new Colorado legislation that is focused on a subgroup within that childless segment of elders, the elders who are in frail health and have lost the capacity for decision-making and who do not have family members or others.  These are folks who have no named proxy or surrogate decision makers (like an agent under a health care power of attorney) and are “friendless.”   This is a challenge for persons receiving care in institutions as well as those residing in their own homes.  Unlike many other states, Colorado does not currently have an Office of the Public Guardian, but one is being examined through a Public Guardian Advisory Committee.  You can read a good 2005 study entitled “Wards of the State: A National Study of Public Guardianship” here.

If you are an elder without children, there are many questions that must be asked and answered in order to put together a “safety net.”  One of the questions posed in the NY Times article above is “what are those childless people doing with all that extra money?”  Those of us with children are familiar with the economics of child-rearing!  Of course many parents hope to leave an inheritance of some kind to their offspring.  Interesting though that so many baby boomers with kids, who as a class are the recipients of the largest transfer of inherited wealth, don’t plan on leaving their kids a dime – they plan on spending it before they die.

This intersection of financial planning and disability planning known as longevity planning is a tightrope walk because none of us can see into the future to determine how much money we will need, for what kind of living expenses (or global travel) – let alone how long we will live….  A growing number of Americans are opting out of the view that doctors should do everything possible to keep a patient alive. You can read the Pew Research Center’s 2013 report on this topic here.

But here’s a good place for a single person with no kids to get started:

  • Identify who will be the agent under a health care power of attorney.  This person will be the one who can give informed consent for medical care in the event the person, known as the principal for POA purposes, and should be well-informed of the principal’s health care values, end-of-life wishes and so on.
  • The health care agent would be well-informed to know of the principal’s desires about “aging in place” or staying at home and receiving care if such is needed.  In the relatively rare event that the health care POA does not work for its intended purpose (to avoid the need for initiating guardianship proceedings), the agent is typically nominated as guardian.
  • Bottom line here is to make it easy for people to be able to help – and the most important step is identifying those people and providing them with the information they need in the event they need to act as agent.
  • Financial matters can be a bit more challenging of several different levels, but there may be more options available to people now that there are more persons employed as professional fiduciaries who take care of a person’s bills, manage their investment portfolios and lots of activities in-between.

Childless persons can be creative about who they tap for these types of jobs.  Friends who are age-mates might be problematic, but most people have nieces, nephews, friends, neighbors and other community members who would be willing to serve in these roles.  It is best when a person initiates this conversation on their own, when such services are not needed, as if there is an emergency and someone “swoops in” to assist in a pinch – this may not always be for the right reasons or for reasons which serve the principal’s needs and interests.  Best to follow that Boy Scout motto and be prepared!

“If the only prayer you said in your whole life was, thank you, that would suffice.”

― Meister Eckhart

 ©Barbara Cashman  2014   www.DenverElderLaw.org