Archive for the 'Insurance' Category

Iowa Supreme Court Strikes Down Gay Marriage Ban

This is what happens when I schedule early morning meetings…  Everyone else gets the good stories out first.

The ABA Journal, The Volokh Conspiracy and Professor Berry’s ever-timely Wills, Trusts & Estates Prof Blog all wrote this morning to report on the Iowa Supreme Court striking down the state’s ban on same-sex marriages.  The decision was unanimous.

The court ruled the ban violates the equal protection clause of the Iowa Constitution, according to the Associated Press and the Des Moines Register.

“Our responsibility … is to protect constitutional rights of individuals from legislative enactments that have denied those rights, even when the rights have not yet been broadly accepted, were at one time unimagined, or challenge a deeply ingrained practice or law viewed to be impervious to the passage of time,” the opinion (PDF) said.

I added the emphasis there in the last sentence because it reminded of Lawrence v Texas overruling Bowers v Hardwick.  Bowers had been invoked more times than I care to count for its “deeply rooted in our Nations history” standard/B.S., that had, until the Lawrence case, stood as an insurmountable barrier to the equal rights of more than the just the GLBT community.

“We are firmly convinced the exclusion of gay and lesbian people from the institution of civil marriage does not substantially further any important governmental objective. The legislature has excluded a historically disfavored class of persons from a supremely important civil institution without a constitutionally sufficient justification. There is no material fact, genuinely in dispute, that can affect this determination” the Court stated.

The Court stated further.

The court stated that “a statute inconsistent with the Iowa constitution must be declared void even though it may be supported by strong and deep-seated traditional beliefs and popular opinion.”

Also interesting, according this story at the New York Times, is Iowa’s lack of a residency standard for marriage licenses…  I think you see where this is going.  Have you ever seen a Pride Parade adjacent to a cornfield?  Neither have I.  But I bet its pretty cool.

Above The Law writes:

Not surprisingly, a spokesperson for the Iowa Family Policy Center was deeply sadden [sic] that more people will be allowed to get married:

Bryan English, spokesman for the Iowa Family Policy Center, a conservative group that opposes same-sex marriage, said many Iowans are disappointed with the ruling and don’t want the courts to decide the issue.

“I would say the mood is one of mourning right now in a lot of ways, and yet the first thing we did after internalizing the decision was to walk across the street and begin the process of lobbying our legislators to let the people of Iowa vote,” Mr. English said. “This is an issue that will define (lawmakers’) leadership. This is not a side issue.”

Iowa is now the first Midwestern state, and the fourth nationwide, to allow same-sex marriages.

Financing Your Life Insurance Premiums

This interesting idea comes to us today by Greg Herman-Giddens of The North Carolina Estate Planning Blog.  Greg writes:

Many of us could use more insurance for estate planning  purposes, such as financial security  for loved ones or payment of estate taxes. Most of us also have an unused asset, our insurance capacity. That is the amount of insurance for which we could qualify and is based on the projected value of our assets at life expectancy. For most people, the capacity is unused because of a reluctance to pay hefty insurance premiums.

How do we reach this capacity without bankrupting ourselves:  use the death benefit of the policy itself as the collateral for the loan you would use to pay the premiums.

Greg points out – rightfully so – that there would be no estate tax ramifications of the policy is held in an irrevocable life insurance trust and the life settlement market provides (potentially anyways) an exit strategy to accommodate an unforeseen change in circumstances.

Great post Greg, thanks!.

A Growing Conflict

Many states have laws that describe what happens when a child is conceived during the term of a marriage but not born until after one of the parents passes away. But what happens when a child is posthumously-conceived? What happens when a child is conceived after the death of one of the parents? The two cases below seem to hint at a growing conflict among the few state courts that have addressed the issue:

  1. In this post a The New York surrogate court was asked the following question: “Are posthumous children conceived using biotechnology “issue” and “descendants” for purposes of being beneficiaries of a trust?” They answered in the affirmative. In In re Martin B. (Sur. Ct. 2007), 841 N.Y.S.2d 207, a wife preserved her husband’s sperm and, several years after his death, used it to conceive two children. Decedent’s father had a trust that allowed portions of his trust’s principal to be distributed to his “issue” and “descendants.” This case was brought after decedent’s death to decide whether the settlor’s son’s posthumous children were qualified beneficiaries of this trust.

    Professor Berry
    writes: “In deciding this issue, the court considered The Restatement of Property. The Restatement provides that a child of assisted reproduction is considered a child of a person who consented to parenthood but was prevented from becoming a parent by death. The court stated that “if an individual considers a child to be his or her own, society through its laws should do so as well.”
  2. This case appears to go the other way… Posted here is the retelling of this story from the Arkansas News Bureau, Jan. 11, 2008 titled: Court: Embryo implanted in mother’s womb after father’s death not an heir: “A child conceived through in vitro fertilization but implanted in his mother’s womb after his father’s death is not automatically considered his father’s heir under Arkansas’ inheritance laws, the state Supreme Court said Thursday in an advisory opinion.The court issued the opinion in response to a request from a federal judge in an Arkansas woman’s lawsuit against the Social Security Administration over its denial of her claim for “child’s insurance benefits.”The Supreme Court noted that the state statute governing intestacy * * * was enacted in 1969, before the technology of in vitro fertilization was developed, and therefore does not address the issue.Because the law predates the technology, “we can definitively say that the General Assembly … did not intend for the statute to permit a child, created though in vitro fertilization and implanted after the father’s death, to inherit under intestate succession,” Justice Paul Danielson wrote.

    Danielson wrote that it is not the court’s role to create law, but he added that “we strongly encourage the General Assembly to revisit the intestacy succession statutes to address the issues involved in the instant case and those that have not but will likely evolve.”

    The full case can be downloaded as a PDF here. The court took the much easier way out by relying on the implicit intent of the general assembly and expressly declined to define the word “conceive.”

Many thanks (again!) to Professor Berry for his wide reach among the various experts in this field. To our great benefit his resources appear to be limitless.

Larry King Life Settlement Update

Joel A. Schoenmeyer of the Death & Taxes Blog (one of my favorites) writes here about Mr. King’s life settlement woes and makes a good distinction that I had thus far failed to point out:

Note that the type of life insurance settlement mentioned in the article is not the same as a viatical settlement, which was a concept that became popular about a decade ago. Viatical settlements were used in cases of terminally ill individuals (such as individuals with AIDS), to free up money for treatment, etc.

By contrast, life insurance settlements are used by individuals who are not terminally ill, individuals who have existing policies on which they no longer want to pay the premiums.

Thanks Joel – good to see you posting again!

Also, I’m about to be quoted in the National Underwriter in their impending article on Mr. King and life settlements… Stay tuned!

Know Your Expert’s Certifications

The New York Times today ran a great piece on how disturbingly easy it can be to get “credentialed” in a way that makes one sound like an expert in financial planning, when really all they’ve done is sat through a three-day course and took a test with questions like “Marketing can best be described as:”

“There are limitless combinations of words getting invented to convey an expertise in senior finances,” said the Massachusetts securities regulator, William F. Galvin. “Most of them seem designed to trick seniors into listening to swindlers.”

[There are] tens of thousands of financial advisers working hand-in-hand with insurance companies to market themselves to older Americans using impressive-sounding credentials like Certified Elder Planning Specialist, Registered Financial Gerontologist, Certified Retirement Financial Adviser and Certified Senior Adviser.

Many of these titles can be earned in just a few days from for-profit businesses, and sound similar to established credentials, like Certified Financial Planner, that require years of study, difficult tests and extensive background checks.

And when they’re out they start selling the same ill-advised junk: Variable and deferred annuities to elder clients on fixed incomes. Almost always a bad idea.

Know your adviser!

And know how and why he or she is able to serve in that very important capacity. A few questions can save you and you heirs a lot of money, time and trouble.