In less than half a month, the Vermont gay and lesbian community will celebrate the 5th anniversary of the July 1, 2000, effective date of the state’s civil union law.

The law, HB 847–which broke new ground–was passed by the Vermont legislature and signed by then-Gov. Howard Dean on April 26, 2000. Since then, Massachusetts enacted legislation in 2004 to permit gay marriages and Connecticut enacted a civil union law in May 2005. Several other states including California, Hawaii, Maine and New Jersey offer some spousal right or domestic partnership type of protection, according to the Human Rights Campaign, Washington.

However, 42 states have statutory Defense of Marriage Acts with 3 of those states defining marriage as between a man and a woman, according to the National Conference of State Legislatures, Denver. Eighteen states have defense of marriage in their constitutions and 7 states have neither.

Those states are Connecticut, Massachusetts, New Jersey, New Mexico, New York, Rhode Island and Wisconsin.

Five years later after Vermont’s action, financial and legal advisors are saying that in many ways the law has put financial issues on par with heterosexual married couples, although there are still points of difference that would be eliminated if full marriage benefits were afforded lesbian and gay people.

Beth Robinson, co-counsel in Baker vs. Vermont, the case that led to passage and enactment of the Vermont civil union law, says the law “changes the terrain in the state,” but the situation is not “an unqualified yes.”

In Vermont, two partners who are joined in a civil union are afforded legal and financial rights of a married couple, but if the right is tied to federal law, then they are not, explains Robinson, an attorney with Langrock Sperry & Wool, Middlebury, Vt.

So, in Vermont, any provider of health or accident benefits is required to provide spousal coverage for individuals in civil unions, Robinson explains.

However, in the case of pension plans governed by the federal Employee Retirement Income Security Act of 1974, the case is less clear and there are two camps of thought, she says. One camp maintains that U.S. Supreme Court case history would favor states’ rights to regulate plans, while the other argues for federal authority, according to Robinson.

In terms of benefits that a company provides, Robinson says the location of the employee and not the location of the company is the determining factor in deciding benefits for a civil union partner.

The civil union law provided legal benefits such as protection under the right of tenancy by entirety, a law addressing property owned jointly by married couples, she says. Married tenants cannot have jointly owned property attached to pay for the debts of one spouse, Robinson says. If the spouses have joint debt, then the property can be attached, she adds. With the civil union law, gay and lesbian civil union partners now have that same right, she explains.

Going to another state can have consequences for a civil union couple, however. In the case of one Vermont client, who went into premature labor because of a life threatening situation and was brought to a New Hampshire hospital, the right of a spouse to make decisions was not available. Consequently, in that case, the decision was made to transfer the patient to a Vermont hospital so the civil union benefits would be applicable to her civil union partner if medical decisions needed to be made.

Josh Patrick, a certified financial planner with the Patrick Group, South Burlington, Vt., says he probably would not treat financial planning any differently than if there were no civil unions. The reason, he explains, is that a couple may not decide to stay in Vermont and other states do not have civil union laws. He says that to date he has not worked on any such cases.

“Advisors and financial planners need to know not just the rules but the exception to the rules,” says Debra Neiman, a certified financial planner with Neiman-Maloy Financial Group, Wakefield, Mass., and co-author of “Money Without Matrimony.”

For example, Neiman notes a case in which a couple who had a civil union in Vermont filed a state tax return in their own state and had the department of revenue in their state reject their return. The matter is currently in court, she says.

As a planner in Massachusetts, she says she sits down with gay and lesbian clients and goes through their plans point by point upon their marriage. For example, all beneficiary statements need to be changed from partner to spouse, she explains.

But even so, there are still areas of uncertainty regarding federal law, she notes. As an example, she says that in a husband-wife situation if a client dies, the surviving spouse could roll over an IRA into the survivor’s name and continue tax deferred benefits. But since federal law applies, it might take litigation to settle the matter in the case of a gay or lesbian couple, Neiman continues.

Another instance Neiman cites is a divorce of a gay couple or a dissolution of their union. If alimony is involved, the alimony could be considered a gift and a gift tax could apply, she says.

James Hedbor, a certified financial planner with Comprehensive Planning Associates, Colchester, Va., says he has one client who is in a civil union.

There are points that a financial planner needs to review, Hedbor says. For instance, his client has a buy-sell agreement with his brother for a jointly owned business. Since “civil unions are exactly the same as a marriage under law,” the client’s partner is entitled to the same rights as a spouse and that had to be reviewed to make sure it was all right with all parties.

Another point he raises is that if a civil union partner dies intestate, then the surviving partner would have the same rights as a spouse and even if there is a will, the partner can choose to make an election against that will.

Civil union partners, he says, also have the same consideration for issues connected to natural or adopted children. Also, Hedbor says, the criteria for issuing a life insurance policy is the same as for married couples: who gets hurt financially if the partner dies.

If there is a dissolution, the same factors are used as if there were a divorce, he continues.

The real rub, Hedbor continues, is an issue that arises if someone who lives in another state was granted a civil union in Vermont or got married in Massachusetts. If a couple in Georgia goes to court in their home state, the civil union or marriage would not be recognized, he says.

The Stats

JOINING AND PARTING IN VERMONT

Civil Unions Dissolutions

2004 711 38

2003 1,397 14

2002 1,707 9

2001 1,876 4

2000 1,709 0

Source: Vermont Dept. of Health