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Vermont lawmakers attracted national attention in 2000 when they tried to extend most of the economic benefits of a traditional marriage to same-sex couples.
But legal and financial advisors in the Green Mountain state say federal law has sharply limited the effects of Act 91, the "civil union act."
Donna Lescoe, a financial advisor with Choice Financial Services, Starksboro, Vt., now has an easier time getting gay and lesbian clients on their partners life insurance policies.
Before, "people had to show an insurable interest," Lescoe says. "Now, you dont have to go, Im gay! All I have to say now is, Thats a civil union."
Eileen Blackwood, a lawyer in Williston, Vt., says she worries a little less that blood relatives of a gay or lesbian client who dies will attack efforts to leave assets to the clients partner.
But "federal tax law hasnt changed," Blackwood says. "Under federal tax law, transfers between spouses are non-taxable events. For partners in a civil union, there is no exemption. You still have the issue of taxable transfers."
Many Vermont residents, including many Vermont Republican lawmakers, have argued that extending the economic benefits of marriage to same-sex couples will undermine the sanctity of a traditional marriage.
Supporters of the Vermont civil union act have taken the opposite position. They voted to require state-regulated tax collectors, insurers and employee benefit plans to offer civil union partners the same privileges and benefits they offer to married couples.
Sellers of state-regulated individual and family health insurance policies and state-regulated municipal employee health plans must treat civil union partners the same way they treat spouses.
Life insurers must offer civil union couples the same policies and contracts they offer to married couples, "except where prohibited by federal law, or where a benefit is limited under federal law to a married person," according to Regulation 2000-01-1H Civil Unions, a civil union regulation adopted by the Vermont Department of Banking, Insurance, Securities and Health Care in December 2000.
