For many gay couples, the opportunity to marry is a dream come true, but without the proper planning, it could turn into something more like nightmare. Gay couples are frequently surprised by the legalities later.
Regulations and snafus can be difficult to navigate and causing stress and expense in the future…
One question is, will gay couples be treated in the same manner financially as heterosexual couples? The answer is yes and no.
"For example, in Connecticut, the Supreme Court recognized gay marriage in 2008 and the legislature codified it," says matrimonial attorney Richard Terbrusch of the Terbrusch Law Firm, LLC. "Essentially, this made the state's laws on marriage and divorce gender and orientation neutral.”
"But the word 'essentially' is where the rub lies. Because the federal government and some states don't recognize same sex marriages, these couples face a number of challenges impacting the transfer of wealth upon marriage, divorce or death. Over 1,000 federal laws take marital status into account, often with negative consequences."
For example, on the federal level, the Defense of Marriage Act (DOMA) prevents same sex couples from:
· Filing joint tax returns;
· Obtaining Social Security Survivor benefits;
· Taking advantage of spousal transfer exemptions for estate planning purposes.
Take the example of a gay couple in Massachusetts who had been together for sixty years. They were officially married in 2004 shortly after it became legal to do so in Massachusetts. When one spouse died in 2008, the surviving spouse was blocked from receiving social security survivor benefits because the marriage, although recognized under state law, was not recognized under DOMA. While the benefit amounted to only $700 per month, multiplied over the rest of the surviving spouses’ lifetime it could have easily been worth $100,000.
Additionally, almost like a will, a pension may not be awarded to a partner in a state where gay marriage is not legal.
Financial complications are not the only problem, what if they don’t live happily ever after…
"And there are other complications. Case in point, getting married in one state does not necessarily confer jurisdiction to be divorced in another state," Terbrusch adds. "If a same sex couple travels to a state to marry from a home state that does not recognize gay marriage - they may not be able to get divorced in their home state. The non-recognition of their marriage in their home state means they will not be able to take advantage of that state’s divorce laws when dividing their financial assets, even if those terms are advantageous.”
Additionally if couples travel to a state to get married and then later return there to get divorced, it won’t happen quickly. At least one partner needs to live in the state for at least 12 months before the couple can be divorced there.
The Obama administration’s recent decision not to defend DOMA in court will have little day-to-day impact for married gay couples. However, while those challenging DOMA in court – a costly and long process – may not face opposition from Obama Administration lawyers, they may suffer from the adverse consequences at the state level. Furthermore, federal agencies must still follow and enforce DOMA until such time it is overturned or repealed. Finally, the Obama administration’s decision has no effect on state laws in states where gay marriage is not recognized.
There is a way to avoid the pitfalls…
“Fortunately, most of the unfavorable aspects of non-recognition can be defeated through a well drafted pre-nuptial agreement.” Terbrusch adds. “For example, a same sex couple can, in the event of a divorce, agree to submit themselves to the jurisdiction of their state’s courts (and require physical relocation if necessary) in the event that they have relocated to a non-recognition state since becoming married.
Richard P. Terbrusch is a Connecticut attorney and principal of The Terbrusch Law Firm, LLC, practicing in Family Law, Probate (trust and estates) and Bankruptcy. He formerly worked for the Connecticut Judicial Branch, ending a seventeen year career as an Attorney for the Chief Court Administrator, who is the Judge responsible for the daily operations of all State Courts in Connecticut. Prior, he was an eight year veteran of the Connecticut Family Magistrate Court where he supervised the enforcement of child support orders. For more information, please visit www.prenupsforall.com.