Same-Sex Marriage: Estate Planning Changes
There are many financial and legal minefields to watch out for with marriage, since same sex marriages aren?t recognized at the federal level.
So, You Want to Get Hitched?
If you have minor children living with you, marriage may be important to provide
long-term stability for them.
If you have minimal assets, it?s easier to start a marriage with a clean slate. When you eventually buy a home, you?ll probably both contribute to the down payment and monthly mortgage payments. A written agreement, that lays out the details, will help you divide the assets in an equitable way should you ever, God forbid, get divorced.
And, yes, a certain percentage of same-sex marriages will end in divorce. Of more than 7,000 such marriages so far in Massachusetts thus far, there have already been some divorces. The Probate and Family Courts around the state have never been a venue for lesbians and gays ending their relationship. Usually the only option was mediation or filing suit for breach of contract. But that?s about to change, according to Boston attorney Gretchen Van Ness. ?Our community has always had long-term marriages,? she said. ?They just weren?t recognized by the courts. The average relationship length of those who?ve already married is more than 10 years. Lesbian and gay divorce will bring more equity to couples and create change in the courts.?
You can?t do a prenuptial agreement once you?re married. Prenups are for people who come to a relationship with their own assets and/or previous obligations. Salem, MA attorney Anthony C. Adamopoulos, said if ?one of you wants to leave an inheritance to children from a previous marriage or provide care for an elderly parent, a prenup makes sense. You?re going to want to be clear about these issues,? he said. ?Gays and lesbians are definitely asking more questions about pre-nuptials.? This may also be appropriate if either of you owned real estate before your marriage.
A typical prenup will be clear about what is separate and what is joint marital property and how each will be treated in a divorce. It should also state how assets/property will be divided in the event the couple moves to a state where same-sex marriages are not recognized.
Raising the issue of a prenuptial agreement isn?t always easy. If you aren?t the one to suggest it, you may feel that your partner doesn?t trust you?.why else would he/she suggest such a thing? Suggesting a prenuptial agreement doesn?t mean you don?t love or trust your soon-to-be-spouse. It?s a way for both of you to show that you appreciate and respect what the other is bringing to the marriage. Just as you plan for a disability, a long-term illness or a premature death, a prenuptial agreement provides a roadmap.
Maybe Marriage Isn?t Necessary for You
It?s entirely possible that marriage won?t be for you. And that?s certainly OK.
There are thousands of same-sex couples who have been together for years. They?ve already done their estate planning: wills, health care proxies and durable powers of attorney. Or, maybe they transferred their primary residence into a trust. Marriage will render their wills invalid. Under an 1892 Massachusetts law, marriage revokes a will unless the will is executed in contemplation of marriage.
If one of you gets health insurance through domestic partner benefits, slightly decreased state income taxes (on imputed income) may not be enough of an advantage as long as the employer continues the benefit. (Some employers have already indicated they?ll now eliminate d.p. benefits.) On the state income tax front, filing jointly means both AGI?s (Adjusted Gross Income?s) are added together so the 2% deductibility threshold of, say, unreimbursed business expenses, will be more difficult to reach.
Given the more than 1,100 federal benefits of marriage that don?t apply (as yet) to married, same-sex couples, it may not make sense to dissolve existing financial and estate planning already in place. Before you take the plunge, discuss the specifics of your situation with your attorney, your financial advisor, and your tax person. And then, if it all makes sense, call the wedding planner!