Altar-Bound at Last: Legal Considerations for Engaged Same-Sex Couples
For most of history, marriage was a mirage – visible but unreachable – for gay and lesbian couples.
By contract or by title, same-sex couples bequeathed property through their wills and jointly held real estate, and checking, savings and investment accounts. It was not uncommon for longtime couples to cobble together an assortment of property and trust agreements to protect each other. Powers of attorney were carefully drafted to ensure that loving partners could make critical health care and financial decisions in the event of incapacity.
The dream didn’t begin to materialize until 2003, when the Massachusetts Supreme Court ruled that same-sex couples could marry, culminating in the U.S. Supreme Court’s ruling on June 26, 2015, that all Americans have the right to marry and to partake in the statutory protections that come with marriage.
As wonderful a day as that was, in fact, true marriage equality still does not exist in spite of the landmark Obergefell decision. While the right to marriage is equal, the benefits of marriage are still skewed when many state and federal laws grant certain benefits based on a length of marriage calculation.
For example, long-term, same-sex couples who had no ability to marry prior to the U.S. Supreme Court decision may not meet the requisite 10-year eligibility period to qualify for Social Security spousal benefits. Similarly, if a same-sex couples marries and then divorces, time spent together and property acquired prior to their official date of marriage may not meet the statutory definitions of community property or marital property.
As couples look ahead – at long last – to their wedding days, it may be wise to recognize their years together and contractually memorialize their intentions. Through either prenuptial or post-nuptial agreements, same sex-couples can designate an agreed-upon year from which to calculate alimony, or the designation of marital property. Generally, such agreements would limit the amount, term, and potential alimony, as well as establish the assets of each spouse. If by contract, a couple can limit certain responsibilities upon divorce that the law otherwise provides, the corollary seems equally true. However, there are not yet any cases interpreting this approach.
Many questions and issues will undoubtedly arise. If, for example, a couple self-imposes a term of marriage as controlling for alimony purposes, will the Internal Revenue Service consider alimony paid as deductible and alimony received as income?
It is likely that there are certain limitations to the contractual date of marriage approach. A newlywed but long-term same-sex couple cannot by contract take advantage of Social Security benefits whereby the lower-earning spouse can choose to collect a benefit based on either his or her own earnings, or the earnings of the higher-paid spouse. Similarly, in the event of a divorce, same-sex couples cannot by contract turn back the clock so that a divorced spouse has a right to survivor benefits or a divorced spouse’s benefits.
There are also a number of snares for the unwary. For years, same-sex couples could name anyone as a beneficiary of their 401(k) or other similar estate planning tool. Upon marriage, that unfettered right to name a beneficiary ceases. Same-sex couples should review their beneficiary designations. Many states also provide that a will executed prior to marriage is automatically revoked upon marriage.
Higher-income same-sex couples are strongly advised to consult with a tax advisor and an estate attorney to ensure that they maximize tax advantages available to married couples, including the unlimited marital deduction for gifts and transfers between spouses as well as the unlimited marital deduction from federal estate taxes. Powers of attorney and health care directives also should be carefully reviewed and amended to reflect their new marital status. Even the more mundane advantages previously denied to many same sex couples, such as family car insurance, or family health insurance, now are available. Their advantages and disadvantages, if any, require careful consideration.
One suggestion for long-term same-sex couples about to marry is that they include in prenuptial agreements arbitration provisions addressing interpretation and application of their intentions. There are several reasons to do so. Gaining equality of the right to marry does not equate to equality in the workplace. Some couples may elect to keep their marriage private. Arbitration can be a more flexible forum than a traditional public court, ensuring that the intent of the couple is realized, while maintaining privacy. This also circumvents the possibility of assignment to a judge or jurors who may have misgivings or prejudices against same-sex marriage, resulting in unpredictable outcomes.
The U.S. Supreme Court has unequivocally recognized that all couples have a fundamental right to marry as an expression of love. Undoubtedly, there will be future litigation tackling the less romantic and somewhat unique issues that arise when longtime same-sex couples divorce.
Cynthia D. Wright is a partner at Boyd, Collar, Nolen & Tuggle, which was among the first family law firms in Georgia to launch a same-sex practice. She served as a Fulton County Superior Court judge from 1996 to 2014, including two terms as chief judge. She was a Fulton County State Court judge from 1995 to 1996 and was chief legal counsel to Gov. Zell Miller from 1991 to 1995. Judge Wright was the first Fulton County Superior Court judge in the family court division. In her role as one of three family law judges, she presided over thousands of domestic cases throughout her 12 years of service in the family division. She may be reached at (770) 953-4300 or by email at firstname.lastname@example.org.