September 2011 Archives

September 25, 2011

Same-Sex Divorce: It's Complicated

New York is now the seventh (and largest) jurisdiction to recognize same-sex marriage. This is an important and wonderful right for many couples and their families, which was evident in the media as we saw the first of these smiling and ecstatic couples marrying on July 24, 2011 and the days that followed.

While it may not seem romantic to think about these happy couples facing divorce and separation after they have waited so long for the right to marry, same-sex couples need to be extra vigilant to protect themselves and their families in the event that they decide to end their marriage. Some of the issues about which they need to be concerned include:

Lack of Federal Rights
The Defense of Marriage Act (DOMA), defines marriage as a legal union between persons of the opposite sex and permits states to refuse to legally acknowledge same-sex marriages performed in other states. The result is that a multitude of federal rights and obligations given to heterosexual spouses are unavailable to same-sex spouses. The Obama administration has refused to defend DOMA, claiming it is unconstitutional, but its existence makes divorces for same-sex couples even more complicated. For example, same-sex couples are not entitled to tax-free distribution of their spouse's pension and retirement funds, they cannot deduct spousal support payments from their income, they do not have the option of collecting social security based upon their spouse's income if they've been married for at least 10 years, and they are not entitled to COBRA benefits which would allow them keep their medical insurance offered through their spouse's employer for 36 months following divorce. Same-sex couples who divorce must consider this lack of federal rights when dividing their property and determining issues of spousal support.

Jurisdiction Issues
If a same-sex couple marries in New York, moves to one of the 44 states that do not recognize same-sex marriage, and then decides to divorce after being away from New York for one year, they will neither be able to divorce in that new state nor in New York. This is because the new state does not recognize their marriage and New York no longer has jurisdiction over it. It is therefore imperative that same-sex spouses think very carefully before moving to a state that does not recognize their marriage and that they draft a postnuptial agreement to define and protect their rights and obligations.

Child-Related Issues
In New York, there is a presumption that a child born during a marriage is the child of both spouses. The complication for same-sex divorcing couples in determining custody and child support arises when the non-biological parent has not adopted the child and they are living in a state that does not recognize their marriage. To protect both parents' rights and avoid the complications that may arise if the parents move away from New York, it is imperative that the non-biological parent adopt the child as soon as it is born.

The Importance of Prenuptial and Postnuptial Agreements
While prenuptial and postnuptial agreements cannot change the fact that a state may not have jurisdiction over the marriage of same-sex partners, it can make it clear that New York law will govern the issues of a marital dissolution. Additionally, these agreements offer many other protections that same-sex spouses and their children need in the event of divorce. For example, prenuptial and postnuptial agreements can outline:
- How child custody and child support will be handled (as long as children are already born at the time the agreement is written).
- How to handle the division of property between spouses given the fact that while these transfers are not taxed by states recognizing same-sex marriage, they are still taxed by the IRS.
- How to handle spousal support, which is also given preferential tax treatment by New York, but not by the IRS.

Same-sex couples need to make sure they have all the legal and tax information they need before they marry. By having honest conversations with their future spouses (and themselves) and speaking with lawyers and accountants who can advise them on divorce, trusts and estates and tax issues, they will be able to deal with many issues that if left unaddressed, could have long lasting negative repercussions for them and their children.