Divorce is never easy for any couple. Even individuals who are the initiators of the divorce action rarely think that divorce is a happy event. At the least divorce means the ending of a union that once started with promise, the end of a coupling that began with marriage. For same-sex couples divorce brings a host of problems, not of their making, impediments that impact on the nature of settlement and on each individual’s ability to move forward, financially, as well as emotionally.
This article is intended to highlight the legal complexities of same-sex divorce, which is currently a focus of the United States Supreme Court’s deliberations on the legality of the 1996 Defense of Marriage Act. In its simplest description, DOMA defines marriage as a union between one man and one woman. Further, DOMA allows each state to legalize same-sex marriages and, in fact, to determine independently whether or not the state will recognize same-sex marriages from other states where they were legalized. Still, in keeping with the federal definition of marriage, the federal government does not allow states in which same-sex marriages have been legalized, to grant same-sex couples the federal rights accorded to heterosexual married couples within its state. In effect there are two classes of married couples, with same-sex married couples being denied all the federal entitlements and rights accorded to heterosexual couples. For divorcing couples the landscape is fraught with pitfalls, the majority of which are financially detrimental to the fashioning of an equitable settlement.
Considering some of the distinctions between divorcing same-sex and heterosexual couples, the following list includes some glaring differences as they relate to federal law. Questions abound and answers are few.
Alimony, as a taxable deduction to the paying spouse and income to the receiving spouse is not recognized. So what does this mean for same-sex couples? If support is judicially ordered or negotiated by the parties, how then is the exchange of moneys to be categorized? Is it income to the recipient even if the paying spouse does not receive a federal deduction for the payment? Is it a gift, subject to gift tax limitations? Should it be defined as an extended property settlement? And, if so, under what justification?
No access to a former spouse’s social security benefits after ten years of marriage, as is accorded to heterosexual couples
No benefits for dependent children
No access, as a former spouse, to health care coverage (nor, for that matter, during the marriage)
Nontaxable transfers of property between divorcing spouses are not available in same-sex divorces, thereby raising questions related to capital gains taxes and gift taxes resulting from transfers effected to achieve an equitable division of property.
Pensions and other qualified retirement plans cannot be transferred by Qualified Domestic Relations Orders from one spouse to another as can be ordered between heterosexual couples.
Divorcing couples cannot name each other as beneficiary of federal pensions as part of the parties’ efforts to achieve a settlement.
And the list goes on. Indeed although this article has only addressed issues related to divorcing same-sex couples, it is important to note that same-sex couples also live with federal limitations during their marriage. Consider that they are ineligible to file joint federal tax returns; they do not have access to spousal rights granted federal employees, including health insurance and retirement entitlements; social security benefits are denied to all spouses, regardless of their employment; and then, too, there are estate tax exclusions not available to same-sex couples. And, this constitutes only a small sampling of the inequities between married same-sex and heterosexual couples.
The repeal of DOMA would obviously have a major impact on the rights and entitlements of married and divorcing same-sex couples. While divorce is never easy, the landscape would be leveled with all divorcing couples being treated as one class, conforming to the same laws.
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