The Court rendered a monumental ruling for same-sex marriage on June 26, 2013 in the case of United States v. Windsor, 133 S.Ct. 2675 (2013). In this case, the Court ruled that section 3 of the defense of marriage act (“DOMA”) was unconstitutional. So what does all of this mean?
Prior to the ruling in Windsor, same-sex marriages were not given the same treatment as traditional marriages. In fact, same-sex marriage was not considered a “marriage” for federal benefits and tax purposes at all. This prevented couples in a same-sex marriage from filing federal taxes as a married couple and it also they could not provide federal benefits for one another.
After Windsor, treatment of same-sex couples changed dramatically. In effect, the ruling mandated that same-sex couples could file taxes jointly as a married couple. A person in a same sex marriage could also provide benefits to his/her spouse. The ruling mandated that same-sex marriages recognized in Massachusetts also be recognized for federal purposes.
However, the ruling in Windsor fell short in one aspect. In section two of the DOMA, other states may refuse to recognize same-sex marriages from other states, and even after Windsor that remains in tact. For traditional marriages, states recognize marriages from other states. Even post-Windsor, states can refuse to recognize a same-sex marriage from another state. The effect? If you live now in a state that recognizes your marriage and move to a state that does not, your marital status may go unrecognized.
What makes a same-sex divorce different?
Now that same-sex marriage is recognized, separation of a same-sex couple is now a legal proceeding. Same-sex married couples go through the same riggers as traditional couples when they separate. The issues are very similar to that in a traditional marriage, of course, but the issues may actually be more complicated during a same-sex divorce.
- Recognition of your marriage: Because same-sex marriage has only been recognized for several years now, the length of the marriage for a same-sex couple may not be reflective of the total time that a couple has been in a relationship. This is by no fault of either party. It is simply due to the legislation. It opens the door to arguments in a divorce proceeding that a spouse may not be entitled to a particular asset, or an equal share of a particular asset, because she or he did not contribute to the procurement of the asset and the couple was not married at the time the asset was purchased.
- Alimony: Because the length of the marriage may be affected by the legal recognition of same-sex marriage, alimony can also be affected. Though the Court looks to many factors in it’s decision, the length of the marriage is a significant factor in a Court’s decision whether to award alimony.
For tax purposes, alimony is reported as income to the receiving spouse and deduction to the paying spouse. Post-Windsor, this is now the case for same-sex marriages. This may NOT be the case on your state tax return if your states does not recognize, or if you then move to a state that does not recognize, same-sex marriages.
- Property Division: Similar to the reasons for alimony, the length of the marriage can become an issue in property division as well. If the parties are dividing an asset that existed prior to the actual marriage of a same-sex couple, the question will rise as to whether that asset should be included in the division – completely or in part. For example, if a same-sex couple was together for several years before attaining the right to marry, the portion of the retirement account that was built prior to the actual date of marriage could be arguably indivisible as a marital asset.
On the positive side, post-Windsor, same-sex couples have the same tax benefits for capital gains issues and for transfer of retirement assets (without early withdrawal interest and/or penalty) upon divorce as traditional marriages.
Looking for more information regarding any family law related issues on a same-sex marriage? Contact me and we will sit down and work on your questions and solutions together.