So You Can Get Married--But Does It Make Economic Sense?

Married couples in California might find their legal status challenged after tomorrow's election. Even if Proposition 8, the ballot initiative that seeks to revoke the existing right of gay and lesbian families to enter in marriage, is revoked, the State Attorney's office believes that marriages that have been granted prior to the vote will still be in force; that would create a two-tiered system of marriage in which some gays and lesbians were married while others were locked out of that legal relationship.

If Proposition 8 fails, and marriage equality in California is preserved, that will still mean that gay and lesbian families are faced with a bewildering legal landscape in which many states would not recognize their marriage; moreover, state-level marriage does not carry any federal recognition: the 1996 Defense of Marriage Act (DOMA) forbids the federal government, and any federal department, from recognizing marriages between same-gender couples. So complete is that refusal to recognize gay and lesbian families that eh U.S. Census Bureau will not even count gay and lesbian marrieds in 2010.

With marriage equality under siege in one the three states where it is legal, further challenges possible in the future, and an array of levels of recognition for gay and lesbian families that ranges from zero to domestic partnerships to civil unions to full-fledged marriage at the state level, how can families headed by same-gender couples best protect themselves legally and financially?

The New York Times looked at the question with a pre-Election Day article on Nov. 3.

The best approach: those who are married ought to enjoy their status, but not assume that it protects them in any and all instances. Because of the uncertainty of marriage equality's future, and the vast gaps in recognition throughout most of the nation, gay married couples need to approach their rights and protections as thought hey were not married at all, and build a legal portfolio that includes durable power of attorney, a living will, life insurance benefits for one's spouse, and-for families with children-second-parent adoption wherever possible.

That's not to say that marriage and civil unions do not convey a degree of protection: they do, especially for families with children. But it's important for gay and lesbian families to sit down with a financial planner and figure out where gaps in their legal status exist, and seek to fill in those gaps. Even a family vacation can pose legal consequences to gay and lesbian families if the itinerary includes states without marriage or civil unions provisions.

The article quoted Lambda Legal senior counsel David Buckel, who also serves as the group's marriage project director.

Said Buckel, "It really depends on where you are standing."

Added Buckel, "More than 40 states have passed statutes to confirm that same-sex couples are not allowed to marry."

It's also important to understand how the lack of federal recognition affects gay and lesbian families: the New York Times article noted that because federal income taxes do not recognize same-sex marriages or civil unions, joint checking accounts and other avenues through which one spouse might contribute large sums of money and the other take out large sums might lead to a federal tax burden on the family.

Internationally, the question of marriage might also have an impact on gay and lesbian families: the article said that adopting a child from overseas could be made impossible by the act of a same-sex couple marrying: once a foreign adoption agency knows a prospective parent is gay, it might not allow the adoption to take place, the article said.

The article provided a list of essential documents that gay families--married or unmarried--need to have on hand, including health care proxies or medical power of attorney (allowing a spouse to make medical decisions); a living will (in which a person specifies which procedures he or she will grant permission for and which he or she specifically forbids); durable power of attorney (which grants a spouse authority over financial aspects of a shared household); a will that names one's spouse as one's beneficiary and, when children as involved, names the spouse as the legal guardian; a revocable living trust, which places a person's wealth into a trust dedicated to a spouse or child and is more enforceable than a will; life insurance and disability insurance benefits; purchasing property together whenever possible to avoid gift taxes or other penalties for adding a name to a deed or registration; and some form of legal agreement regarding guardianship of children: second-parent adoption is best, but is not allowed in some states; a legal agreement is also a good idea for families living in states that do not allow second-parent adoptions, the article said.

The New York Times quoted financial planner Debra Neiman, of Arlington, Massachusetts (the first state to have granted gay and lesbian families marriage equality, in 2004).

Said Neiman, "People just assume they don't need to have legal documents drafted if they are in a civil union or a marriage, and that is an entirely wrong assumption."