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Marriage and

Marriage and


All set to go to a California city hall? Think about the financial costs first.

At a recent financial planning presentation we gave in Washington, D.C., a man announced that he and his partner were flying to California to get married, joining the thousands who've done the same since June 17. The couple already had a civil union in Vermont, a registered domestic partnership in the District of Columbia, and a Canadian marriage license. Why had they collected so many certificates? Symbolism, he said.

While it may be important to these fellows and many other same-sex couples to memorialize their relationship in myriad ways, the resulting financial implications can be complicated. And with marriage in California open to gay couples nationwide, state and federal laws concerning same-sex relationships are being tested like never before.

If you're thinking of tying the knot, here are some things you should consider:

For starters, it's important to remember that the Defense of Marriage Act prevents same-sex couples from receiving the federal benefits currently available to heterosexual married couples. So you can forget about getting any federal breaks come tax time next year. And you shouldn't expect access to your partner's Social Security benefits should he or she die, although the Social Security Administration did advise its employees in a June 6 memo that instructions were being prepared concerning the impact of California marriage equality on agency guidelines. It's unclear what those instructions will be, but the memo indicates the feds are taking notice of the situation.

Another issue: If you "gift" your spouse more than $12,000 a year -- or leave an estate to him or her that's worth more than $2 million -- hefty federal tax penalties (upward of 45%) will be imposed.

DOMA also means that states are not required to recognize marriage (or marriage-like partnerships) from other states. What's more, according to Lambda Legal, some states actually prohibit their residents from entering into any marriage that would be illegal at home. If you get hitched in California and return to Wisconsin, for example, you could be fined $10,000 or imprisoned for nine months (or both). Though such laws aren't typically enforced, Lambda Legal's senior counsel David S. Buckel says a rogue prosecutor with an agenda could dust one of them off and make trouble for you.

On the flip side, if you live in California (or in a state that recognizes same-sex marriages performed in California, such as New York) and are receiving nonfederal public assistance, marrying may jeopardize your benefits, since your new spouse's income and assets can be factored into your eligibility.

And then there's the whole issue of divorce--a costly endeavor, emotionally and financially. Attorney fees are one thing, but in a community-property state like California, assets acquired during a marriage are split evenly between spouses unless they have a prenuptial agreement stating otherwise. So, for example, if you are the wealthier spouse and you buy both your main home and your vacation home, your husband or wife can walk away from the marriage with one of them without having contributed anything to the purchase of the property. The only consolation is that such a split would trigger federal gift taxes for the spouse on the receiving end, thanks to DOMA.

Finally, California requires a certain length of residency before you can file for divorce: One half of a divorcing couple must live in the state for six months prior to filing as well as reside in the county where the filing takes place for three months beforehand. So if you wake up the morning after the big day with regrets, be prepared to live with the consequences before you can be freed. And if you're an out-of-state couple married in California, one of you will have to move to the Golden State if you want to get divorced.

So before you say "I do," consider the consequences to your finances. As historic and enticing as marriage is, the cost may be too high.

30 Years of Out100Out / Advocate Magazine - Jonathan Groff & Wayne Brady

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