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Before Marriage, Same Sex Couples Need Prenups

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This is not an article about the merits, legal or otherwise, of the U.S. Supreme Court's recent two rulings on same-sex marriage. Very shortly, there will be 100,000 articles on that subject from all viewpoints and angles, so there is little need for me to share my 2 cents about that issue. Instead, this article aims to offer some practical advice and cautions.

This Great Nation is apparently about to go through a wave of marriages at numbers unseen since the boys (and even a few girls) came home from World War II. That's okay, as the advent of laser printers and computerization means that the city and court clerks can churn out as many marriage licenses as needed to keep the lines relatively short, and the amazingly large wedding industry can use a booster shot after the last recession sent many new couples to the Elvis-attended drive-through chapels in Vegas.

What makes this wave of marriages quite different, however, in addition to the fact that it is boy-boy and girl-girl, is that these marriages will be predominantly of couples who are already established in life and carry with them substantial financial detritus, good and bad.

Think of it this way: When our troops came home after WWII, most of them returned with all sorts of souvenirs -- my grandfather brought home an Italian pistol and a Nazi party flag as was very common -- but little else, and certainly nothing in the way of much money. By and large, our returning troops were then predominantly young kids, mostly under 25, and came back with no money, no jobs, no house, no stocks, no bonds, and nothing really more than their souvenirs and the pride of being part of the greatest and most successful military ever assembled in the history of the world. Fortunately, they also had no debts, no liabilities, and before them was the upcoming Great American Economy of the 1950s and 1960s.

That is very different from what today's same-sex couples contemplating marriage face.  Most of them have been couples for years, and have, individually, a great deal of financial assets, established careers, and equity in their homes. Some also have lingering debts and liabilities. While the urge to "rush to marriage" will probably be inescapable, perhaps some caution is warranted to do a little planning first. What I am talking about is a pre-nuptial agreement.

It is almost too obvious to point out that same-sex marriages are not immune to divorce. In fact, a joke has gone around that same-sex marriage should be approved because same-sex couples have the very same right to be as miserable in a divorce as anybody else.

Moreover, in community property states, those assets of "the community", being pretty much all the assets of a married couple other than what they had before they were married or what they inherited, are available to the creditors of either spouse. To look at it differently, after marriage, the assets of the couple become exposed to twice as many potential creditors.

This is all rather easily dealt with by the couple agreeing before the marriage (or even after the marriage by what is known as a post-nuptial agreement) that basically divides the property into the individual property of one or the other spouse, as well as delineates what will happen if the couple ultimately divorces.

But there is an even better reason why same-sex couples in particular should have a pre-nuptial agreement. Apparently, and I'll leave this to others to finally sort out, even after the U.S. Supreme Court held ruling, individual states cannot be forced to recognized same-sex marriages from other states. This creates the potential for a legal mess, not likely to be substantially sorted out for many years if not decades, where the respective rights of each partner fall into theoretical chaos if they, or just one of them, moves to a state that does not respect same-sex marriages entered into in another state.

The best way to deal with this is contractually by way of the pre-nuptial agreement. The parties can agree as to how things will be divided in a divorce, as well as keep their property and liabilities separate if community property laws are implicated.

Even beyond the pre-nuptial agreement, there is other planning that same-sex couples might consider before marriage, such as the formation of trusts or other legal structures that additionally have the effect of keeping their property separate and outside the marital realm. This type of planning must typically be done prior to marriage; it is not a proper office of asset protection planning to cheat the other spouse out of his or her rights to the marital property (my own personal opinion is that it is reprehensible to cheat a spouse out of existing rights).

The point is that while the urge may be for same-sex couples to marry immediately, having waited so long, perhaps that isn't the best idea and a short delay to get affairs in order before the marriage is probably the better course.

The good news is that in many states, and particularly those that are on the front line of this issue, the family law sections have been studying this issue and giving educational seminars to family law attorneys on how to deal with same-sex marriages, greatly helped by the fact that even before same-sex marriage was protected they were dealing with civil unions through contractual arrangements. While there may be some initial confusion as scholars sort through the ramifications of the U.S. Supreme Court's holdings, in very short time most family law attorneys will be able to draft and implement very solid pre-marital plans and prenuptial agreements, if they cannot do so already.

Sometimes couples balk at prenuptial agreements. I commonly tell them that marriage carries very serious obligations to each other, and that if they cannot agree now on how things should be divided later, then maybe they need to re-think that entire marriage thing completely. After some initial qualms, most couples that I talk with will go see a family law attorney and get a prenuptial in place. This result should not be any different for same-sex couples.

Indeed, my experience has been that couples who have prenuptial agreements tend to get along better, because they don't have the uncertainty of what might happen if there is a dissolution and so when times get rough they don't make the situation worse by trying to posture for a better deal.

So, before you rush to the courthouse to begin what you think will be a lifetime of bliss, have a good talk with your bride- or groom-to-be about getting a prenupt.

This article at http://onforb.es/19ziCy5 and http://goo.gl/WxKpY