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Modern Love: Why gay and lesbian couples should consider prenuptial agreements

More states are allowing same-sex marriages, but most do not. As a result, there remain significant differences in the rights of gay and lesbian couples who enter into a marriage or a domestic partnership from those afforded to “traditional” marriages.

LGBT couples have options to protect assets when considering either a domestic partnership or marriage, and prenuptial agreements are more common these days for both straight and same-sex couples. This is because people are waiting longer to form a serious relationship, thus each has accumulated significant assets.

Working with a mediator is a great step in carefully planning the future ahead as a mediator can provide both parties a means to have practical conversations to discuss issues surrounding legal, financial and relational aspects in associated with a prenuptial agreement.

A prenuptial agreement is a contract or commitment registration signed by a couple before their wedding, which details individual property rights and expectations. It also sets out the expectations each party has should the relationship fail or divorce ensues. A prenuptial agreement does not do away with child support obligations nor provide for custody of the future birth of children nor do anything that will promote a divorce, or legal separation.

A mediator provides an open environment, to discuss expectations, responsibilities and concerns. It is a way for couples to make fully informed decisions about each and every aspect of a prenuptial agreement.

Since legal rights are still so uncertain for same-sex couples, a mediator can help because he or she knows the legal system, and can help find a balance, never taking any one side, but allowing both people to make up their own minds. Also, mediation can help same-sex couples looking to have children together to create family agreements to define the terms of the family relationship. A mediator helps to formalize family agreements.

Winning and losing

Aside from signatures, all assets must be fully disclosed prior to signing a prenuptial agreement. Each person should have their own attorney review the agreement and each must fully disclose all assets prior to signing. Failure to do so can result in the agreement getting tossed out of court if the hidden assets are later discovered.

For example, did you hear the story about the lottery ticket and the opposite-sex couple who divorced after the wife had won the lotto? She wanting to keep all of the prize money for herself did not disclose her winnings to her husband, and then divorced him. He later found out she had won, took her to court and the judge awarded all the winnings to him. Her move led to heartache in more ways than one.

Benefits for same-sex couples

If you are in a same-sex relationship, you can benefit from signing a prenuptial agreement because typically gay and lesbian couples acquire assets at a greater rate than heterosexual couples. So if you do break up with your significant other, there’s more to contest.

Road blocks

However, breaking up in a gay or lesbian partnership can become very complicated in many states that do not recognize registered domestic partnerships. While Texas would most likely recognize a well-written California prenuptial agreement for a heterosexual divorce, the state might not do the same for a divorcing gay or lesbian couple.

Federal tax issues can be problematic. Under federal law, alimony cannot be taxable to the recipient and deductible by the payor. Under the Protection of Marriage Act, state law will allow straight couples to take advantage of the taxability of period support payments.

Each party must have an independent lawyer review the document. There is a 14-day “cooling off” period between the time the document is prepared and signed by the party. There will be no more surprises on the way to the wedding. Each must have an opportunity to think about what they are doing before the ceremony takes place.

The document will remain in full force and effect until the parties mutually amend it or terminate it in another contract.

Richard Gordon is the principal mediator at A Fair Way Mediation Center of San Diego. Contact Gordon via Facebook or Twitter. Also, A Fair Way Mediation Center will look to our readers to propose next month’s topic and every month thereafter.