Marriage Equality Legal Review

 May 20, 2014 marked a new day for same sex couples in Pennsylvania. Whitewood means that they have the same right to marry as opposite sex couples, thus the same legal opportunities and the same legal questions arising from marriage. Couples who legally married elsewhere have suddenly found their marriages are recognized in Pennsylvania. Other couples who were waiting to wed in Pennsylvania now have that opportunity. This article addresses some of the legal issues that they now need to consider.

 Prenuptial and Postnuptial Agreements

Title to Real Estate and Other Property

 Existing Cohabitation or Domestic

Partnership Agreements

 Wills and Estate Plans

 Powers of Attorney

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 Prenuptial and Postnuptial Agreements

 Marriage itself creates a set of legal rights.  Examples are the rights to inherit property and serve as executor, rights under retirement plans and rights to support, alimony and property division in divorce. Couples contemplating marriage that wish to avoid any or all of the automatic legal effects arising from the marriage enter into a prenuptial agreement. Same sex couples should now consider the advisability of entering into a prenuptial agreement before the marriage. This is especially true when one or both come to the marriage with significant wealth. Couples that were already married elsewhere may need to address these same concerns in a postnuptial agreement. Pennsylvania law imposes special strict requirements on a prenuptial or a postnuptial agreement in order for the agreement to be legally enforceable. It is important to meet all the requirements or the agreement may be worthless.  (See separate article about prenuptial agreements generally.)

 Title to Real Estate and Other Property

 Pennsylvania heterosexual married couples have been able to own their homes or other real estate in a form of joint ownership known as “tenancy by the entireties.”  This form of ownership has two significant legal consequences. First, when one of the spouses dies, title to the property passes to the surviving spouse automatically.

 Second, the entireties form of ownership provides asset protection. Generally, a creditor with a claim against only one of the spouses cannot enforce a judgment against entireties property as long as both spouses are alive and married to each other.  Until now, this protection was not available to same sex couples. They could own property as joint tenants with rights of survivorship - providing them with the same survivorship rights upon death as straight married couples. They could not, however, obtain the asset protection benefits of entireties ownership. That opportunity is now available to a same sex married couple. Whether the marital status has arisen from a new recognition of a valid existing marriage elsewhere or has been created by a new ceremonial marriage in Pennsylvania, the couple needs to consider whether a change in title to entireties property is appropriate for asset protection purposes.  It is not automatic upon marriage; a new deed must be prepared and recorded to have the protection of entireties ownership. 

 Property other than real estate may also be protected by the entireties designation. Bank accounts, securities and other assets may be exposed to the claims of future creditors.  Protection may be available by appropriately changing title to the assets. Care must be taken if there are existing creditors because such action could be a prohibited fraudulent conveyance.

 Existing Cohabitation or Domestic Partnership Agreements

 A same sex couple, married or not, may have entered into an agreement to try to contractually create legal relationships that were automatic for straight married couples. Now that an existing same sex marriage is recognized by Pennsylvania, it is important to have any existing agreement examined to determine what effect the marriage has on the agreement and what effect the agreement might have on rights that would otherwise exist as a result of the marriage. The rights of the spouses may now be uncertain or the legal effect may be contrary to what the parties intend. The existing agreement may need to be revoked or amended so the parties still have the desired result under the changed circumstances.

 Wills and Estate Plans

 All married persons, regardless of orientation, should have a will. It is the only way to assure that their assets get to the intended heirs. Married persons often assume that if they die without a will, the surviving spouse will receive everything. If they also have surviving children or parents, that assumption is wrong. A will allows a person to be certain that assets will end up where intended. If there are children, the will determines when the children receive inheritances and whether protected by a trust.    A will enables the selection of an executor and, if there are minor children, a guardian. A properly drafted will might reduce or eliminate Pennsylvania Inheritance Tax and Federal Estate Tax.

 Powers of Attorney

 Many people mistakenly believe that when one spouse becomes incapacitated, the other spouse may act for him or her. That is not true. Marriage does not by itself give one spouse the authority to act for the other but a power of attorney can do that. Without it, a guardianship proceeding in court may be required.  (See separate article about powers of attorney generally.)

 Why a Lawyer Is Important

 These are some of the legal issues that have historically been considered by straight couples that now must also be considered by same sex couples. Forms, advice and information are available on the Internet. However, the benefit of the knowledge, skill and judgment of an experienced legal professional in addressing the particular circumstances is missing on-line or in books.  What works for one person – or even for most people – is not necessarily right for everyone.  Documents that may be perfect in one situation may not work at all for another person.  Knowledge of the law and taxes may be crucial.  A lawyer can help a person to understand the issues, alternatives, advantages and disadvantages and prepare appropriate documents and implement a plan. 

 Summary

 Together with your accountant or financial advisor, a lawyer can help you review how marriage equality and marriage affect you and prepare appropriate documents to implement your wishes and address your concerns.

 Marc H. Jaffe, Esquire                   

LLM (Master of Laws in Taxation)                                                                         

© Copyright 2014

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Notice

 This article is for informational purposes only.  It should not be considered legal advice.