Tuesday, September 26, 2006

Unsettled Law in Same Sex Marriage/Partnership Dissolutions

I have pasted below an article from the San Francisco Chronicle that presents the problems of unsettled areas of law. As discussed in my post on Uncertain Results Under Law: A Reason for Mediation, cases involving such unsettled areas of law can be mediated with much greater confidence in the results. The risks involved in creating new law, particularly when the new law will directly affect your custody rights and important property rights, might be too high:

THE BATTLE OVER SAME-SEX MARRIAGE Divorcing gay couples create new legal issues Alimony, property questions have even lawyers confused - Wyatt Buchanan, Chronicle Staff Writer Monday, September 25, 2006.

Gay and lesbian couples in the United States cannot marry anywhere except Massachusetts, but many states that legally recognize same-sex couples now send them to divorce court if they break up. Same-sex couples who break up are finding themselves in a legal morass. State divorce laws conflict with federal tax laws; differences among states' laws can jeopardize child-custody agreements if one or both partners move; and some attorneys are shying away from same-sex divorces for fear of their own liability. Attorneys "are worried that they don't know the answers to a lot of questions, and people are making decisions on what their lawyer tells them to do. There can be liability on the lawyers' side if they make their best intelligent guess that happens to be wrong," said Deborah Wald, a San Francisco family law attorney who works with same-sex couples.

In California, since January 2000, nearly 39,000 couples have registered with the secretary of state as domestic partnerships, a designation open to gay and lesbian couples and some seniors. For the first few years, domestic partners who wanted to break up filed a simple notice of termination with the secretary of state. But that changed in January 2005 when AB205, the Registered Domestic Partners Rights and Responsibilities Act, took effect. Most partnerships now have to go through divorce proceedings, just like married couples, with a few exceptions. Many of the problems arise when ex-partners calculate their federal income taxes.

For example, a California judge might order one to regularly pay the other a certain amount of money, like alimony. But, because the federal government does not recognize same-sex couples, the Internal Revenue Code treats that income as a gift and taxes it at a higher level than alimony. And, although alimony payments are deductible for straight ex-spouses, someone who has left a same-sex union can't take that deduction. Similarly unsettled issues arise with pensions, retirement accounts and other property.

Attorneys and accountants have yet to see what will happen when a couple returns to California to end a partnership and the state court divides property they owned in another state, for instance. "Courts are going to be facing cases involving same-sex relationships that they haven't faced before," said Ellen Kahn, director of the Family Project for the Human Rights Campaign, a national gay and lesbian rights organization. The legal questions are new because there was never such disconnect between states and the federal marriage laws until Vermont instituted civil unions in 2000, and only 113 of those unions have been dissolved.

There is no record of how many partnerships have been registered and dissolved in each California county, though San Francisco has seen 28 since January 2005. But the separation rate seems to be much lower than the nation's divorce rate, which is about 50 percent. California courts have recognized a Canadian marriage and a Vermont union in order to dissolve them. Those dissolutions likely would hold up in a Vermont courtroom, just as an out-of-state divorce decree would, said William Dalton, Vermont's deputy secretary of state. But that remains untested. "This is truly a brave new world for us," Dalton said. "Anyone who steps out first is going to create as many questions as answers."

The most emotional issues surround child custody. As long as a couple stays in California after splitting up -- and the partners did a second-parent adoption or the child was brought into the relationship after the partnership formed -- no unique issues affect them. But many states do not recognize two mothers or two fathers as the parents of a child.

One custody case that many legal observers believe the U.S. Supreme Court will have to resolve involves a lesbian couple who entered into a Vermont civil union and had a child. When they broke up, the biological mother moved to Virginia with the child and renounced homosexuality. A Vermont court has ruled that the non-biological mother has custody rights, while a Virginia court has ruled she does not.

Financial planners and attorneys suggest that couples registering as partners study the option carefully. Domestic partners gain some benefits that used to be available only to married partners, such as the ability to take family leave, sue for wrongful death and collect pension death benefits. "The question is not whether it's good for the couple, but whether it's good for each individual," said Frederick Hertz, an Oakland attorney and co-author of "A Legal Guide for Lesbian and Gay Couples." "The overwhelming majority of straight couples marry without giving much attention to this ... because most married couples have a general sense of how the rules work," Hertz said. "I find the knowledge base in the gay community much, much less." E-mail Wyatt Buchanan at wbuchanan@sfchronicle.com. Page B - 1.

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