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"The present law and procedure actively prejudices people living in same-sex relationships. Reform is necessary if a significant proportion of our community is to be equal at law to married couples or at least to have humane amendments to the law and procedure applicable to them upon their separation."
(Submission of the Maintenance and Property Committee, Family Law Section of the Law Institute of Victoria on Division of Property upon Separation of Same Sex Couples.)
Please read disclaimer
|See also:||[Owning Property] [Divorce, Separation]|
Some countries now fully recognise same-sex marriage and some States within the US similarly fully recognise same-sex marriage (perhaps now all States and Territories will in the light of the 26 June 2015 Supreme Court decision in Obergefell v. Hodges - see: LAWS). Many very significant and positive changes to the law have been made in various countries, virtually putting same-sex couples on the same footing as opposite-sex couples, however many jurisdictions around the world still have laws that actively prejudice people living in same-sex relationships.
Opposite-sex "civil marriage" brings hundreds of legal rights and responsibilities and whilst some limited protections can be put in place for same-sex partners, there remain economic advantages for opposite-sex couples that are practically impossible to match.
Some of the main economic advantages enjoyed by opposite-sex couples are:
Employee benefits: pre-tax spousal benefits for couples and families. Although in the US some 3,000 odd employers offer benefits like health insurance to same-sex partners, those benefits are taxed.
Estate taxes: Most countries allow a benefit to flow to a surviving spouse tax-free, but conversely some countries (eg some states in the US) impose a gift tax on an estate benefit to a surviving same-sex partner.
Income Tax: Opposite-sex couples may pay more or less tax depending on their situation, however it is probably fair to observe that income tax laws favour opposite-sex couples over same-sex couples;
Social Security Benefits: Same-sex couples are often not eligible for government benefits such as medicare and social security benefits. Where a same-sex couple have young children, if the non-biological partner dies the children may be ineligible for benefits, whilst the children of opposite-sex couples are most often eligible for benefits if a parent dies.
Other legal, economic and practical protections that married couples enjoy are:
Increasingly legislation is being passed that extends a number of the benefits enjoyed by opposite-sex marriages to same-sex couples. However, in some jurisdictions it is necessary to register the "domestic partnership" and often the partnership must endure for a minimum period before the legislation comes into play.
Where there is no registration system proof of the existence of a "domestic partnership" maybe yet another hurdle same-sex couples have to negotiate. A statutory declaration may go some way toward proof of the existence of a "domestic partnership" and establish the date at which the domestic partnership commenced.
In many countries there are remedies recognised by the common law that address some of these problem areas. Such remedies are usually confined to and require evidence of actual financial contributions to the acquisition or improvement of real property (real estate) and personal property of significant value. The law usually invokes the concept of a "resulting" or "constructive" trust to recognise the "share" or "interest" of a partner who may otherwise suffer severe injustice in economic terms.
A significant non-financial contribution or the providing of other support over a number of years is most often ignored and the cost in financial and emotional terms of enforcing one's rights at common law is usually very high.
See: Divorce, Separation.
So, to maximise protection, same-sex couples should (even where there is recognising legislation) still consider:-
putting in place a suite of documents -
starting joint accounts
There may also be certain advantages in having joint bank or credit card accounts, however remember that you both have equal access and equal responsibility (liability) for such joint accounts. And see "survivorship" next paragraph.
acquiring or transferring property into joint names
Holding joint bank or credit card accounts or other personal property in joint names or real estate in joint names ("joint proprietorship" as distinct from a "tenancy-in-common") usually means that if one or other of you were to die, the fact of death effectively gives rise to a transfer to the survivor of the accounts or personal property or the right to be registered as the sole proprietor of the real estate. The provisions in the deceased person's Will have no effect on this "survivorship" right.
See Owning Property
Remember, it is not necessarily a matter of not "trusting" your partner but of protecting your partner from difficult, if not plain antagonistic family members, who often make life a living hell for one partner when the other partner is incapacitated or dies. There is of course the need to protect yourself in the event of a separation. Talk to your partner.
If you are considering a same-sex partnership or domestic relationship, you may be able to better understand each other's needs and aspirations by talking through the desirability of putting in place the various documents referred to above.
You should certainly discuss matters in some detail as soon as you agree to co-habit or intermingle your finances or jointly acquire property. Where one partner is substantially financially "better off" than the other it may be that a formula can be put in place whereby, over time, the less well-off partner effectively acquires an interest in the home and property you both mutually enjoy.
In some jurisdictions, the transfer of real estate from one same-sex partner to both partners jointly (or vice versa), may attract government "stamp duty" or transfer charges. De facto heterosexual partners and married persons usually enjoy an exemption from such imposts.
Be aware that discussion of these matters often bring questions of "trust" to the surface.
As already suggested above, it is not so much a matter of trust but rather of "protection" for both of you. If one or other of you were to be seriously incapacitated or even die, then that person's family members may be able to intrude into your lives and make it very difficult for the survivor at a difficult and emotional time.
In the event of a partner's death and without appropriate protection, the deceased partner's family may even be able to take over the home and exclude the surviving partner even after many years living together.
These documents may be separate or combined and are formal agreements between you both to regulate day-to-day arrangements and other matters, to record respective interests including contributions and apportionment and to define certain arrangements or requirements should a variety of circumstances arise.
The actual contents may vary widely from very basic provisions concerning some property or a financial arrangement, to extensive and complex arrangements seeking to regulate the relationship in considerable detail.
In some jurisdictions, the Court may require strict formalites to be observed if a binding financial agreement is to be effective. See for example: LAWS - AUSTRALIA - FEDERAL - PROPERTY.
Your friendly lawyer should be able to draw your attention to various considerations.
A questionnaire addressing many of the considerations that may be taken into account in the preparation of such agreements may be found here . This document may aid you in preparing to discuss such an agreement with your partner and your lawyer.
The US website Rocket Lawyer offers a free online partnership agreement however, depending on your particular circumstances (and especially if you already have or plan to have children) you should consult a lawyer to ensure you have covered all the bases (many of which are referred to in the above-mentioned checklist). Be warned, do-it-yourself documents can be a recipe for disaster.
The death of a loved partner is traumatic enough without the survivor having added stress of the deceased partner's wishes not being legally recognised.
For example, without a valid Will, if the home is in the name of one partner only or where you are registered as tenants-in-common, the interest of the deceased partner may pass to a relative of that partner according to a pre-determined scheme for inheritance.
The law has changed in many jurisdictions and recognition of same-sex partners for the purpose of inheritance is now more commonly recognised.
These documents may be drawn up to give the power to your partner (or your partner jointly with someone else, or another person of your choosing), to act as if they were you in various circumstances.
A General Power of Attorney is usually a standard form document that only operates in respect of property or financial matters and is only effective whilst your are legally "competent". The document may be limited or have certain conditions specified.
An Enduring Power of Attorney also only operates in respect of property or financial matters but is effective even though you may be legally "incompetent". The document may be limited or have certain conditions specified and it ceases to have effect at your death.
This document enables the person/s appointed to make important decisions concerning your health care in consultation with your medical advisors. The document may be limited or have certain conditions specified, especially concerning life support measures to be taken.
This document enables the person/s appointed to make important decisions concerning your ongoing day-to-day care and living arrangements in circumstances where you are unable to do so.
The above documents may be known by different names in different jurisdictions, e.g. "Durable Powers of Attorney", "Health Care Proxies" and "Living Wills".
In some jurisdictions it may be necessary for a person to execute a document that appoints someone specific to make decisions about the disposition of his or her remains after death. Absent such a document, in the event of death, it may be that only a spouse, an adult child, parent or an adult sibling can make funeral arrangements and decisions about a person's remains. A specific provision in your Will is usually effective to set out your wishes in this regard.
In the absence of a statutory "domestic partners" registration scheme, a Statutory Declaration may go some way in proving that a same-sex relationship or domestic partnership is or has been in existence.
The law in a particular jurisdiction may require such a statutory declaration to comply with a certain, laid-down form.
Such a statutory declaration made by both partners at the time of commencing the relationship will at least provide some admissable proof of your relationship.
See: Declared Relationships Statutory Declaration for an Australian example.
You should have all these documents prepared by your lawyer, as certain formalities must be observed if the documents are to be legally effective and to avoid inconsistencies between these and other documents..
As a number of these arrangements are essentially based on "contract law", it is important to keep good records, especially with regard to property that you and your partner either acquire in your own names or jointly.
The Partnership, Living, Co-ownership or Cohabitation Agreement/s may include terms as to retention of property acquired in your name alone and jointly acquired property.
If you already own or are planning to purchase a home or any real estate registered in your name or jointly with your partner, you should maintain detailed records of your respective contributions to the acquisition, any loans entered into, and renovation or maintenance and repair expenses relating to the property.
It may even be very useful to maintain a chronological (in date order) narrative of the history of your partnership, noting all major events of significance.