Same Sex Marriage Divorce Limbo: Do the Benefits Outweigh the Risks?

July 09, 2013 | Blog, Divorce

Icon for author Brian Vertz Brian Vertz

The final days of Pride Month 2013 ushered in a world of new opportunities for same-sex couples. The ground-breaking decisions of the U.S. Supreme Court in Windsor and Hollingsworth, respectively, struck down Section 1 of the Defense of Marriage Act (“DOMA”) and green-lit same-sex marriage laws in California. Since then, financial planners and tax gurus have been urging same-sex couples to seriously consider marriage, in order to take advantage of these new opportunities. Yet, most have not considered the risks that even legally-married same-sex couples face when they break up. Many are stuck in a limbo, in which they cannot get legally divorced and might not be able to do so for a long time. If you live in a state that does not recognize same-sex marriage, is it worth the risk to get married in a state or country that does?

First, a little background. In United States v. Windsor, the U.S. Supreme Court (5-4) held that the federal Defense of Marriage Act (DOMA) unconstitutionally conflicts with New York laws that define marriage in that state. In other words, the federal DOMA discriminates against the same-sex couples that New York’s marriage law seeks to protect. Since the regulation of marriage has always been within the province of states, section 1 of DOMA was struck down.

This decision does not prevent states, like Pennsylvania, from enacting marriage laws that would ban same-sex marriages or define marriage in the same way that Section 1 of the federal DOMA did. Section 2 of the federal DOMA law says that states don’t have to recognize same-sex marriages granted in other states and countries. The Windsor Court did not consider that issue, and Section 2 of the federal DOMA law was not struck down.

Pennsylvania is one of many states that has its own “mini-DOMA” and does not recognize same-sex marriages that are performed outside its borders. 23 Pa.C.S. § 1704; DeSanto v. Barnsley, 476 A.2d 952 (Pa. Super.1984). The Windsor decision prohibits the federal government from usurping the states’ power to define marriage within its borders. So, the states are still free to ban same-sex marriage unless those mini-DOMA laws violate the states’ constitutions. Same-sex couples living here still face the challenge of living a life in which they are legally married in New York but not married in Pennsylvania. They are in “legal limbo.” Can they file joint tax returns? We don’t know yet.

Since Pennsylvania does not recognize same-sex marriage, Pennsylvania will not grant a same-sex divorce. Furthermore, same-sex couples cannot get divorced in the place where they were married, unless they meet the residency requirements of that state or country. Most places require a 6 month residency before initiating a divorce action. Some places that grant same-sex marriage have contemplated a special law to grant divorces to same-sex couples who can’t get divorced at home. Yet, such “tourist divorces” might be defective or limited if both of the same-sex spouses do not participate and give their consent.

If both spouses do not consent, these “tourist divorces” will not have the power to divide property or award alimony. There is a long history of legal precedent. In the days before no-fault divorce became prevalent in the 1970’s, some disgruntled spouses traveled to Nevada or Mexico to get a divorce. The U.S. Supreme Court held that “tourist divorces” were good enough to dissolve the marriage, but not to divide property or award alimony. Those divorces involved opposite-sex couples, but there is no reason to think that the current circumstances would change the result.

And so far, no “tourist divorce” laws have been passed. Same-sex couples who are legally married elsewhere but living in Pennsylvania cannot get legally divorced, here or anywhere, until Pennsylvania revokes its “mini-DOMA” and enacts legislation to issue same-sex marriages and divorces.

An excellent article was published by the New York law firm of Katten Muchin Rosenman LLP, extolling the benefits of same-sex marriage. Just filing a joint tax return can save hundreds or thousands of dollars, not to mention the availability of Social Security benefits and other good reasons for getting hitched. Yet, couples who do not live in New York should be forewarned: Consider the risk of legal limbo if it doesn’t work out. Some marriages last a lifetime, but many do not.  For those living in a state like Pennsylvania that does not yet recognize same-sex marriage, even marriages legally recognized elsewhere and by the federal government, it might be impossible to restore order to the lives of those whose marriages do not last a lifetime.

The legal limbo of same-sex marriage in Pennsylvania affects more than just same-sex couples and their children. Employers, insurance companies, hospitals and many other institutions are also affected.

Employers, particularly national and multinational companies, need a uniform definition of “spouse.” Many of the benefits they offer to employees are regulated by federal law (ERISA, COBRA, and the Internal Revenue Code, for example). Prior to Windsor, employers could rely on the definition provided by DOMA, which defined “marriage” as a union of one man and one woman for the purpose of federal law and federal benefits. When that definition was struck down in Windsor, employers were left with a crazy quilt of state laws, creating uncertainty and inconsistency. Because some states recognize same-sex marriages and others do not, employers who cross state lines have no reliable, consistent definition of a “spouse” when administering benefits like pension survivor annuities, dependent health insurance coverage, and FMLA medical leave. ERISA requires, for instance, that an employer must pay a pension to a retiring employee in the form of a joint and survivor annuity if the employee is married and the spouse has not waived the benefit. What about pensions that went into pay status before Windsor? Can an employee’s spouse sue the pension to pay a survivor benefit after the employee has already retired under a single life pension annuity without reduction to pay for the survivor benefit? The survivor annuity will not have been funded by the employer because the employer did not previously recognize the same-sex marriage under DOMA. The retroactive effect of Windsor, if any, has not been fully considered yet.

Retroactivity is not the only problem Windsor has created. If an employee resides and works in a state that does not recognize same-sex marriage, and her spouse resides in a state that does, must the employer offer dependent health insurance coverage? Which state’s marriage law should the employer look to when deciding whether its employee is married? And if federal agencies adopt policies that extend federal benefits to same-sex couples living in states that do not recognize same-sex marriages, must the private sector do the same?

These dilemmas may or may not be resolved by future court decisions. In the meantime, the legal limbo creates uncertainty, and therefore risk and expense, for same-sex couples, their children and families, their employers, and others who do business with them.

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