I hope you had a nice weekend.
As promised, I want to provide a cheat sheet that summarizes the legal and financial rights for newly married same-sex couples.
If you saw my frightening statistics from last week, you read that 83% of LGBTQ investors surveyed didn’t fully understand how federal and state laws apply. That number says a lot about the amorphous nature of the current marriage laws and the apathy from those to whom the laws now apply.
For those of you looking to learn more, here are five fundamental rules you need to know:
- Your marriage will be recognized by the federal government, if you get married in a state that recognizes same-sex marriage: You don’t need to live in a state that recognizes same-sex marriage in order to be legally married in the eyes of the federal government. Most government agencies, including the IRS, recognize the marriage based on the “place of celebration,” meaning the federal government recognizes the legality of your marriage based on where you were married. So if you were married in Illnois, but live in Tennessee, your marriage is still valid with respect to federal laws. However, the recognition only applies to legal marriages – not civil unions or domestic partnerships.
- There are still some federal agencies that recognize your marriage based on place of residence: While the majority of government agencies recognize the marriage based on place of celebration, some agencies still only recognize the marriage based on the place of residence, including the Department of Labor, Department of Veteran Affairs, and the Social Security Administration. Lambda Legal recently sued the VA in order to enforce VA spousal benefits but a decision on that will likely take a while. In the meantime, those that live in states that don’t recognize same-sex marriages need to be aware of these gaps in the federal marriage laws.
- Your state does not have to recognize your marriage: While you may get marriage rights from the federal government, your state doesn’t have to recognize your marriage…not yet anyway. If you happen to live in one of the 31 states that do not recognize same-sex marriages, you will have to be extra cognizant of your state rights when it comes to things like estate tax, insurance benefits, and filing your taxes.
- Once you are married, you have the same rights and obligations of any other married couple: The great thing about getting married is that you have access to over 1000 new legal and financial rights. You can inherit your spouse’s assets estate-tax free, avoid tax on health benefits, and file joint tax returns. However, keep in mind that with the rights, you also have some obligations. For example, with things like filing joint tax returns, once you marry you can only file either married filing jointly or married filing separately. No more single or head of household (unless you’ve been separated the last six-months of the year).
- You need to update important documents: Once you get married, you need to update certain documents in order to have access to the benefits in which you’re entitled. You should contact your human resource department to update your insurance and retirement benefits, contact the social security administration if you want to change your name, and update your will and trust documents to reflect your current marital status. For other things to consider updating, check out this post.
The financial and legal landscape is still pretty confusion for legally married GLBTQ couples. But that only means you need to be extra diligent in knowing your rights. I’ll make sure to update the things you should know as the laws continue to change.