Varying laws for same-sex divorce cause ex-couples financial pain

Due to the divided and varying federal and state laws regarding same-sex marriage and divorce, some couples are currently finding themselves in a much more complicated situation than even the most complex divorces of heterosexual marriages.

The 1996 Defense of Marriage Act is the federal rejection of an acknowledgement of all same-sex marriages in the United States and globally. It is also a declaration that Maryland -- as well as any state -- is not required to recognize same-sex marriage either. This contradicts a handful of state laws that already allow same-sex marriage, and further complicates the possible need for future same-sex divorce.

An example of financial grief due to this legal quandary occurs when a same-sex couple has had a prior civil union and are currently separated. Even if one person is ordered to pay spousal support, federal law prohibits the obligor from being able to deduct this from their own federal taxes. Federal laws deem that the obligor is not a "federally-recognized spouse." The same complication arises from any federally-governed financial arrangement, such as a 401k.

Other tax issues present a dilemma for the couples. It seems that even tax preparers in certain states are having a difficult time understanding and keeping-up with the changing laws for same-sex unions. Same-sex couples may find themselves having to file four separate state and federal returns.

Will designations and estate planning can help Maryland couples, and couples in other states, designate property and monetary assets that may otherwise be left in a gray area that does not necessarily favor the widow of a same-sex marriage. This may also prove helpful when children from a same-sex divorce are involved. However "unromantic" as some people may think, considering the circumstances of ever-changing legalities at hand, pre- and post-nuptial agreements may be the best individual protection for same-sex couples who wish to marry.

Source: TODAY.com, "Same-sex spouses may face financial tangles," Temma Ehrenfeld, June 12, 2012