It has been a year since the United States Supreme Court ruled that the Defense of Marriage Act was unconstitutional. Since that time, many other states have joined Minnesota in recognizing same-sex marriages. Today, marriage between same-sex couples is now legal in 19 states and Washington D.C. The unprecedented expansion of rights have left many gay people wondering how this relates to their finances.
One wealth planning professional citing an industry survey says that 83 percent of lesbian, gay, bisexual and transsexual investors are not fully aware of how their financial situation could be impacted by state and federal laws. The survey, which looked at 875 LGBT investors, showed that despite the confusion, 47 percent of those polled were in a gay marriage or partnership have since sought information regarding the impact of how court decisions affect their finances.
Another wealth management professional who specializes in advising same-sex couples says that many of her clients are unaware that they could be pushed into a higher tax bracket once both of the couple’s two incomes were combined. That expert also says that many of her clients had not considered the financial implications of what would happen should the marriage fall apart.
Prenuptial agreements are essentially contracts made between both spouses prior to the marriage. These contracts usually stipulate the assets and liabilities for each party. Of course, like any other legal document, the prenuptial agreement can be challenged in court. For example, the judge may decide to set aside a prenuptial agreement if they determine the information provided within the document is deficient. That is why it is a good idea for both parties to have legal representation present at the signing of the document. That is the best way to ensure both parties are engaging in a full disclosure of all available assets and liabilities.
Source: Investment News, “As gay rights expand, so does the need for financial advice” Liz Skinner, Jun. 26, 2014