Same-Sex Divorce Changes Post-DOMA

A divorce by a same-sex couple takes on new financial implications post-DOMA. In states recognizing same-sex marriage, LGBT couples will now be treated in the same legal framework as any other married couple. Financial changes that will apply include:

  • Not having to account for federal taxes when transferring assets and property
  • Being able to deduct alimony payments, and planning for taxes on alimony received
  • Dividing retirement assets and federal benefits with fewer tax and administrative complications
  • Making child custody and support less complex because of legal recognition of both parents
  • Simplifying the court process, which can lower costs
  • Further simplifying the entire divorce through the Collaborative Divorce Process, if both parties so choose.

Prior to the Supreme Court Ruling, the patchwork of rules that applied to same-sex couples often meant higher costs and a more complicated process, with uneven and sometimes disparate results. This was especially true with child custody and alimony decisions made at the discretion of a judge in the absence of clear State law and case law.

Where things still get complicated is when a legally married couple moves to a state that does not recognize same-sex marriages. Couples may not be able to divorce if the marriage is not legal in the state of residence, potentially forcing couples to move back to a “legal” state to divorce. Even then, some states have a residency requirement of 6 months or more before granting divorces. If a couple is legally married in one state but lives in another, careful consideration should be given to proper legal and financial planning.

The landscape is rapidly evolving and many regulations remain to be drafted and implemented. Stay tuned for updates!

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