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Equal property division a challenge when gay marriages fail

| Jul 16, 2014 | Property Division

Same-sex couples in Florida are currently not allowed to marry in the state. If and when Florida does legalize gay marriage, couples should think long and hard about making the decision to make it legal. Why? Because if the marriage turns sour, getting divorced is a challenge. If a state does allow gay divorce, the couple is bound to face unequal property division and taxes.

Gay marriage – and divorce – is becoming more commonly accepted, which means that same-sex couples who decide to call it quits are seeing more equality. But when the Defense of Marriage Act was in play, couples got no tax breaks. Property division and transfers were considered gifts subject to taxation.

However, the United States v. Windsor case broadened the terms “spouse” and “marriage” this past March. This brought about numerous financial benefits. Retirement plans could now be split, and one party could receive alimony while the payer could receive the tax deduction.

However, many couples are unable to receive these benefits because they cannot even get divorced in most states. Same-sex divorces can only be performed in the 19 states that allow gay marriage. So if the couples moves to a state that doesn’t recognize gay marriage, they would have to meet the residency requirements of a state that does allow it before they can file for divorce.

Asset division is complicated enough in a heterosexual divorce. When gay couples seek divorce, they should expect many challenges. Although the laws continue to change in their favor, they are still a long way away from equality. A lot of progress still needs to be made.

Source: Main Street, “Same-Sex Marriage Finds More Inequality in Divorce: Pain in Progress,” Amy Xie, July 8, 2014

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