New Hampshire same-sex divorce: What you need to know

Please check out my recent You Tube video on the topic of same-sex divorce in New Hampshire. We'll review length of marriage considerations, parenting rights for same-sex couples, and special property distribution issues in divorces for same-sex partners.

Understanding Same-Sex Divorce

In November, I authored an article on same-sex marriages in the New Hampshire Bar News geared towards helping practioners understand unique issues in same-sex divorces. I reprint here the full article:

Practicing family law in one of the six states that recognizes same-sex marriage requires an understanding of the unique challenges that same-sex couples face in a divorce. Usually, a divorce provides a mechanism to dissolve the legal relationship, divide property and establish parental rights and responsibilities. Although same-sex couples can dissolve their marriage in New Hampshire, reaching a fair and reasonable property division or establishing parental rights and responsibilities is much more difficult.

Marriage & Divorce

New Hampshire practitioners have limited precedent to guide them on several thorny issues that are distinctive to same-sex couples. Ironically, one of the few cases involving same-sex relationships, which is still good law, is now inconsistent with the state’s recognition of same-sex marriage. In the Matter of Blanchflower held that adultery does not include homosexual relationships. The court based its decision on the definition in New Hampshire of adultery, which excludes all non-coital sex acts, no matter the gender of the persons engaging in the act. Thus, although other fault grounds may be pursued, adultery is off the table for same-sex divorcing couples. The Blanchflower Court noted that it was not the function of the judiciary to extend past legislation to provide for present needs.

A common dispute in same-sex divorce is the calculation of the length of the marriage. In cases where the parties’ cohabitated long term prior to the marriage, one party may attempt to tack on the cohabitation to increase the length of the marriage and impact alimony and property division. This argument stems from the claim that had the parties been able to marry, they would have. Without New Hampshire precedent, the court may look to Massachusetts for guidance, where the Massachusetts Supreme Judicial Court has held that marriage benefits apply prospectively to the legalization of same-sex marriage. In addition to the cohabitation argument, the question also remains whether domestic partnerships, like those in California or New Jersey, might be similar enough to a marriage to tack on and create a long-term marriage.

Alimony

The IRS identifies alimony as payments made between spouses or former spouses pursuant to a divorce or separation agreement. Typically, alimony is deductible to the payor and includable as income to the payee for federal income tax purposes. However, the Defense of Marriage Act prohibits the federal recognition of same-sex marriages, and in turn precludes the IRS from recognizing a same-sex spouse as such. Although the IRS has not provided specific guidance on the issue, it seems clear that alimony payments are not tax deductible to the payor and may incur a gift tax liability. The IRS might alternatively consider the payments compensation for past services, with income tax, self-employment tax and possible withholding obligations. Either treatment will incur tax consequences that could be financially devastating to the family.

Property Division

In "traditional" divorces, opposite-sex couples rarely invokes tax consequences during the division of their marital assets. Such property transfers meet specific IRS exemption rules. Same-sex couples on the other hand can be saddled with a large tax liability as a result of property division.

The Defense of Marriage Act disqualifies same-sex spouses from the tax exemptions for property transfers made pursuant to a divorce decree. Instead, same-sex couples incur a gift tax liability for most transfers made between the spouses or former spouses in excess of $13,000. For example, if one spouse transfers $30,000 to the other spouse for property settlement, $17,000 would be taxable. In addition to gift tax, same-sex couples must be aware of capital gains tax when the home is transferred from joint ownership to one spouse.

A specific part of property division is the ability of a spouse to transfer property to a spouse or former spouse by qualified domestic relations order (QDRO) pursuant to the federal Employment Retirement Income Security Act (ERISA), a portion of a retirement plan or tax sheltered annuity. The tax treatment of such transfers depends on the word "spouse." In other words, in order to qualify for the tax-free transfer benefits, the relationship must be recognized by the IRS as a marriage. Under the Defense of Marriage Act, which defines marriage as between a man and a woman, a QDRO is not a vehicle available to same-sex couples to transfer retirement assets tax-free. Instead, same-sex couples must pay taxes and early withdrawal penalties on transfers made to the other spouse, regardless of whether it is deposited into the other spouses’s retirement account.

Parental Rights & Responsibilities

New Hampshire follows the legal principal that a child born into a marriage is presumed to be the legal child of both spouses. This presumption of legitimacy may be attacked however, and if successful could drastically affect the non-biological parent’s right to seek parenting rights and responsibilities, including residential responsibilities. Although the step-parent statute might be a useful tool in this circumstance, the parenting rights accessed through this avenue could look much different than the rights of a legal parent. Co-parent adoption is the safest way to establish protected parenting rights for each spouse.

Why Same-Sex Marriage and Divorce Requires a National Solution

Same-sex marriage and divorce needs a larger solution then the state’s rights approach. Texas Governor Rick Perry, a potential presidential candidate, recently discussed his views on New York’s legalization of same-sex marriage. Perry said: “You know what? That’s New York, and that’s their business, and that’s fine with me. Our federal government is engaged with far too many things they shouldn't be involved with at all." The problem with that view is that once it’s one state’s business, it’s every state’s business.

Historically, marriage has largely been left to the authority of the states. States issue marriage licenses, set the age of consent and prohibit certain family relations from entering into marriages. States also make laws regarding the dissolution of marriages, alimony, child support, property division and custody. But the federal government has its say as well. Congress enacted the Defense of Marriage Act, defining marriage for federal purposes as the union of one man and one woman. More importantly, DOMA specifically relieves states of the obligation to treat a same-sex marriage from another state as a marriage under its own laws. And that’s the trouble.

 

In today’s mobile society, where families easily move across state boundaries for jobs, family, retirement, and education, the failure of another state to recognize a same-sex marriage leaves families in legal limbo and without access to justice if divorce becomes necessary. A spouse, with no other means of support, may be prevented from seeking alimony. A child may be barred from seeing her non-biological parent, to her great detriment. A couple may be forced to remain legally bound to one another, long after they have separated, because their home state refuses to recognize the marriage and allow access to the family court system.

 

These situations and the devastating effects it can have on a family, demand remedy. I make the case for justice, setting aside the legal arguments of both sides of the same-sex marriage debate, from equal protection to the 10th amendment to the full faith and credit clause. The federal government must mandate that same-sex families may dissolve their relationships and settle custody disputes wherever they may move in the country. Until the federal government acts, New Hampshire, which requires the person seeking the divorce to have resided in the jurisdiction for one year, must allow same-sex families who have moved from New Hampshire to access the court system to dissolve marriages entered into in New Hampshire.

The election and same sex marriage

Although the country’s attention was, for the most part, focused upon the presidential election on November 4th, there were several ballot questions across the country regarding same-sex marriage. The most high profile was Proposition 8 in California, a ballot measure that passed and  amended the state constitution to define marriage as between one man and one woman. The passage of Prop 8 reverses In Re Marriage Cases, the California Supreme Court case that legalized same-sex marriage in the state this past June. Arizona and Florida also passed similar measures on November 4th, defining marriage as between one man and one woman with Prop 102 and Prop 2 respectively.

The election results highlight the vast divide throughout the country over same-sex marriage, with over twenty five states now banning same-sex marriage, two states allowing same-sex marriage and several states, including New Hampshire, allowing some form of civil union or domestic partnership. Additionally on a national level, the Federal Defense of Marriage Act defines marriage as it pertains to any Act of Congress or administrative rulings and regulations as “only a legal union between one man and one woman as husband and wife, and the word `spouse' refers only to a person of the opposite sex who is a husband or a wife.” With the wide disparity of laws from state to state, the inconsistency can leave families in legal limbo without a way to dissolve a legal relationship.

New Hampshire residents, thanks to the civil union statute, will not be left in legal limbo. If you have been married in another jurisdiction, or entered into a civil union, you may dissolve the relationship as though it were a civil union in New Hampshire.