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September 27, 2015 at 10:39 AM
The Supreme Court’s June ruling on Obergefell v. Hodges, which declared that state bans on same-sex marriage were unconstitutional, does not end many of the unique financial planning issues faced bylesbian, gay, bisexual and transgender individuals or couples. During Friday’s Pride Planners gathering — a preconference to the FPA BE national conference in Boston — experts from the legal, planning and advocacy areas discussed those tricky remaining issues.
Fred Hertz, an attorney in Los Angeles whose practice focuses on marriage and divorce issues, pointed out that especially for older LGBT couples, their prior valid or invalid marriages or domestic unions may complicate divorce and estate planning issues. “Life was simple 20 years ago,” Hertz only half-joked, “you had no rights.” But while waiting for LGBT rights to be acknowledged, “none of us could put our lives on hold.”
Therefore, “messy situations will come up” for longtime LGBT couples, including “When were you married? In what state?” While for straight couples, “there’s a short answer to the question: are you married?’” Hertz said that “for our clients, it’s a story” that might well include multiple legal couplings that complicate their current state, which he called “polygamy issue,” especially for those who were once married or had state-authorized civil partnerships that had dissolved.
“People have a right to divorce,” Hertz said, promising “I won’t pathologize divorce.” There is one benefit to being gay, however, “a more open approach to splitting up.” But “our clients don’t see the justice system as friendly,” and he sees a “discordance between marital laws in most states and the way lesbians and gays live.”
When he talks to clients about writing prenups or postnups, Hertz says he introduces the notion as “the legislature has already written your agreement” in a community property state like California. In such states, a judge deciding on a divorce settlement “can’t share any property held by one party before marriage.” Clients, he said, need to understand that before their marriage, saying “we bought a house” is inaccurate, and should rather say “he bought a house” or “she built up a retirement plan.”
As for pre- or post-nups, he encouraged the advisors in the audience to encourage clients to “see the pre-nup process as a way to bring” the couple closer together. “This is one way of taking care of one another,” Hertz said, by discussing their expectations, fears and hopes about what marriage will mean when it comes to their assets.
J.T. Hatfield Charles, an advisor whose Bethesda, Maryland-based firm, Financial-360, is affiliated with Raymond James Financial Services, jokingly claimed that he had invented a trademarked phrase to describe life for LGBT community following the Supreme Court’s Obergefell decision: The New Normal.
Gaining “marriage rights do not make us all alike,” said Hatfield Charles — an FPA ambassador to the LGBT community — before jumping into a review of what he learned from all the speakers in the day-long Pride Planners conference.
