Thursday, September 21, 2006

A Harvard Law School Takes a look at Prenuptial Agreements

What is The Reason that Most People, Don’t Have a Prenuptial Agreement?

A recent release of a paper by a Harvard Law School Olin Fellow explains that about 5 percent of married people have such an agreement, although the facts are that more then 50 percent of marriages end up in a divorce. This Harvard Law graduate explains what she has discovered.

What Inspired Her to Research the Facts on Prenuptial Agreements?

The facts are that more then half of marriages terminate and these once loving couples end up in divorce court, and a microscopic 5 percent have prenuptial agreements in place. Most of the perspective mates upon deliberation decide that if they bring the possibility of a prenup up to there would be intended, it suggests that they are planning for divorce, she concluded. She would investigate why couples were not protecting themselves with prenuptial agreements.

What is the Reason Couples Contemplating Marriage, don’t have a Prenuptial Agreement?

The two main reasons that prevent people from asking their perspective partner to sign to a prenuptial agreement.

First of all, as stated previously the majority of couples feel it predicts doom to suggest a prenuptial agreement to their perspective partner. Rumor has it that when Jennifer Lopez asked Ben Affleck to agree to a prenup, Ben Affleck ended the relationship.

The other reason is the majority of couples believe that in spite of the statistics showing that more then half of all marriages end in divorce, it will never happen to them. They believe their there love will overcome any possible obstacles that can occur in their relationship and that their foundation is unbendable and more stable then most people, and divorce will never happen.

Is it true as the courts have stated that prenuptial agreements are not absolutely contrary to promoting the stability of marriage?

The reality is a Prenuptial Agreement can create a situation where the marriage will be more difficult to terminate rather then easier to end. You can design a prenup that states divorce can not happen unless a travesty has occurred, like being unfaithful or whatever you decide is important as a couple. And in contrast, the majority of states accept no fault divorce.

Is it a fact that when prenups have additional instruction besides divisions of assets and state specific provisions when a divorce can occur, be upheld in court.

To the best of my understanding this type of Prenuptial Agreement has not been tested in divorce court. In past years every state insisted that a spouse show fault before a divorce could be granted. But there are states that accept an agreement for a "covenant marriage" where one spouse will be required to show fault before filing for divorce. It would be unlikely that any court would limit a couple’s prenup because it has requirements for a divorce.

Are children of divorce more likely to have a Prenuptial Agreement before they marry?

Shocking as it seems, the answer is no! As stated previously the reasons couples don’t have a prenup in place is not logical but emotional. Neither partner wants to create a situation that predicts doom. There are also other significant factors that should be mentioned. 1) If one of the partners has wealth, it is likely they will insist on a prenup. If you are married it is unlikely you will ask for a prenup. 3) Women will usually not insist on a prenup.

Would you suggest that Prenuptial Agreements be Mandatory?

It is important to understand why a prenuptial agreement is a win, win situation for both parties. After examining the research above, I would recommend a prenup. A mandatory prenuptial agreement would be beneficial to couples. It would eliminate that uncomfortable discussion of bringing up the matter because everyone would be required to deal with it as a matter of law, even if they feel they will never divorce.

Also the practice may eliminate unrealistic optimism of what the future may bring. Since everyone that marries will have a prenuptial agreement it will create a smoother transition into marriage. If this law was in place perhaps Jennifer Lopez and Ben Affleck would still be together?

Sign a Prenup, Don’t You Love Me!

Don’t be insulted, if your future partner insists you sign a prenup, because it will protect you as well.

You are anticipating the big day, it’s not about money, it’s about love and out of nowhere, you are asked to sign a prenuptial agreement.

You don’t want to make an issue of it; you’re a person of reason and logic, and realize your future mate’s family is putting the squeeze on him. But the very idea of being asked to do this has left you confused and upset.

You want to be considerate but you feel the pressure coming from your future in-laws. They are in a position where they want to protect their assets and you don’t have much to protect.

Your fiancée and his family have more money. But when you met your fiancée money wasn’t a factor and not your reason to take the relationship to the next level. Money wouldn’t keep you there. Be reasonable.

You’re not marrying a control freak, so the prenup should not be a problem. You can’t control everything, but the prenup can be crafted to be advantageous to you.

Create A Solid Base for Your Relationship

To begin with it’s a chance (If you decide to have a prenup) for you and your future mate to put your financial cards on the table, which is very prudent. It’s good to know what will be expected in real terms, not just in your mind. Marriage is a joining of two people in a social and financial agreement.

For the most part unless you or your future mate are wealthy, economic concerns are rarely brought up because of the fear of offending the other. This is a terrible error in judgement and can cause unreversible problems in the future.

To create a great partnership you will need to sit down and draw up a plan that will be the foundation of understanding between you and your future spouse. The Prenuptial Agreement should be something you can both happily live with. It needs to be fair and be able to stand the test of time.

If you both get what you need (Not Necessarily What You Want) you have a successful prenup. Both parties have a responsibility to contribute to the final prenup. The one with the greater financial assets does not rule. If they do, it will cause resentment and result in a weak foundation to what you hope is a lifelong relationship.

The point is consideration, based on fairness and not greed. Each person has needs that must be addressed.

Boost up Your Financial Position

Even if you are not the one with the greatest assets the prenup can protect you as well and not leave you out in the cold.

It actually can be a way to put you in a better financial position. So discuss and negotiate what your position should be. When someone loves you and wants to marry you, could you ever be in a stronger position for generosity. It’s an opportunity to make a great deal. If you get a divorce and you don’t have a prenup your once great love will not be in a generous mood and want to give you as little as possible. Your position should be to try to get more then the law would allow without a prenup.

In a great majority of couples the wealthy partner will cover living expenses. The person with the least money or earnings usually gets to keep their assets in their own account to do with as they wish.

From the very beginning of the marriage there could be an outright transfer of money or assets. Usually increasing as the years go by. This is a form of protection if the wealthy spouse dies first. Certainly your new mate will want to protect you in the event of their death.

There are differences and variations in prenups as there are in people. Everyone has to customize their agreement to meet their specific needs. You must respect each other above all to work out the best possible prenuptial agreement.

Will A Prenup Override Your State Law

Won’t the state laws alone protect you, in the event of death, divorce or terminal illness? Surely the state will be fair? Why do I need it now? Experts in this area claim you and your partner will never be at a point when generosity and fairness will have a stronger position, considering that you are in love. If for some unfortunate reason you wind up in divorce court things will be very different.

If your partner dies the state cannot protect you. If your wealthy spouse’s family does not want to be generous or guarantee you security, there is no law that can protect you. They are not obligated to treat you as your spouse would if he/she was alive.

Educate yourself specifically to laws governing marriage where you live and find out if there is any protection. When you get married without a prenuptial agreement you are voluntarily agreeing to the laws of the state you live in. So ignorance or fear of dealing with this issue can be very costly.

Most states are equitable distribution states where the laws of the state will consider what each partner contributed financially to the marriage and if divorce occurs assets are divided according to your contribution. It may be approximately 50-50 split, but not necessarily. It would be a good idea to establish this from the beginning. If one of you are planning to stay home and take care of the kids make it clear that there will be a 50-50 split, if divorce happens.

For the most part assets or inheritances brought into the marriage are not considered joint assets. But the day you get married the clock starts ticking. So if you marry a wealthy person who doesn’t work, can’t work for any reason, there may not be much of a contribution to your personal account, if any. In the final scene you could be shut out with nothing. Could there ever be a stronger reason for a prenup!

Don’t let the state decide for you. Their interests are different then yours. When you have a prenup you and your future mate have decided what you want and they are very different from what state law may or may not give you. If divorce comes you may not be happy, but you will be protected with a prenup.

Most importantly Get Legal Advice

You must each have your own lawyer to represent your personal interests.

Any attorney will not do. Find a lawyer who specializes in this area. It will be more expensive, but worth every dime. Look for someone with a lot of experience and not someone right of law school. You wouldn’t want to be a new surgeons first operation.

It’s a trust building process and you don’t want it to be adversarial. Don’t go into this with "what I can I get if things fall apart". It’s an opportunity for bonding.

Remember you’re getting married, and you’re in love! And that’s Wonderful! Just cover you assets!

Sunday, June 25, 2006

Reasons Why A Prenuptial Agreement May Not be Valid

1. Unconscionability. It's true that you can Agree To Give Up Your Right to inherit from your spouse, which you would otherwise be entitled to do upon your spouse's death, even if he or she left you out of a will. You can sign away your right to spousal support if you should end up in divorce court, even if your spouse makes ten times as much money as you do.

You can even agree that your spouse gets all of the money and you get all of the bills, if that is what you want to do. But if the agreement is so grossly unfair that one party gets everything and the other gets nothing, the court probably will not enforce it. Unconscionable Contracts which only a fool would sign, are generally found invalid; and prenuptial agreements are no exception.

2. No Independent Counsel. Because their separate interests are at stake, both parties to a prenuptial contract should, and in some states must, be represented by their own attorneys or the agreement will not be enforced.

3. Incomplete Information. Holding out on pertinent information is as bad as providing false information, and it makes the agreement useless.

4. False Information. A prenuptial agreement is valid only if signed after both parties have honestly disclosed their income, assets, and liabilities. If someone was lying, the agreement is invalid.

5. Provisions Not Legal. Although a prenuptial agreement can cover just about any financial aspect of the parties' relationship, it cannot in any way modify the child support obligations that either spouse would have if the marriage should end in divorce. Any other provisions of the agreement that violate the law would also be invalid. It is possible, however, that the court would enforce the remainder of the agreement, axing only the illegal clauses.

6. No Time to Think It Over. A prospective spouse entering into a prenuptial agreement must be given time to review it and consider the ramifications before signing it. If the groom hands the contract and a pen to the bride just before she says, "I do," the agreement is probably invalid.

7. You didn't read it. if your spouse-to-be shoves a bunch of papers, including a prenuptial agreement, in front of you and asks you to sign them, explaining them away with such excuses as "it's all just a bunch of legal mumbo jumbo," and you take him or her at face value and sign without reading, the agreement should not be enforceable.

8.Your Arm was Twisted. An agreement may not be valid if one of the spouses was pressured by the other or by his or her lawyer or family) to sign the agreement.

9. Not Properly Signed. Both parties must sign prenuptial agreements before the wedding

10. Agreement Not In Writing. prenuptial agreements must be in writing to be enforceable.

Thursday, June 15, 2006

Get a Prenuptial Agreement before Your Next Marriage

While signing a prenuptial agreement can be one of the all-time romantic turnoffs, for people heading into their second marriage, a prenuptial agreement can give the trade-off of a better relationship through the security of financial and life planning.

A prenuptial agreement is a legal contract between two people about to marry, specifying how assets will be distributed in the event of divorce or death. A prenuptial agreement is a good idea, even if you aren’t rich or own a home. It saves future arguments and can even save you money.

A prenuptial agreement requires that each partner prepare an inventory of assets owned before the marriage, and it allows you to establish your separate priorities about those assets.

Even if you do nothing more than that in your prenuptial agreement, this gives children from a previous marriage a chance to have half of that property and establish what belonged to Mom or Dad before the second marriage, and it establishes what you're taking with you should you leave the marriage."

Statistically, second or third marriages are more likely to result in divorce than first-time unions. Because of this, a prenuptial agreement is an especially wise idea.

• A prenup is important if one of you is wealthier than the other.

• If you have assets such as a house, stock or retirement funds, you should have a prenup.

• A prenuptial agreement is essential if you own part or all of a business.

• A prenup can discuss your wishes if you may be receiving an inheritance.

• If you have relatives who need to be taken care of, such as disabled children or elderly parents, a prenuptial agreement is very important.

• If you expect to receive a big increase in income because of a growing business, a prenuptial agreement can address this issue.

• A prenuptial agreement is essential if you have children and/or grandchildren from a previous marriage.

We recommend that each partner draw up a list of assets. Furthermore, for professional couples, prenuptial agreements can be the ultimate protection against all-too-common lawsuits or medical malpractice suits. You can't predict all of your life events, and prenuptial agreements are a means of keeping your own assets safe in the event of any financial problems that your spouse may experience.

Note that Legal Helpmate provides an easy-to-use, quick, and economical online method for creating Prenuptial Agreement (Premarital Contract).

Thursday, June 01, 2006

The Prenuptial Agreement & Tax Consequences

It is essential that the parties entering into an agreement be advised of tax ramifications of property transfers made pursuant to the agreement, and that the agreement be examined from time to time to be sure that the results are reflected in the current tax law.

While merely executing a prenuptial agreement usually does not result in any immediate tax consequences, taxes will become an issue later upon divorce or death for all transfers made prior to the marriage, during the marriage, and upon the cessation of the marriage.

Prior To and During Marriage
Since the issue in a prenuptial agreement is to transfer property rights in exchange for release of marital rights or against a will, the tax consequences will depend on when the transfer takes place. Generally, property transfers made before the marriage may have adverse income and gift tax results, while they will not incur gift tax or income tax if made during the marriage. Therefore, the prenuptial agreement should stipulate that any transfer of property occur after the wedding.

Prior to the enactment of Sec. 1041, the Supreme Court ruled that the transferor recognized gain for income tax purposes equal to the difference between the fair market value of the property transferred and its adjusted basis when such property is transferred in exchange for the release of property rights. No income tax was recognized by the party who released the marital rights, as both the IRS and the courts have held that for income tax purposes, the value of marital rights is equal to the value of the property received. However, for estate and gift tax purposes, marital rights are not considered full and adequate consideration, and consequently, the transfer of property is treated as a gift (Sec. 2043(b); Reg. Sec. 25.2512-8).

Sec. 1041 was entered to override the court's decision to tax the gain on property transferred between spouses and former spouses when the transfer is made incident to divorce. Transfers within six years after divorce that are pursuant to the terms of a divorce decree are deemed to be incident to divorce. A transfer between prospective spouses, however, is still treated as a sale and the transferor will recognize gain if the value of the property exceeds his or her adjusted basis.

For example, a man and woman are contemplating marriage. She has substantial assets she wishes to protect in the event of divorce or death; therefore, she and her fiance execute a prenuptial agreement that allows her to transfer $250,000 to him in exchange for his release of all marital claims against any of her property in the event of divorce or death. One month before the wedding, she transfers stock worth $250,000 to him. Since she had purchased the stock several years ago for $50,000, the transfer of the stock causes her to have a taxable gain for income tax purposes of $200,000. In addition, she has made a gift (subject to the gift tax rules) of $250,000 and his basis in the stock is $250,000.

If the transfer of the stock had occurred after the wedding, then she would have not recognized gain on the transfer, as Sec. 1041(a) provides that property transfers between spouses do not result in recognition of gain or loss. Neither would she have been subject to gift tax because Sec. 2523(a) provides for an unlimited marital deduction for gifts between spouses. Therefore, the prenuptial agreement should provide for property transfers to occur after the wedding.

If terms of the prenuptial agreement provide for a series of payments by one spouse in return for the other spouse's release against the transferor's assets in the event of divorce or death, then no income or gift tax consequences result as long as the couple is married during the entire stream of payments. If the couple divorces before the last payment, remaining payments may constitute gifts made outside marriage.

After Cessation of the Marriage
If the marriage ends in divorce, the prenuptial agreement often spells out the property rights and obligations of both parties. Property transfers between former spouses pursuant to a prenuptial agreement are classified as property settlements, alimony, or child support. Alimony is taxable to the recipient and deductible by the payor, but property settlements and child support are neither taxable to the recipient nor deductible by the payor.

Alimony is objectively defined because the payor spouse benefits from payments being classified as alimony, while the payee spouse benefits from payments being classified as either child support or a property settlement, for federal income tax purposes. All payments meeting the seven objective criteria are classified as alimony payments, regardless of the parties' intent, even if the payments do not satisfy the payor's support obligation under state law. Similarly, payments that do not meet the objective criteria for alimony for tax purposes are not deductible to the payor, even if such payments qualify as alimony under state law or the parties intend for them to qualify as alimony.

Alimony Payments
To be deductible for tax purposes, alimony payments must meet the seven objective criteria provided in IRC Sec. 71. Payments that do not meet these criteria are recharacterized as either child support or a property settlement. Consequently, if the parties wish to have certain payments qualify as alimony, it is essential that the terms of the prenuptial agreement be structured so all criteria are satisfied. Each of the objective criteria is provided below.

1. Payments must be made in cash.

2. Payments must be received by or on behalf of a spouse under a divorce or separation instrument. Further, if the parties have entered into a prenuptial agreement providing for the support of either spouse, and the divorce decree or written separation instrument refers to the prenuptial agreement for the determination of alimony, then the prenuptial agreement will be treated as pursuant to a divorce instrument.

3. The payor's obligation to make payments must end with the death of the payee spouse.

4. The instrument must not specifically designate that the payments are not alimony.

5. The filing of a joint tax return is prohibited.

6. In the case of legally separated spouses, the payor and payee spouses must not be members of the same household at the time of the payment.

7. Payments cannot be fixed as child support or treated as fixed as child support.

Keep each of the seven criteria in mind when reviewing the tax consequences of the terms provided in a prenuptial agreement. Some of the common problems encountered causing alimony payments to be classified as a property settlement for tax purposes are discussed below.

First, non-cash spousal support payments made pursuant to the terms of a prenuptial agreement, even those that satisfy the payor's obligation for alimony under state law, are not deductible. The prenuptial agreement should specify that all alimony is to be paid in cash.

Second, the terms of the prenuptial agreement should be structured so the payor spouse has no obligation to make any payments after the payee spouse's death. If such payments are permitted to occur, then none of the payments, even those made before the death of the payee spouse, qualify as alimony.

For example, the husband is required to pay his wife $20,000 per year for 15 years or until her death, whichever is earlier. The agreement also provides that if she dies before the end of 15 years, he will pay her estate the difference between the $300,000 that she would have received over the 15 years, less the amount that she actually received. The fact that he is required to make a lump sum payment to hwe estate upon her death suggests all payments are a substitute for a $300,000 lump sum payment. Consequently, none of the annual $20,000 payments qualify as alimony.

When the prenuptial agreement does not address this issue, state law determines whether the payee spouse has any continuing obligation to make payments. In most states, support payments automatically cease upon the payee's death; however, it is possible for payments that were not classified as alimony, for state purposes, to have qualified as alimony for federal income tax purposes. Such payments would not cease upon the payee's death and all payments, even those made before the payee's death, would be recharacterized as property settlements. To ensure that payments are characterized as alimony for federal income tax purposes, the prenuptial agreement should contain a formal statement that the obligation to make payments terminates at the recipient spouse's death.

Third, if the parties wish to treat cash payments as something other than alimony, the prenuptial agreement must state which payments the parties do not want treated as alimony. For federal income tax purposes, all payments that qualify as alimony will be treated as such unless the payments are specifically designated as child support or a property settlement. It is a good idea for the prenuptial agreement to contain a provision that allows the spouses to change the designation of those payments from non-alimony to alimony in future years. This gives the parties some flexibility in case the circumstances of the parties change in future years.

Finally, the terms of the prenuptial agreement should be structured to avoid any language that could be construed as representing child support. If it is possible to determine, by reference to the prenuptial agreement, what portion of a payment was intended as child support, then that portion of the payment will be treated as child support and only the remainder will be considered alimony. Payments are treated as child support to the extent that they are subject to reduction on the happening of a contingency specified in the instrument relating to the child; or at a time that can be clearly associated with a contingency related to the child.

Contingencies relating to a child include, but are not limited to, the child attaining a specific age or income level; the child marrying, dying, or gaining employment, and the child leaving school or the spouse's household Reg. Sec. 1.71-1T(c), Q&A-17. A payment reduction associated with a contingency with respect to a child is a much more ambiguous standard and depends on an analysis of the facts and circumstances of the situation. See Reg. Sec. 1.71-1T(c), Q&A-18, for specific instances that are deemed to be associated with a contingency with respect to a child.

Example: Scott agrees to pay Debbie $2,000 per month until she dies. Debbie has custody of their child, Eric. The agreement states that upon Eric attaining the age of 16, the monthly payment will be reduced to $1,200. Of each $2,000 payment, $1,200 is alimony and the remaining $800 is treated as child support.

Alimony Recapture. Payments that would otherwise qualify as alimony that decreases rapidly in the first three years following separation or divorce, may be recharacterized as a property settlement. After the terms of the prenuptial agreement have been analyzed to determine which payments qualify as alimony for tax purposes, it is necessary to check whether the alimony recapture provisions apply. Recapture does not apply to payments reduced due to death of either spouse; the remarriage of the payee spouse where payments cease under the terms of the divorce decree; temporary support payments; or fluctuating payments from a pre- existing formula (e.g., percentage of gross income from a business), when the formula is fixed under the terms of the divorce or separation instrument and is effective for at least three years.

If the recapture rules apply, then before signing the prenuptial agreement the parties need to revise the terms of the agreement so payments are not subject to alimony recapture. Payments recharacterized under the alimony recapture rules become income to the payor spouse and a deduction to the recipient spouse.

Alimony recapture, if applicable, occurs in the third post-separation year and is the sum of the excess payments made in both the first and second post-separation years. The second-year excess payment is determined first and is calculated as the amount by which the second year's payment exceeds the third-year payment plus $15,000. The first- year excess payment is then calculated as being the amount by which the first-year payment exceeds the average of the adjusted payments from the second year and the payments from the third year, plus $15,000.

The recapture rules apply only to excess payments made in the first three post-separation years. Consequently, payments made after the third year may be reduced without recapture. Payments increasing from year to year do not trigger recapture.

Property Settlements. When the parties intend to use a prenuptial agreement to designate each spouse's property rights and obligations in the event of divorce and want to ensure that all transfers made after divorce avoid both income and gift tax, the prenuptial agreement should include a provision that makes all payments conditional on their being included as part of the divorce decree. Sec. 1041 provides that no gain or loss is recognized for income tax purposes on the transfer of property incident to divorce and that such transfers are treated as gifts. In situations where there is nonresident alien spouse, extreme caution is necessary as the benefits of Sec. 1041 are sharply curtailed Sec. 1041(d).

The code also states that transfers occurring within one year after the cessation of marriage are deemed to be incident to divorce, and the regulations provide that transfers made within six years after a divorce are deemed to be incident to divorce, only if the transfers are made pursuant to the terms of the divorce or separation instrument Reg. Sec. 1.71-1T(b), Q&A-7.

Child Support. If the parties intend for certain payments to qualify as child support, rather than alimony, then the amount of the payment constituting child support should be specifically stated in the terms of the agreement. In situations where payments are reduced in violation of the terms of the agreement (i.e., the payor spouse is delinquent), payments are first treated as child support payments before any alimony income is reported by the recipient.14

Example: Under terms of the separation agreement, Jack is required to pay Lisa $1,000 per month, $600 of which is designated in the agreement as support for their minor child. If Jack only pays Lisa $9,000 during 1992, then $7,200 will be considered child support and the remaining $1,800 will qualify as alimony.

In situations where the prenuptial agreement requires a specific payment for both alimony and child support without separately stating the amount of each, the entire payment will be treated as alimony.

Example: Hal agrees to pay Wanda $600 per month until she dies. Wanda has custody of their child, Chris. The agreement states that as long as Hal continues to make monthly payments to Wanda, he is relieved of all support obligations for Chris. Even if Wanda can show that the entire amount was used to support Chris, the entire $600 qualifies as alimony since it cannot be determined from the agreement how much of each payment is for child support.

In the Event of Death

When a prenuptial agreement takes effect due to the death of a spouse, the property is included in the decedent's gross estate and the recipient spouse takes a basis in the property equal to its fair market value Sec. 2043(b). As previously discussed, most states give the surviving spouse the right to elect against what was provided in the will and instead takes a set percentage of the deceased spouse's assets. This problem is eliminated when the parties address the issue in an enforceable prenuptial agreement.

Example: Richard and Molly are contemplating marriage. Richard, who was previously married, has accumulated a considerable amount of wealth that he wishes to leave to his children. Richard and Molly enter into a prenuptial agreement wherein Molly agrees to waive any claims against Richard's assets upon his death. In return, Richard agrees to transfer, at the time of his death, a percentage of his assets into trust with the income to go to Molly for the remainder of her life and the property to go to his children upon her death. The remainder of Richard's estate goes directly to his children. In the event of Richard's death, Molly would be unable to elect against the will provisions and the executor of Richard's estate could elect to treat the trust as a QTIP trust, since the property in the trust is qualified terminable interest property and Molly is entitled to the income from the property for life. Thus, the estate would receive a marital deduction for the value of the trust assets Sec. 2056(b)(7).

Tuesday, May 16, 2006

Same Gender Marriages

In 1999, the Vermont Supreme Court issued a landmark decision in the case of Baker v. State, 744 A.2d 864 (Vt. 1999), ruling that prohibiting same-sex marriage violated the Vermont constitution because it denied same-sex couples the rights granted to heterosexual couples.

However, rather than order the government to issue marriage licenses to gay and lesbian couples, the court left it up to the state legislature to remedy the situation. In response to the court's order in Baker v. State, the Vermont legislature passed a law creating a "civil union registration system," under which same-sex couples can register their partnership and receive all the benefits of state laws that apply to married couples.

Although the U.S. Constitution requires each state to give "full faith and credit" to the laws of other states - for example, by recognizing marriages and divorces made across state lines - the federal Defense of Marriage Act (DOMA), passed in 1996, expressly undercuts the full faith and credit requirement in the case of same-sex marriages.

That said, because the DOMA abridges the rights guaranteed by the U.S. Constitution, it may be challenged legally in the near future. Furthermore, Massachusetts Supreme Judicial Court clarified its ruling late last year that denying marriage licenses to same-sex couples violates the Massachusetts Constitution's guarantee that all citizens be treated equally under the law. Lambda Legal predicts that within a few months, same-sex couples in Massachusetts will begin getting married. They will be able to visit their spouses in the hospital, make decisions about each other’s health care and be fully recognized as parents of their children.

Anti-gay groups may proceed ahead in efforts to amend the state’s Constitution to carve out an exception to the time-honored guarantee of equality. As that debate moves forward, people will see same-sex couples who are legally married - and they will see that in seeking to protect their families, these married couples pose no threat to society. Benefits for Same-Sex Couples in California, Hawaii and Vermont. If you're a member of a same-sex couple living in one of these three states, you can take advantage of laws that allow you to register your partnership and receive many of the benefits granted to married couples. California.

To register a domestic partnership in California, visit the California Secretary of State website at (Look under "Special Programs Information.") Hawaii. To learn about registering your partnership in Hawaii (where it's called a "reciprocal beneficiary relationship"), visit the website of Hawaii’s Vital Records office at Vermont. To read the official guide to Vermont's civil union law, go to and click on "Publications."