Legal Protections for Same-Sex Couples Who Choose Not to Marry or Enter Civil Union

Nov9

Same-sex marriage is not yet available in every state or country. Some lesbian and gay couples have chosen to marry or enter into civil union in a state that does allow the union even though their own state of residence does not. Other couples — many of whom have been together for decades — opt not to ‘tie the knot’ even when it is available to them. Marriage (or civil union) is a personal choice that is not for everyone. It is the latter group of same-sex couples that I am addressing in this space tonight.

As a lawyer, I handle all sorts of matters for lesbian and gay couples. I find that such matters (or questions about specific issues) seem to run in cycles. Recently, I’ve taken a lot of calls from lesbian and gay folks who are not married (or have not entered into civil union). They have unique problems to which they seek answers.

The most common problem is when one partner in a committed relationship dies — remember, the couple is unmarried — and the surviving partner wants to know his or her rights to the deceased’s real and personal property. I’ll start by saying that absent a Last Will and Testament that clearly gives the survivor specific property and/or money, or absent a deed to real property on which both partners were named joint tenants with rights of survivorship, it’s not looking good.

Let’s say that you are in a committed long-term relationship and the home you live in is solely owned by your partner. In other words, you have no legal title to the house. Although you have contributed to the mortgage all these years and split the cost of utilities, repairs, maintenance and taxes, you don’t have any legal rights to the house if he/she dies.

If you happen to be the sole owner of the house in which you reside with your partner, you have a couple of options if it is your intention to allow him/her to reside there after your death. First, you can leave the house to your partner outright in your Last Will and Testament. Another option is to leave your partner a ‘life use’ in the home, meaning that he/she is allowed to reside there until his/her death (or perhaps confinement to a nursing home, marriage, or something similar). You can choose the specific terms of the ‘life use’ clause. When your partner later dies (or terminates residence at the home), the title to the property will pass to the beneficiary of your choosing, such as your children or family members. This is done through your Will. If you do not leave a Will that creates some type of legal rights to the home, your partner is out of luck.

The same is true of bank accounts, investments, automobiles, art collections, antiques — anything owned solely by one person in the relationship. Absent your name on any of those things, you don’t own them. Without a Will, those items will pass to your partner’s biological family according to the laws of intestacy. Again, you’re out of luck. If your partner does leave a Will, he/she can specify which items of personal property, bank accounts and automobiles should be given to you upon his/her death.

There are some financial instruments and retirement plans on which each partner can designate the other as beneficiary upon death. If you are not listed as the beneficiary and there is no Will instructing those financial instruments to go to you, well, you’re out of luck. The same is true of life insurance policies. It’s always best to contact the companies handling your investments for specific instructions on how to add your partner as a beneficiary. If you choose not to do that, you may be able to leave those financial instruments to your partner via your Will.

In some cases, unmarried couples ask me to prepare a Quit Claim Deed that grants one partner rights to the title of the house now solely owned by the other partner. If one partner dies, the full title to the house is then owned by the survivor. There is one caveat to that method: once you Quit Claim the house to your partner, he/she becomes a co-owner right then and there, not just after you die. If you split up, your partner still owns half of your house. If that is not your intention, you should consider having an attorney draft a Property Settlement Agreement. Such an agreement is much like a Prenuptial Agreement in that it clearly instructs what occurs with respect to your house and other property in the event of a break-up (as opposed to a divorce) and does not leave anything to chance. For example, the agreement might instruct that upon your break up, full title to the house reverts back to you as the original owner and that your partner will be required to execute a Quit Claim Deed to make that effective. You could designate a specific buy-out amount. There are a variety of terms that could be included. Such an Agreement is a legal contract that is enforceable in a court of law. You will both be bound by its terms. I advise people to consider such an agreement prior to executing any Quit Claim Deeds. As warm and fuzzy as it is to want to protect your partner in the event of your death, break-ups are also part of life. Let’s just say that you might not be feeling so warm and fuzzy when you have to buy out your partner’s interest in your house at one-half of the fair market value after you caught him/her cheating on you. It happens, I’m afraid.

My free advice for tonight is: Be prepared. Do your homework. Decide what’s best for you as a couple. Then do it. Don’t wait until it’s too late.

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Disclaimer: The information, comments and links posted on the blog do not constitute legal advice. I will not respond to any specific legal questions in the comments section of this blog. Read my entire disclaimer.

Legal Standards for Postnuptial Agreements Articulated by Connecticut Supreme Court

Apr28

Postnuptial agreements are as common among gay and lesbian couples as they are among straight couples. I posted an article on my other legal blog, Attorney O’s Midnight Musings about a case that was decided by the Connecticut Supreme Court on April 26, 2011 that sets forth the legal standards for postnuptial agreements. Because it’s an such important issue, I am re-posting it here:

In the case Bedrick v. Bedrick, released on April 26, 2011, the Connecticut Supreme Court set forth, for the first time, the applicable legal standards for postnuptual agreements in this state. According to the Court:

“Because of the nature of the marital relationship, the spouses to a postnuptial agreement may not be as cautious in contracting with one another as they would be with prospective spouses, and they are certainly less cautious than they would be with an ordinary contracting party. With lessened caution comes greater potential for one spouse to take advantage of the other. This leads us to conclude that postnuptial agreements require stricter scrutiny than prenuptial agreements. In applying special scrutiny, a court may enforce a postnuptial agreement only if it complies with applicable contract principles, and the terms of the agreement are both fair and equitable at the time of execution and not unconscionable at the time of dissolution.”

The Court then defined what constitutes a fair and equitable postnuptial agreement:

[T]he terms of a postnuptial agreement are fair and equitable at the time of execution if the agreement is made voluntarily, and without any undue influence, fraud, coercion, duress or similar defect. Moreover, each spouse must be given full, fair and reasonable disclosure of the amount, character and value of property, both jointly and separately held, and all of the financial obligations and income of the other spouse. This mandatory disclosure requirement is a result of the deeply personal marital relationship.”

The Court also directed how a court shall determine the validity of a postnuptial agreement and how to determine if it is fair and equitable:

[I]n determining whether a particular postnuptial agreement is fair and equitable at the time of execution, a court should consider the totality of the circumstances surrounding execution. A court may consider various factors, including ‘‘the nature and complexity of the agreement’s terms, the extent of and disparity in assets brought to the marriage by each spouse, the parties’ respective age, sophistication, education, employment, experience, prior marriages, or other traits potentially affecting the ability to read and understand an agreement’s provisions, and the amount of time available to each spouse to reflect upon the agreement after first seeing its specific terms . . . [and] access to independent counsel prior to consenting to the contract terms.’’

And how to determine if a postnuptial agreement is unconscionable at the time of dissolution of the marriage:

“With regard to the determination of whether a postnuptial agreement is unconscionable at the time of dissolution, ‘‘[i]t is well established that [t]he question of unconscionability is a matter of law to be decided by the court based on all the facts and circumstances of the case.’’ (Internal quotation marks omitted.) Crews v. Crews, supra, 295 Conn. 163. ‘‘The determination of unconscionability is to be made on a case-by-case basis, taking into account all of the relevant facts and circumstances.’’ Cheshire Mortgage Service, Inc. v. Montes, 223 Conn. 80, 89, 612 A.2d 1130 (1992). Unfairness or inequality alone does not render a postnuptial agreement unconscionable; spouses may agree on an unequal distribution of assets at dissolution. ‘‘[T]he mere fact that hindsight may indicate the provisions of the agreement were improvident does not render the agreement unconscionable.’’ (Internal quotation marks omitted.) Lipic v. Lipic, 103 S.W.3d 144, 150 (Mo. App. 2003). Instead, the question of whether enforcement of an agreement would be unconscionable is analogous to determining whether enforcement of an agreement would work an injustice. Crews v. Crews, supra, 295 Conn. 163. Marriage, by its very nature, is subject to unforeseeable developments, and no agreement can possibly anticipate all future events. Unforeseen changes in the relationship, such as having a child, loss of employment or moving to another state, may render enforcement of the agreement unconscionable.

This is an important case of first impression that now sets the standard for postnuptial agreements. If you and your spouse are considering a postnup, you should contact a licensed attorney.

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What is the Connecticut Premarital Agreement Act?

Sep8

I posted the following tonight on my other blog, Attorney O’s Midnight Musings: Connecticut Law. It is equally applicable to lesbian and gay couples:

The Connecticut Premarital Agreement Act

I practice law in Connecticut and I receive calls every week from people who are contemplating marriage and want more information on premarital (or prenuptial) agreements. Often, a person will explain that she has substantial assets (or stands to inherit substantial assets from her parents) which she wants to protect in the event of a dissolution of marriage, legal separation or annulment.

The Connecticut Premarital Agreement Act (found at C.G.S. 46b-36(a-j)) defines “premarital agreement” as “an agreement between prospective spouses made in contemplation of marriage.” It is a legally enforceable contract between the parties that designates their respective rights and obligations.

Section 46b-36d states that:

“(a) Parties to a premarital agreement may contract with respect to:

(1) The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;

(2) The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;

(3) The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;

(4) The modification or elimination of spousal support;

(5) The making of a will, trust or other arrangement to carry out the provisions of the agreement;

(6) The ownership rights in and disposition of the death benefit from a life insurance policy;

(7) The right of either party as a participant or participant’s spouse under a retirement plan;

(8) The choice of law governing the construction of the agreement; and

(9) Any other matter, including their personal rights and obligations.”

It is important to note that pursuant to 46b-36d(b):

“ No provision made under subdivisions (1) to (9), inclusive, of subsection (a) of this section may be in violation of public policy or of a statute imposing a criminal penalty.”

It is also important to understand that under 46-b-36d(c):

” The right of a child to support may not be adversely affected by a premarital agreement. Any provision relating to the care, custody and visitation or other provisions affecting a child shall be subject to judicial review and modification.”

In other words, parties may agree to specific provisions concerning the support, care, custody and visitation of minor children but it will be up to a judge to decide if those provisions will be enforceable. For example, if a couple agrees that upon their divorce, any minor children born to the marriage will live with the father – and the father later turns out to be an abusive alcoholic who has repeatedly beaten the children and exposed them to inappropriate behaviors – a judge would be hard pressed to find that provision in the best interests (or safety) of the minor children.

When negotiating a premarital (prenuptial) agreement, it is advisable for both parties to consult with separate lawyers in order to have a full and complete understanding of their rights with respect to marriage and the premarital agreement. Often, one lawyer is retained to draft the agreement and the second lawyer is asked to review it with the other party. People often ask why I am unable to represent both parties when drafting such a document. Simply put, it presents a conflict of interest. Read my post: Why does it take two lawyers for a pre-nuptial agreement?

Pursuant to 46b-36c:

“[a] premarital agreement shall be in writing and signed by both parties. It shall be enforceable without consideration.”

The term “without consideration” means that neither party must pay anything to the other party nor exchange something of value in order for them to enter into a valid contract.

”A premarital agreement becomes effective upon marriage unless otherwise provided in the agreement.” [46b-36e] What if a couple signs a prenuptial agreement and after they are married, they decide they want to revoke it or make changes to it? Under 46b-36f:

“After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by the parties. The amended agreement or the revocation shall be enforceable without consideration.”

It is important for both parties to fully understand the provisions of a premarital agreement completely before it is signed. Prior to signing, each person’s assets and liabilities must be fully disclosed to the other. Section 46b-36g states:

“(a) A premarital agreement or amendment shall not be enforceable if the party against whom enforcement is sought proves that:

(1) Such party did not execute the agreement voluntarily; or

(2) The agreement was unconscionable when it was executed or when enforcement is sought; or

(3) Before execution of the agreement, such party was not provided a fair and reasonable disclosure of the amount, character and value of property, financial obligations and income of the other party; or

(4) Such party was not afforded a reasonable opportunity to consult with independent counsel.

(b) If a provision of a premarital agreement modifies or eliminates spousal support and such modification or elimination causes one party to the agreement to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid such eligibility.

(c) An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.”

If a marriage is deemed by a court to be void or voidable, “an agreement that would otherwise have been a premarital agreement shall be enforceable only to the extent necessary to avoid an inequitable result.” [46b-36h].

If you are contemplating marriage and believe that a prenuptial agreement may be important for you to consider, you should seek legal counsel well in advance of the wedding.

Why Does It Take Two Lawyers For a Pre-Nuptial Agreement?

Mar9

When couples are planning to marry and one party is contemplating asking the other to sign a Pre-Nuptial Agreement, I am often asked why I can’t represent both parties when I draft the agreement. The answer is simple: because each party has conflicting interests.

When one person enters into a marriage with another person, each acquires specific rights with respect to the martial property. In order to represent both parties, I would be obligated to advise party #1 that without a pre-nuptial agreement, his or her assets may be in jeopardy in the event of a divorce. At the same time, I would be obligated to advise party #2 that he or she may be entitled to some portion of those same assets if a pre-nup is not signed. This is a clear conflict.

Instead, an attorney will represent one party by drafting the prenuptial agreement. The second party should engage the services of an independent attorney to review the agreement and advise him or her of the legal ramifications of signing — or not signing — it.

The following is a link to an interesting post on the subject of pre-nups and post-nups courtesy of Estate Planning Bits blog:

Why You May Need a Prenuptial or Postnuptial Agreement