11
Nov

IRS State of Celebration Guidance for LBGT Couples

The IRS announced that, beginning with the 2014 tax filing season, they will use a “state of celebration” standard for recognizing marriages. Consequently, any couple possessing a marriage license from any U.S. state may file a joint tax return. This standard is in contrast to a “state of residency” standard, in which federal joint filing would be permitted only by residents of states that recognize the marriage as valid.

A “state of celebration” standard is broader, affecting even same sex couples who have obtained a marriage certificate but currently live in a state that does not recognize their marriage as valid. The administration asserts that “state of celebration” is in line with private industry practice, which provides benefits to any emoter that can demonstrate they are married regardless of where they live. Many will cheer the result which resolves federal tax ambiguity for same sex couples in the 13 states and the District of Columbia that recognize the marriage.

Domestic partnership agreements involve a wide variety of circumstances.
Amendments to the Texas Constitution, evolving states, recent case law, and improved draftsmanship now make such agreements enforceable under contract law.

The marital agreement is considered to be a contract under Texas Law. The premarital agreement must be in writing and signed by both parties. No actual consideration is required; however, to conform with contractual law, it may be wise to provide benefits for the non monied party to avoid a later finding of unconscionability, particularly if the financial condition of the non monied party under the agreement will be poor.

Matters that may be dealt with in a premarital agreement include, but are not limited to, the following:

1. The right to buy, sell, use, transfer, exchange, abandon, lease, costume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property.

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

3. The disposition of property on separation, marital dissolution, death, or the occurrence or nonoccurence of any other event.

4. The modification of spousal support

5. The making of a will, trust, or other arrangement to carry the provisions of the agreement

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

7. The choice of law governing the construction of the agreement; and

8. Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty

Cohabitation, domestic partnership, premarital and post marital agreements may be creative as a party determines necessary. However, care must be given to see that such agreements protect the party, keep with public policy, and adhere to current Texas family law and applicable contractual law.