Neiman says she had a lesbian couple as clients, where one woman was a stay-at-home mother and the other was the income earner. When the two decided to separate, they hammered out a divorce agreement that involved alimony and child support. But before signing it, one of the women called Neiman to make sure it was the right thing to do. Neiman explained to her the financial implications of signing the agreement, and the fact that she would be taxed on her alimony and child support payments. The woman decided not to sign the agreement, and the couple have now opted to separate rather than divorce.

"They got married in 2004, and they did not even think about what might happen if they divorced," Neiman says.

In fact Julie and Hillary Goodridge, lead plaintiffs in the state's landmark gay marriage case, decided to call it quits in July 2006 after two years of marriage, though they, too, opted for separation rather than divorce. Perhaps Julie Goodridge, president of an investment advisory firm, NorthStar Asset Management, and Hillary Goodridge, program director for the Unitarian Universalist Funding Program, realized divorce was far too costly and complicated.

"There's been so much focus on gay marriage, but no one's focused on what happens with gay divorce. And with the divorce rate at 50%, it will happen," Neiman says.

While savvy financial planners can concoct creative loan arrangements so that alimony or other asset transfers are not viewed as gifts-when there's a child, assets can be transferred as extra child support. But the better option, planners say, is for the couple to plan for divorce at the outset.
They can set up a family limited partnership, for instance, in which shares are transferred from one partner to the other. Or if one partner has a lot more wealth than the other, the rich partner could begin funding a second home for the poorer partner early on. That way, if the couple separates and the courts call for an equitable distribution of assets, one partner has already begun accumulating some of the other partner's wealth. The point is, by transferring the assets from one partner to another slowly over time, at a rate that falls below the $12,000 gift limit, the transfer occurs without setting off a taxable event.

Attorney Hertz says he can't emphasize enough the importance of gay couples equalizing their assets early on. Imagine that two men, Bill and Steve, decide to register as domestic partners in California, or have a civil union in New Jersey, and 10 years later, they divorce. Steve would be entitled to a big chunk of Bill's money, Hertz says. But if the couple had planned for it, Bill could have bought a duplex in Steve's name and let that asset grow over time. That way, when the assets are divvied up during the divorce proceedings, there's already some property in Steve's name, a piece of property that may have cost $250,000 to buy 10 years ago but is now worth $1 million, Hertz says.

But Hertz thinks the tax issue is just one reason gay couples need to begin talking about divorce. The other reason is that they need to get more educated-about the financial obligations of a marriage-so that they can understand the financial obligations of a divorce.

The straight community seems to have a better grasp of that, Hertz says. Maybe they've been through a divorce, or their friend went through one. Straight couples understand that if you break up, you may have to pay alimony. And worse, if one person has debts, their partner may now be subject to them. Gay couples have no such understanding, Hertz says.

"So when a gay couple gets divorced, there's a kind of shock that I witness a lot," Hertz says. "They say, 'What do you mean that's half his?' "
Part of the reason is that gay couples are not always as financial intertwined as their heterosexual counterparts, Hertz says. He suggests that if one were to talk to a random 25 straight couples, a very high percentage of them will have pooled their money, have joint accounts, make joint financial decisions. They function as a couple, or a family, which is what the marital laws impose on them. But if one talked to similarly situated gay couples, one would find a much higher degree of financial autonomy, Hertz says.

That's not to say gay couples are immune to forking over assets prior to gay marriage. People have been suing each other in civil courts for what they believe is rightfully theirs for as long as courts have existed. But for the most part, if the party suing had no documentation to back up their claim, they usually lost.