Spellman’s case is believed to be the first to assert that common law marriage should exist for same-sex couples just as marriage by license does, and that such marriages established in one jurisdiction should be seen as valid in every other state, as it is for heterosexual couples. But the legal landscape then was unclear. Several states had banned same-sex marriage and didn’t recognize marriages established in other states. Further, federal law only recognized marriages between a man and a woman. While cases were moving to the U.S. Supreme Court for consideration to establish marriage as a constitutional right, it was unclear how the court would rule given its ideological split.
“Every expert I spoke to said I was right, but litigating common law marriage is a daunting process,” says Spellman. “It’s costly and decisions are made on the quirkiest of things, which can easily cost you your case.” Common law marriage can only be established in eight states. All states and D.C., however, will recognize a valid common law marriage established in another jurisdiction. But proving a common law marriage has been established can be challenging since case law is often sparse and even contradictory.
But beyond the court battles, the case of Spellman and Kelly underscores how important it is for advisors to ensure that client couples without a valid marriage license—whether they be same-sex or not—have updated their wills to reflect how they want their estates to be dispursed to their partners.
Spellman’s attorney in Delaware, Chuck Durant, a partner with Connolly Gallagher, warns that relying on common law marriage to protect surviving spouses can lead to contention and challenges, particularly when significant assets are involved. “This is why it’s so critical to document your current relationship status. Paper is so much cheaper than lawsuits,” he adds.
Whether or not a couple is married can greatly impact their financial and tax outcomes, says Steve Branton, an investment advisor who works with same-sex couples at Mosaic Capital Partners in San Francisco. “We really focus pointing out red flags on how assets are titled and how they’ll pass at death,” Branton says. “For instance, I have a couple who owns an apartment building in the pricey Castro neighborhood here who didn’t want to get married. I showed them how the building would be reassessed with a $20,000 tax increase if one of them died. There’s no reassessment for married couples.They got married the next month,” he says. He also underscores for clients how surviving unmarried partners are not entitled to their partner’s defined benefit retirement plan assets unless designated as a beneficiary and won’t get a survivor’s benefit from their partner’s Social Security at all.
Kate Fries, a partner at The Family Firm in Bethesda, Md., says they work hard to create legal benefits for unmarried couples using careful documentation, even going with clients to their estate attorney meetings to paint a comprehensive financial picture. “We’ve also started streamlining the estate and legal process by using payable-upon-death forms for real estate, banking, checking and investment accounts, so assets pass directly to a beneficiary,” Fries says. A growing number of financial professionals are using PODs instead of revocable living trusts, depending on the complexity of clients’ estate and tax needs.
“Love is blind, until there are dollar signs,” adds David Goldstein, the founder of Kalorama Wealth Strategies in Washington, D.C., who advises the use of prenuptial and postnuptial agreements for couples without a marriage license. “We really emphasize the importance of updating beneficiary forms and creating documents that define the relationship and where assets should go upon demise or dissolution.”
Today, life for Spellman, who’s happy to put the bruising legal battle in the rearview window, is all about work, learning and leisure. He’s planning the same trip to London and Paris he took with his husband every January. Then it’s on to help teach a financial fraud class at the Yale School of Management in spring. He’s enjoying the beach house he bought in Rehoboth the summer after his husband died. He says the simple catchphrase that got him through many legal and emotional hurdles is the one he still relies on today: “Onward.”