WASHINGTON — Same-sex couples who celebrated last month when the Supreme Court struck down the Defense of Marriage Act are waking up to a disorienting legal hangover as they try to assess the ruling’s effect on their personal finances.
Almost a month after the court’s June 26 decision, financial advisers and lawyers say it remains unclear how more than 1,100 federal laws tied to marital status — including about 200 separate tax code provisions — will apply to same-sex married couples who live in certain kinds of legal limbo.
Some, for example, were wed in a state that recognizes their union but live in another state that does not.
Others live in a state that allows only civil unions or domestic partnerships.
The lack of clarity extends beyond taxes to Social Security benefits, wills, insurance, bankruptcy law, divorce and retirement planning.
Mark Maxwell said his euphoria over the historic ruling has been tempered by his uncertainty about how the demise of DOMA will affect his family’s financial security.
“Unfortunately we are living in a state at this point where we are still second-class citizens,” said Maxwell, who lives in Winston-Salem, N.C., where a constitutional amendment bans gay marriage.
He and husband Timothy Young-Maxwell married in the District of Columbia, which allows same-sex marriage, but live in North Carolina, which does not. They have four sons, ages 13 to 24.
“If there’s a fear that we feel, it is simply the unknown of the policies that are out there,” Maxwell said.
“Right now the biggest thing at our ages — Tim is 50 this year and I’m 45 — is looking at things like survivor benefits. What happens if something happens to either one of us? What happens from the standpoint of our children? How does that impact our family? Will they be able to get benefits? Those are the kind of things I’m really thinking about.”
Now that the court has ruled, the confusion hinges on whether government agencies will use a “place of celebration” or a “state of residence” rule to determine which federal protections, programs and responsibilities apply to same-sex couples.
A “place of celebration” rule means that an agency treats same-sex spouses as married regardless of where they live, as long as they were married in a state where gay marriage is legal.
A “state of residence” rule means that an agency looks to a couple’s state of residence to determine their marital status.
The standard used differs from department to department, statute to statute.
A few agencies, such as the Department of Defense and the Office of Personnel Management, already have announced that they will use the place of celebration rule to grant military personnel and federal workers with same-sex spouses the same benefits as married straight couples, regardless of where they live.
Other agencies, such as the Internal Revenue Service and the Social Security Administration, have yet to clarify which rule they will use, leaving many same-sex couples unsure about how to file their federal tax returns or whether they qualify for Social Security spousal benefits.
“That’s just one piece of the problem of inequality for same-sex couples in this country, and that’s just one of the many ways that until we have marriage rights in all 50 states, this patchwork inequality is unacceptable,” said Susan Sommer, director of constitutional litigation for New York-based Lambda Legal.
Sommer said she hopes the Obama administration will have all the agencies follow a place of celebration standard as broadly as possible for same-sex married couples.
“If at the end of the day there are some areas that need a legislative fix, then that is what should happen,” she said.
A bill pending in the Senate, the Respect for Marriage Act, would require all federal agencies to use the place of celebration rule.
Filed by Democratic Sens. Jerrold Nadler of New York and Dianne Feinstein of California, the legislation faces an uphill battle in a bitterly divided Congress and seems unlikely to become law any time soon.
For same-sex couples fortunate enough to live in states that do recognize their marriages, the Supreme Court ruling exempts them from paying gift or estate taxes on transfers of money or assets between spouses.
They can roll over each other’s IRAs and name each other beneficiaries of qualified plan assets.
They also can file jointly for bankruptcy, which tends to be cheaper because two people can go through one process with one lawyer and can address debts and creditors collectively.
In the case of divorce, same-sex spouses will be able to deduct alimony from their federal tax returns and split a 401K or IRA without paying hefty penalties.
But equal treatment under federal law may actually wind up costing money in some cases.
One spouse may lose eligibility for means-tested programs like Supplemental Security Income or Medicaid after the other spouse adds his or her assets and income to the equation.
Wealthier couples may end up owing more in taxes when they file their returns as married.
Children of same-sex parents may qualify for less federal financial aid for college.
“There’s going to be some losers and some gainers, but we never did this so that same-sex couples would be winners (and) not losers,” said Bruce Bell, legal infoline manager for Gay & Lesbian Advocates & Defenders in Boston.
“We did it so that same-sex couples could be treated by the same rules as every other couple. That’s why the term that’s used everywhere is marriage equality. That’s all that means.”