The estate consequences of same-sex relationships
Bermudians who have entered into same-sex marriages, or civil unions/partnerships, in jurisdictions where those legal arrangements are permitted should be aware that such arrangements will likely not be recognised in Bermuda — and that will have an impact on their estate planning.
To date, no same-sex couples — whether married or in a civil union/partnership — have applied to the Supreme Court of Bermuda for recognition of their legal status as a 'married' couple. However, since neither our Constitution nor the Human Rights Act presently provides for protection under the law in respect of one's sexual orientation, it would be very unlikely that a petition to the Supreme Court for recognition of a same-sex couple's foreign marriage would be successful.
A recent case in the United Kingdom underlined the challenges faced by same-sex couples who live in a jurisdiction that does not recognise their 'married' status. There, the UK court refused to recognise a foreign same-sex marriage of a British domiciled couple on the basis that there was insufficient discrimination for the court to intervene.
The British same-sex couple entered into a lawful marriage in a foreign jurisdiction and their relationship was regarded in English law as a civil partnership, but not as a marriage. The UK court's decision was based on the premise that the UK law's discriminatory treatment of recognising foreign marriages of opposite-sex couples, but not the marriage of same-sex couples, was legitimate and proportionate because the UK law accorded same-sex couples formal recognition under its Civil Partnership Act 2004 that had all the features and characteristics of marriage while preserving and supporting the concept and institution of marriage as a union between persons of the opposite sex.
This, the UK court claimed, removed the legal, social and economic disadvantages suffered by same-sex couples who wished to join in stable long-term relationships and therefore did not constitute a breach of the British same-sex couple's rights under the European Convention on Human Rights (“the Convention”).
Although the Convention was applied to Bermuda by the UK after it signed the Convention, no domestic legislation has been passed to specifically implement the Convention in Bermuda. Therefore, it does not have the force of law to be applied by the Bermuda courts.
Accordingly, as Bermuda law presently stands, same-sex couples who have 'married' abroad or entered into a civil union or partnership will find themselves in the same legal position as common law opposite-sex spouses, as such unions are also not recognised in Bermuda.
The conflict of laws, where what is legal abroad is not permitted in Bermuda, can have wide-ranging implications for estate planning and succession purposes. Those difficulties can only be overcome by same-sex couples by entering into formal arrangements such as jointly purchasing their home and preparing powers of attorney and wills to govern their respective legal positions before and on death.
For example, same-sex couples who enter into foreign marriages should be alert to the conflict of laws where their Bermuda will may be automatically revoked by the laws of the foreign jurisdiction upon marriage — but revocation will not take place under Bermuda law because the same-sex 'marriage' is not permitted and, therefore, not recognised here.
In such a case, a will validly made in Bermuda before the same-sex couple's marriage will be valid in Bermuda, but not necessarily in the foreign jurisdiction where they entered into their marriage. This will depend upon whether the jurisdiction is a civil or common law jurisdiction, and also upon the domicile of each party to the civil union.
Should there be property in any foreign jurisdiction belonging to either or both members of the same-sex Bermuda couple, then on entering into a foreign same-sex marriage, fresh wills should be made in Bermuda or other appropriate action taken to preserve their legal positions both in Bermuda and in any foreign jurisdiction where they own real property or personal assets, at least until such time as the existing conflict of laws is resolved.
Other 'conflicts or law' may arise concerning the interpretation of wills and estate stamp duty on probate.
Under Bermuda law, when an opposite-sex couple divorces elsewhere or in Bermuda — and then one of the parties dies — the surviving former spouse is deemed to have died on the date of the foreign or local divorce court's decree, which dissolves or annuls the marriage. The result is that any gift in favour of the divorced spouse fails, unless a contrary intention is specifically addressed in the deceased's will. This will not be the case in a same-sex divorce as it will not be recognised under Bermuda law and the divorced 'spouse' continues to benefit under the will.
A more striking example will be that the surviving spouse's exemption from estate stamp (ie death) duties will not be allowed by the Registrar of the Supreme Court, if the foreign marriage of a same-sex couple is not recognised in Bermuda.
More examples could be cited, but the point is clear — same-sex couples who have entered into a marriage, or civil union or partnership, should take care to protect their rights, and the rights of surviving 'spouses', by speaking to a lawyer in Bermuda who is expert in the area.
Attorney Michael Mello QC is counsel with the Private Client and Trusts Practice Group at Appleby (Bermuda) Limited. A copy of Mr Mello's column can be obtained on the Appleby website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.