Slip Knots - Alternatives to Marriage

You don't have to be gay to understand the frustration committed same-sex partners have with not being able to be recognized as a legal couple through marriage.

As the saying goes, be careful what you wish for. You might get it.

First, in legal terms, marriage is an unconscionable contract. Over 50% now end in divorce. The split up rate for gay and lesbian partners is even higher. If less than half work out, why do we need marriage at all?

The marriage contract is a three-party contract - husband, wife, and state. The state holds all the cards. The state determines who can and cannot marry, and decides if and under what terms the marriage can be dissolved.

What I suggest for couples or groups who cannot legally marry is to construct their own relationships using LLCs to define those relationships according to their own desires. An LLC cannot be set up to circumvent state laws or to legitimize an illegal sexual arrangement, but many other aspects of traditional marriage such as joint ownership of property and health insurance can be addressed quite nicely by the LLC.

For example, if the LLC provides health coverage for the members, and the relationship breaks up, the LLC will continue to insure the individual members. When a divorce takes place, if the insurance was in one spouse's name at work, the ex-spouse will likely lose his or her insurance.

Joint property via an LLC is an even better proposition. Membership can be apportioned according to the contributions each made to the LLC. If the relationship dissolves, you still retain your ownership percentage through the LLC instead of having a family court judge divide the property according to how the court wants to apportion it.

An LLC lets you control the "divorce", and works better than a prenuptial or post nuptial agreement, which can be modified or ignored by the court.

Prenuptial agreements are flawed in regard to children. For traditional couples, a prenuptial cannot contract away the rights of the unborn. The one thing all states will do is bend the divorce decree to favor the payment of child support, no matter what the financial situation of the parents. The state, quite simply, does not want to pick up the welfare tab for your failed marriage.

An LLC can include children as members. Children can have their own say in family/LLC affairs. Assets such as the family home can remain in the LLC and survive the breakup of the marriage.

And finally, husbands and wives destroy each other's credit all the time. Members in an LLC are treated like partners for tax purposes, and their percentages of the profits pass through to their individual tax returns, while members retain the limited liability protection of a corporation.

Members of the LLC are not individually liable for the debts of the LLC, and they are not liable for the debts of other members. One LLC member cannot ruin the credit of another, as husband and wife can.

For gay and lesbian couples, plural "marriages", and other unconventional relationships, keep the state out of your affairs with an LLC. Instead of tying the knot, use a slip knot to have the relationship you desire, plus the ability to change that relationship without the permission of the nanny state.

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Charles Lamm is a retired attorney who owns Trustee and RA Services Inc. in Coral Springs, Florida. He recommends asset protection for all using a no-asset corporation, LLC, and beneficiary controlled trust. Read more at: http://www.corp-llc-bct.com.