Same sex marriages are still not legal – A look at the financial rights of LGBTQ couples

• Two partners can open a joint account as long as they have the necessary documentation in place.
• The absence of legal recognition for same-sex marriages in the country renders joint applications for LGBTQ couples impossible.
• The separation and death of the partner will not confer any special rights on any of the partners.

In a recent verdict, the Supreme Court refused to give legal recognition to same sex marriages and asked the Parliament to look into the Special Marriage Act regarding this. However, the apex court did instruct the Union, state and UT governments to ensure that the community is not discriminated against. This brings up the question about the financial rights of LGBTQ couples.

As these couples grapple with legal and societal hurdles, comprehending and securing their financial rights has become a priority. We take a look into the legal and financial aspects of LGBTQ couples.

Opening a joint bank account

There is no bar for opening joint accounts. “Any two individuals can open a joint account together, regardless of their relationship status. Most banks will also allow you to open FDs jointly,” says Adhil Shetty, CEO, BankBazaar, a financial marketplace.

Hence, two partners can open a joint account as long as they have the necessary documentation in place, as RBI does not discriminate in terms of gender when it comes to opening and operating accounts.

Joint home and car loans

You cannot apply for a home loan jointly. “If one wants to apply for a home loan jointly, one of the mandatory requirements is proof of relationship – which is to be provided irrespective of the joint applicant being a partner, a parent, a child, or siblings. In the case of a couple, a marriage certificate is required,” says Anny Ghosh, Senior Consultant, Alpha Capital, a wealth management firm.

Basically, the absence of legal recognition for same-sex marriages in the country renders joint applications for LGBTQ couples impossible.

“Many banks and financial institutions are working on putting policies in place, but the progress is slow in the absence of clear directives from the regulatory and legal bodies,” says Shetty.

Not just for home loans, this is applicable to any loan to be taken jointly.

Financial implications of adopting children

The law does not prohibit adoption based on sexual orientation. “However, LGBTQ members will be able to adopt as a couple if same-sex union gets legalised in India as live-in couples are not yet permitted to adopt a child in the country, " says Ghosh.

Therefore, any child adopted by them will be the child of either of them who is recognised as the adopting parent.

“This effectively means that for the purposes of inheritance and succession, the child will be recognized as the child of only one of them. The other partner will have to perforce confer the benefits of inheritance on the child through will,” says Mani Gupta, partner, Sarthak Advocates & Solicitor, a full service law firm.

Financial implications of separation and death

The separation and death of the partner will not confer any special rights on any of the partners. “This means that the surviving partner in case of death will not get any inheritance benefits unless such benefit has been conferred through will,” says Gupta.

Upon separation, none of the partners will be entitled to maintenance or alimony from the other. Retirement and pensionary benefits of one will not flow to the other partner.

Inheritance and property rights

The judgement effectively maintains the status quo on the inheritance and property rights. “This means that LGBTQ couples would not be able to claim to be spouses of each other, and therefore, would normally not be able to claim benefits of intestate succession (i.e. on account of death without a will),” says Gupta.

The couple may, however, confer the benefits of inheritance by inheritance through a will.