There has been a lot of discussion in the Supreme Court that whether even if it decides to grant marriage rights to same-sex couples, it will refrain from determining consequential rights including adoption, succession and inheritance as these are inseparably linked to religion based personal laws.
On the fourth day of hearing of petitions by LGBTQA+ community members and social workers demanding right to marriage as a naturally occurring corollary to the discrimination of gay sex, the constitutional bench of the Supreme court headed by D.Y. Chandrachud offered a reality check to them by pointing out that nearly three dozen laws governed various rights accruing to spouses from marriages. The Bench said that “the canvas covered by the petitioners demanding marriage rights for same-sex couples does fall in the domain of the Parliament.”
While it is true that as of now, even considering the ongoing case will result in the legalisation of same-sex marriage, the various laws to be changed especially the succession and inheritance laws will take quite some time to be framed/modified. However, we cannot help but discuss the ways they would get affected along with the said legalisation’s effect on the banking and insurance industry.
Effect on succession laws and inheritance
In India, the denial of formal marriage rights to same-sex couples affects succession and inheritance laws. The legal framework for succession and inheritance in India is primarily governed by personal laws based on an individual's religion.
● Hindu Succession Act (HAS): The Hindu Succession Act, which applies to Hindus, Buddhists, Sikhs, and Jains, does not recognise same-sex marriages. As a result, same-sex spouses may not have automatic inheritance rights as legally recognised spouses would.
● Other Personal Laws: For individuals belonging to other religious communities, such as Muslims, Christians, and Parsis, the personal laws specific to those communities also do not recognise same-sex marriages. Consequently, same-sex couples may face challenges when it comes to inheritance rights under these personal laws.
Despite a few anomalies, succession for same-sex unions can be navigated with relative ease within the existing succession law and doctrine. The joint family property institution has been weakened by legislative change and judicial decisions, and a risk of judicial interference must not be a consideration.
The court, while holding same-sex marriage permissible under the Special Marriage Act, 1954 (SMA), must declare that the succession shall be governed by the Indian Succession Act, 1925 (ISA) for interfaith and non-Hindu same-sex unions, and under the Hindu Succession Act, 1956 (HAS) for Hindu same-sex unions. In making this declaration, it must hold that a gender-neutral construction of the terms “widow” and “widower” be done, undermining the gendered character of property undergirding the succession regime.
In the Arun Kumar vs Inspector General case, the court found that one’s gender self-identification would determine their status as “male” or “female” for the purposes of the order of succession. A transgender woman may be regarded as “female”, and a transgender man as “male” for determining the applicable order of succession. While this resolution is unsatisfactory due to its reduction of diverse identities into the gender binary, its purpose is to demonstrate the court’s ability to secure sufficient equality using its gender-neutral interpretive framework.
Muslims are governed by their personal law, which is Shariat for the purpose of succession. However, just like Hindus, Muslims also recognise male and females as subject matters of inheritance and this can be clearly understood from the terms used in the list of sharers. But for the purposes for same sex marriage, the above interpretation of the ISA would suffice.
Financial issues, banking and insurance
If a future legalisation of same-sex marriage occurs, there would be multiple positive results for the financial sector and social policy. Right to jointly own property, right to nominate each other in bank accounts, fill nomination forms at the workplace with names of your partner and nominate your partner in your mutual funds and insurance policies are some of the things that will become possible for LGBTQ couples. At present, LGBTQ partners cannot inherit properties. LGBTQ parties will be able to jointly adopt children if marriage rights are granted. They will get recognition and social acceptance, thereby providing essential conjugal rights as well. It will also provide them with much-needed financial rights and privileges.
1. Insurance Benefits: Legal recognition of same-sex marriage would provide same-sex married couples with equal access to insurance benefits, similar to opposite-sex married couples. This would include:
● Health Insurance: Same-sex spouses could be included in their partner's employer-provided health insurance plans, allowing them to access the same coverage and benefits as opposite-sex spouses. This would provide them with financial protection and better healthcare access.
● Life Insurance: Same-sex married couples would have the ability to name each other as beneficiaries in life insurance policies. In the event of the death of one spouse, the other spouse would be entitled to the insurance proceeds, ensuring financial security for the surviving partner.
● Other Insurance Benefits: Same-sex married couples would be eligible for various insurance benefits available to married couples, such as survivor benefits, disability benefits, and spousal retirement benefits. These benefits would provide financial support and security to same-sex spouses in times of need.
2. Joint Accounts: Legalising same-sex marriage would grant same-sex couples the ability to open joint bank accounts. Joint accounts would enable them to manage their finances together, share expenses and have equal access to funds. This would simplify financial management for same-sex married couples and promote financial stability within their relationships.
3. Loans and Mortgages: Same-sex married couples would have equal access to loans and mortgages, just like opposite-sex married couples. They would be able to jointly apply for loans and mortgages, making it easier for them to secure financing for various purposes, such as purchasing a home or starting a business. This would remove any discriminatory barriers and provide same-sex couples with equal opportunities for financial growth and stability.
4. Estate Planning and Inheritance: Legal recognition of same-sex marriage would have a profound impact on estate planning and inheritance rights for same-sex couples. They would be able to:
● Create Wills: Same-sex married couples would have the legal authority to create wills, ensuring that their assets are distributed according to their wishes. They could specify their spouse as the primary beneficiary, guaranteeing that their partner is financially protected.
● Inheritance Rights: Same-sex spouses would have automatic inheritance rights in the absence of a will, just like opposite-sex spouses. This would prevent any disputes over inheritance and ensure that same-sex partners receive their rightful share of the deceased spouse's assets.
5. Tax Benefits: Legalising same-sex marriage would extend tax benefits to same-sex married couples. They would be eligible for tax deductions, exemptions, and credits available to married couples. This would result in potential tax savings and a fairer tax system for same-sex couples, promoting financial equality.
6. Financial Power of Attorney: Same-sex married couples would have the ability to appoint each other as financial power of attorney. This legal authority would allow them to make financial decisions on behalf of their spouse, ensuring that their partner's interests are protected in cases of incapacitation or inability to make financial decisions.
(Ishanee Sharma is an advocate and founder of Ishanee Sharma Law Offices.)