Gay Marriage Inc.: same-sex couples who want to form a corporation to get financial benefits should think twice before trying the risky maneuver.

On the surface it seems like a good idea. Gay couples want legal benefits--and can't get married--so they consider forming a limited liability corporation, or LLC.

By doing so, the relationship becomes recognized by federal, state, and local governments as a legal partnership. Assets are co-owned and there is a set legal precedent regarding disagreements, sales, and other shared responsibilities.

The trend toward gay couples rotating LLCs has been more talk than action, however. Many are intimidated by the legalese and financial acumen necessary to successfully form one. And even the experts discover it makes more sense to go a more traditional planning route.

"It seemed like a fancy, cool way to get around (the lack of marriage recognition) by forming a single economic unit," says Dana Levit, CFP, principal of Paragon Financial Advisors in Boston. Levit considered the process for herself and her partner, Leslie Smith, but decided against it. "In the end it looked like there might be so many complications that it might not solve anything," Levit says.

For starters, opening an LLC can cost upward of $1,000. Thereafter, owners must pay an annual renewal along with the standard legal fees if any problems crop up along the way.

The transfer of property has to pass a legal challenge if questioned by relatives or any other interested party. So, despite the protections, those with LLCs may end up defending their interests in court anyway.

Jennifer Hatch, managing partner of Christopher Street Financial in New York City, says she has seen clients express interest in the LLC option. But the only ones who have taken action on it have legitimate business interests.

"They tend to own a business anyway, so it makes more sense for them," she says. "For most people, you can do the same things with normal estate planning."

Gay couples still have the rights of any two individuals to enter into contracts, wills, and other legal agreements to simulate the rights of marriage.

The most important thing to think about is real estate. If you own property prior to moving in with someone else, it's important to put who owns what into writing. If you share the mortgage or down payment, make sure to document that. And keep receipts to prove it to the Internal Revenue Service.

Insurance can also play a major role in protecting your relationship. If your partner dies and you can't afford the house payments without his or her income, there is a strong chance you will lose your home. And, the government won't allow same-sex couples to inherit property as a spouse would--unless the tenants live in a community with survivor's rights. A partner either needs to buy it outright from the estate or pay inheritance taxes if the property is willed to them.

It is doubly important for same-sex couples to make out wills, experts say. Otherwise, the nearest blood relative has more rights than a surviving partner.

"It's important to put these details into a legal contract that is subject to existing contract law," Hatch says. "That way, there is an existing process you can use to protect your assets."

"We're not married, but we have essentially set up a divorce law [an inheritance process] by creating a partnership agreement that dictates how assets will be split up," Levit says. "It's contract law, and depending on where you live, pretty much anyone can have this done."

Married, but not to the IRS 

There are rules specifically for gay couples legally married by the state of Massachusetts. They may file as married on their state and local returns but must file as individuals on their federal returns. This is in accordance with the Defense of Marriage Act of 1996, which prevents the federal government from recognizing same-sex couples.

State and local forms in Massachusetts are heavily dependent on the federal return. Thus, to properly file, married gay couples should create a "dummy" federal form, as if they were filing jointly on their federal return, for use as a worksheet.

And Massachusetts gay couples should also remember: It's not a good idea to make a political statement for equality by filing your federal income tax jointly. Boston gay rights group Gay and Lesbian Advocates and Defenders, which brought the original gay marriage case before the state supreme court, recommends filing separately. If not, you might find yourself in hot water with the IRS.