The recent legalization of same-sex marriage in all states has had a significant impact on estate planning for same-sex couples. This is an exciting time for same-sex couples in that marriage offers some very significant estate planning benefits to high-net-worth same-sex couples. The Supreme Court’s 2013 decision extended all of the spousal benefits in federal estate tax law to same-sex married couples. As a result, a surviving same-sex spouse is able to inherit his or her spouse’s entire estate without paying estate or gift taxes. They can also take advantage of estate tax “portability”, where a surviving spouse retains any unused amount of the other spouse’s estate tax exemption. Same-sex couples can now also give up to $28,000.00 a year to anyone they choose without triggering gift taxes. In addition, same-sex couples that live in states that once banned same-sex marriage can now pass their estates to the surviving spouse without any state estate taxes just like they can for federal estate tax purposes.
The legal recognition of a same-sex couple’s marriage not only impacts their estate plan, but their taxes, collection of social security survivor benefits on the passing of the first spouse receiving social security, rights to benefits and retirement savings under the ERISA and tax laws that govern qualified retirement plans such as 401K plans and IRAs, and end of life care and decision making.
With the picture for same-sex marriage having changed drastically with the recent decision of the Supreme Court, same-sex marriage now enjoys the same status, nationwide, as any other marriage. Same-sex couples now have many choices and should meet with an estate planning attorney as well as their wealth and tax advisors about what a legally recognized marital status can mean for them. Florida residents should also consult their estate planning and real estate attorney regarding the spousal benefits associated with Florida’s Homestead laws.
By Jennifer D. Peshke, Esq.