Tax and estate planning tips for married same-sex couples


With the recent Supreme Court ruling making headlines for allowing same-sex couples to get married, the unnoticed effect of this monumental ruling is how it will affect the estate planning for couples that can now tie the knot. Same-sex married couples now have the same estate planning and tax benefits others couples have been enjoying for years. Now is a great time to update your estate plan to take advantage of all new benefits available.

Supreme Court Justice Kennedy wrote in his now famous opinion that same-sex couples are no longer “cosigned to an instability, many opposite-sex couples would deem intolerable in their own lives.” Before this decision 36 states had already recognized these marriages, but now the other 13 mostly southern states must follow.   This means same-sex couples that live and marry in these states should consider updating or creating estate plans that take advantage of their new legal status.

There are many tax planning laws, same-sex couples should consider. We recommend clients analyze prior federal and state income tax returns to determine if there is a positive financial result by amending prior returns when considering the costs. Couples should also consider the impact of the change in adjusted gross income limitations, which could prevent a same-sex married couple from making Roth IRA contributions or receiving tax deductions.

Same-sex couples should also look at their current federal and state income tax planning opportunities to ensure there is enough tax withholding done to mitigate tax-withholding penalties. This may require updating 2015 Form W-4 with the employer to decrease the number of personal allowances and/or withhold an additional amount from each paycheck. This means these couples should now analyze Roth conversion strategies, financial aid assistance for children going to college, HSA contributions and employee benefit programs to determine the most tax efficient strategy to achieve the stated goals and objectives.

There are also some estate planning opportunities for same-sex couples such as the spousal elective share, which provides a surviving spouse with the right to receive a fraction of the deceased spouse’s probate estate in “separate” property states like Florida. Prior year wealth transfer to a surviving spouse in states that have an estate tax or inheritance tax, such as Tennessee, may result in a refund. Asset titling and beneficiary designation coordination within the updated estate plan that is reflective of current law will be paramount.

Same-sex married couples may now even have child custody rights, hospital visitation rights, adoption rights and access to a spouse’s birth certificate and death certificate. To learn more ways a same-sex couple can update their estate plan, contact the Law Office of David M. Goldman PLLC today at 904-685-1200.

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