How Has Estate Planning for Same-Sex Couples Changed?

My office has received many questions about same-sex estate planning in the past few months and wanted to address some of them.
Last year the Supreme Court in Obergefell v. Hodges, 135 S.Ct. 2584 (2015), ruled that same-sex couples could get married in every state. At the time of the Obergefell ruling, thirty-seven states, already recognized same-sex marriage. Only thirteen states had bans on same-sex marriage, which are now unconstitutional. Obergefell relieved many challenges and inconsistencies between the state and federal laws, including, estate and tax planning for same-sex couples. Some of the resolved issues include the following:
Intestate Share – For example, the surviving spouse may now take their statutory share of the estate, which is the same as the intestate share that the decedent’s spouse would receive under the California Probate Code.

Inheritance Tax and Other Taxes – Spouses now have the ability to transfer money and property to spouse during life and after death without tax consequences.

Estate Tax Portability – Deceased Spousal Unused Exclusion raises the amount excluded from estate tax of a married couple’s estate to $10.9 million, as opposed to 5.45 million for an individual.

Tax Credits – There are possible tax credits for children of same-sex spouses.
The IRS issued changes in 2013 prior to the Obergefell decision due too the fact that federal agencies had to deal with the inconsistency in state laws and set guidance on how they would determine whether an individual and their spouse were legally married. IRS issued Revenue Ruling 2013-17, which declares that federal rights and benefits for all tax matters are available to same-sex married couples.

What does all of this mean to you for you and your family?

1. Do I need a Trust or a Will?

Yes. In order to ensure that your assets are distributed to your spouse, children or the persons that are important too you; your intent needs to be stated on a legal document. An estate plan will ensure that your children have guardians and your loved ones do not have to deal with complications due to an emergency or incapacity.

2. What About Incapacity?

A complete estate plan will include incapacity documents, such as, a durable power of attorney finances and an advanced health care directive for medical decisions. Unfortunately, the fact of being a spouse alone will not allow them to deal with financial institutions or hospitals over their spouse’s affairs.

Coastal Pacific Law attorneys are experienced in estate and business planning, and can help with your estate plan. To schedule a complimentary consultation, call (619)786-6563.

Posted from San Diego, California, United States.