According to a senior financial planner at Wilmington Trust, when the Supreme Court ruled the Defense of Marriage Act unconstitutional, it created many benefits for same-sex couples. Because of the Supreme Court ruling, the federal government is required to recognize same-sex marriages for those who reside in states where such marriages are legal and provide the same benefits, which Florida is not one of. This means that same-sex married couples can derive benefits from many estate planning and tax strategies previously available for married couples of the opposite sex.
The IRS recognizes that same-sex couples, no matter where they reside, can now give property to a spouse upon death or during life without having to pay federal estate taxes by taking advantage of unlimited marital deduction. In addition, portability allows them to defer estate taxes until the surviving spouse dies, allowing that spouse to enjoy the benefits of the deceased spouse’s estate and gift tax exemption in addition to their own exemptions.
Same-sex couples should modify their estate plan if they wish to derive any benefit from the DOMA decision, financial experts say. It is important for same-sex couples to ensure that their plans are effective and comprehensive, and they should make sure that their financial advisers are carefully monitoring those plans, as the laws involving same-sex marriage are quickly changing.
Since the Supreme Court’s ruling on DOMA, many same-sex couples have been able to explore estate planning options, which had previously been unavailable to them. Those wishing to prepare wills, trusts, health care directives or any other documents may benefit from speaking with an estate planning attorney who may be able to provide viable planning options.
Source: Financial Advisor, “Estate Planners Decipher Impact Of DOMA Ruling“, Michael Fischer, September 27, 2013