For many years, same-sex couples have had a difficult time managing joint accounts and taking care of estate tax and other tax issues. The recent U.S. Supreme Court ruling overturning the Defense of Marriage Act (DOMA) is expected to make it easier for married same-sex couples in Florida and around the country to handle their tax needs, as well as take advantage of many other estate planning options.
Previously, same-sex couples had to pay federal estate taxes if their assets went over the tax-free amount. When one woman’s partner of 44 years passed away in 2009, she was forced to pay $363,053 in federal estate tax. She later filed a lawsuit in New York. The District Court ruled in her favor and ordered the money to be refunded to her. With the end of DOMA, many tax laws will become available to same-sex couples.
In Florida, where same-sex marriage is not recognized, estate concerns will go on much the same as before. Our state has no estate tax, but for same-sex couples with assets worth more than the federal exemption of $5.25 million per married person, same-sex couples can now enjoy the same tax benefits.
Other possible estate planning benefits include portability, gift-splitting, and company retirement plans. Since the law change is so new, same-sex couples should consult with an estate planning attorney to be sure any of these options are available in their state, as well as any other plans, inheritance, gifting, and will options they can take advantage of.
Source: Forbes, “How The Supreme Court Decision Will Change Estate Planning For Same-Sex Spouses,” Deborah L. Jacobs, June 26, 2013