Same-Sex Marriage Is Legal. How Does That Effect Your Estate Plan?

Over the past two decades, the U.S. law has changed dramatically on the stance of same-sex marriage.

With the Supreme Court's ruling last week requiring all states to perform and recognize same-sex marriages, same-sex married couples are no longer "consigned to an instability many opposite-sex couples would deem intolerable in their own lives," as Justice Anthony Kennedy wrote. The decision provides security and stability to same-sex married couples irrespective of state of residency or state of travel. In addition, same-sex married couples can no longer be "denied the constellation of benefits that the states have linked to marriage."

Same-sex married couples must now navigate through the financial and estate planning opportunities created by the Supreme Court decision. For those same-sex married couples living in the 36 states that already recognized same-sex marriages, there may be little to no financial and estate planning changes necessary. However, for the 13 states that did not recognize same-sex marriages, there are myriad financial and estate planning issues that must be re-evaluated to ensure tax efficiency and wealth transfer continuity.

Estate Planning

For same-sex married couples, there will be estate tax planning opportunities that must be addressed. Such issues and opportunities are:

  • 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 Pennsylvania.
  • Prior year wealth transfer to a surviving spouse in states that have an estate tax or inheritance tax (such as Pennsylvania) may result in a refund. Current and future wealth transfer to a surviving spouse in these states will not be subject to inheritance taxes.
  • Asset titling and beneficiary designation coordination within the updated estate plan that is reflective of current law will be paramount.
  • Same-sex married couples will now have child custody rights, hospital visitation rights, adoption rights and access to a spouse's birth certificate and death certificate.

To discuss how Same-Sex Marriage legalization may affect your estate plan, click here to contact our office.