The Supreme Court’s recent decision in Obergefell v. Hodges, means that state bans on same-sex marriage are unconstitutional. It also means that same-sex couples might want to update their estate, financial, tax, and retirement plans.
The recent decision will make it easier for same-sex couples to file their taxes jointly. In community property states, like Arizona and New Mexico, same-sex couples are now able receive the tax advantages associated with holding title as community property: this property is generally entitled to a fully stepped-up basis in the hands of a surviving spouse. Surviving spouses in same-sex marriages will now also be able to receive IRA funds as a direct rollover. Same-sex couples will also receive equal access to social security benefits and be able to transfer wealth to each other as spouses.
This historic decision will have a major impact on how same-sex couples plan their estates and their finances moving forward. The IRS, Social Security Administration, and Labor Department are expected to provide guidance as to the ramifications of the new ruling. If you are in a same-sex marriage, it is a good idea to sit down with an estate planning attorney to discuss the impact of the recent changes.
Contributed by Phoenix and Prescott Estate Planning Attorney, Andrea L. Claus.
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This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.