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Estate Planning for Same Sex Couples

In 2014, after a whirlwind year for same sex couples, the United States Supreme Court struck down portions of the Federal Defense of Marriage Act and then the US District Court ruled that Pennsylvania’s ban on same-sex marriage was unconstitutional.

This is amazing… but now what do we do?

As a result of the Pennsylvania court’s ruling NOT being appealed, it is time to consider what to do now that the legal landscape has so drastically changed.

For the first time, income, estate and gift tax planning, as well as other aspects of your will, trust and jointly owned property Pennsylvania will be the same as a married, heterosexual couples.

Legally, same sex couples can file joint tax returns or as married filing separately. These are issues that never had to be considered before which makes it the perfect time to reevaluate your estate plan.

First and foremost, as with any couple, I recommend a will, so that you know your wishes are seen to upon your passing. This process also needs to be considered with tax planning in mind so that transfers can be accomplished efficiently with respect to taxes.

The same is true with assets for same-sex couples – You can and should put a beneficiary designation on assests. These are non-probatable assets, meaning that they do not pass through your will. These include life insurance, annuities, IRA’s, 401ks, 403bs and pensions.

What’s really important is that same sex couples not take the view that because they are married, wills and planning are not important.
I say this because one of the biggest misconceptions I often hear is that without a will, Pennsylvania law split’s a persons assets between their spouse and their children.

Is this what you really want?

Another issue is the ownership of property. Should it be held individually which causes the issue or probate upon their passing and potential tax liability? Or do we title it jointly to save time and money? It’s important to consider because now that you are married, there isn’t any transfer tax. But if your estate is large enough, it may make sense to separate property to even out any tax consequences or in the event of a divorce.

There are many issues that have reared their ugly head now that the state has ruled same sex marriage as legal. Don’t get me wrong, this is incredible news…. But with this news comes some heavy decisions that need to be made.

Let’s sit down and talk through what the best planning strategies are for you and your family. Contact us for a free consolation.