For same-sex couples there have been a lot of changes over the last few months. With the United States Supreme Court’s ruling on the Defense of Marriage Act many of the former challenges for same-sex couples have been removed. Michigan residents may be interested to know that under this new ruling, the federal government must extend benefits to same-sex couples who have been legally married in one of the states that allows gay marriage.
This has had major effects for same-sex couples and their estate plans. Now, the federal government must give same-sex couples the same federal estate tax treatment that it gives heterosexual married couples. Under this rule, same-sex couples are not able to unlimitedly transfer wealth between themselves without incurring tax obligations.
Furthermore, many retirement plans – such as a 401(k) – are governed by federal rules and guidelines. Now with this new ruling, the protections offered under these retirement plans will be extended to married same-sex couples.
Finally, the federal government will now have to recognize measures taken by couples to avoid probate. These include joint ownership of property, insurance plan beneficiaries and other estate planning tools. This will allow same-sex couples to protect their privacy and avoid long drawn-out probate battles when one spouse dies.
Same-sex couples should ensure that they are prepared for the death of their partner or spouse. With the right estate planning, same-sex couples will be able to come up with a solid plan that can help them take advantage of all the changes. By taking the time to protect themselves now, couples can ensure that they leave their loved ones in the best position possible.
Source: The State, “Married same-sex estate planning evolving,” Ashleigh Brooker, Nov. 9, 2013