Written By: Lisa Strohm
Supreme Court Ruling
On June 26th of this year, in Obergefell v. Hodges, the Supreme Court historically ruled that the Constitution guarantees the right to same-sex marriage. This important ruling translates into significant financial, estate planning, and other benefits for same-sex married couples.
Financial Benefits for Married Same-Sex Couples
Prior to the June Supreme Court ruling, federal benefits only extended to same-sex couples who were lucky enough to marry in the 12 states where they were legally able to do so. Today, federal and state benefits extend to same-sex marriages in all 50 states.
The financial advantages of marriage have long been known – and now married same-sex couples can enjoy these advantages as well. The following benefits are now afforded to married same-sex couples in all 50 states:
- The ability to file federal taxes jointly (which also subjects legally married same-sex men and women to the same federal burden – the “marriage penalty” – with which heterosexual married couples must also contend)
- The ability to take advantage of unlimited gifting to a spouse without owing federal gift tax
- The ability to receive a spouse’s pension- and Social Security survivor benefits
- The ability to use the Family & Medical Leave Act to care for a spouse
- The ability to open Spousal IRAs
- Rollover rights in retirement plans
- The ability to obtain untaxed corporate health benefits through a spouse’s employer
- The ability to receive pension disbursements
- The ability to obtain a spouse’s government military benefits
- COBRA health coverage elections
Estate Planning and Other Implications for Married Same-Sex Couples
As a result Obergefell v. Hodges, same-sex married spouses have the same legal rights as those who are heterosexual. They can inherit property from a deceased husband or wife without a will, they can make medical decisions on behalf of their spouse and they can adopt children together.
Prior to the Supreme Court ruling, when a same-sex spouse passed away and left an estate of more than the federal exemption amount ($5.43 million in 2015), the surviving partner was required to pay estate taxes on the amount above the exemption amount. No more. Today, estates can be freely transferred from a deceased partner to the surviving same-sex spouse.
Because of the June 2015 Supreme Court ruling, married same-sex couples are guaranteed access to their spouse in the hospital. They are no longer vulnerable to family wishes when it comes to advance medical directives, living wills and power of attorney designations.
In many states, until the June ruling, only one spouse in a same-sex couple could adopt a child. If the legal parent of a child died, the surviving partner had no legal rights to the child. And when a same-sex couple adopted more than one child, the children could legally belong to only one of the parents. Today, both parents can adopt children and the families of same-sex couples can be recognized as one.
The June 2015 Supreme Court decision legalizing gay marriage has reduced anxiety levels for many same-sex couples. Gaining the financial and other benefits of marriage and no longer fearing the worst when it comes to estate planning, married same-sex couples can now breathe a bit easier.
Written By: Lisa Strohm