Estate Planning For Same-Sex Couples

In light of the 2013 Windsor decision, which struck down as unconstitutional the portion of the Defense of Marriage Act (DOMA) that codified marriage as between man and woman, estate planning attorneys have begun to reevaluate options for same-sex couples. From the standpoint of federal law, same-sex spouses are now afforded all of the same rights and benefits that come with marriage as were traditionally only given to heterosexual spouses. Some federal government agencies, such as the IRS, are still ironing out the details of how to effectively amend their administrative rules so as to conform to the Windsor decision.

For those estate planning attorneys practicing in states which have also legalized same-sex marriage, the issues are less complicated, as no conflict between federal and state law exists. This means that for things like tax and Medicaid planning, same-sex couples can breathe easy knowing that state agencies will also recognize their union and afford them the benefits that come with it, just the same as the federal government will now do in light of Windsor.

Rhode Island and Massachusetts are among the states which have legalized same-sex marriage. As a result, most same-sex couples’ estate plans in these states can now pretty closely align with the type of plans traditionally reserved only for heterosexual couples. This is not to say, however, that same-sex couples do not face other obstacles as the law continues to evolve throughout the rest of the country.

For instance, same-sex couples who relocate to other parts of the country must still be aware of whether their newfound home-state will recognize what was considered a valid marriage in Rhode Island or Massachusetts. While their estate plan might have been sound here in Rhode Island, it may be entirely ineffectual in a popular retirement state like Florida. Furthermore, many same-sex couples own properties in multiple states. For state estate tax purposes, passing property to a same-sex spouse in one of the states that does not recognize same-sex marriage might not have the benefit of the marital deduction, resulting in estate tax consequences for the predeceasing spouse.

District Courts around the country have begun hearing challenges to the constitutionality of their states’ bans on same-sex marriage, and now, two Circuit Courts are set to decide the issue this fall. So many additional states may begin to permit same-sex marriage as the results of the Supreme Court’s Windsor decision begin to trickle down to states.