Following the US Supreme Court ruling in Obergefell v. Hodges, Same Sex Married Couples have new options and pitfalls when it relates to taxes and estate planning.
Tax Filing Status: Any couple who has been married in any state now has the right and indeed the obligation to file jointly, no matter where they live. This is the case for federal taxes (where this was already the case in 2013) as well as state taxes. Members of same sex couples who are married must now file as “married filing jointly” or “married filing separately”. Couples must be married by December 31, 2015 in order to file as married for the 2015 tax year. Married couples may no longer file as “single”.
Estate Plans: Dawda Mann attorney Jeffrey Moss, a tax and estate planning attorney says, “Estate plans can be revised to take advantage of marital deductions allowed for trusts and for new options in beneficiary designations for spousal retirement benefits. In many cases, estate plans must be reviewed and revised and pre-nuptial and/or post nuptial agreements should be considered because of spousal statutory elections which previously did not apply.
One interesting thing in Michigan is dower rights which provide a married woman rights to her husband’s real estate. It is unknown whether these rights will apply only to different sex couples, or only to women even in a same sex marriage, or if they will be abolished for all.”
Social Security: Social Security regulation changes are slow, and should not be assumed to be immediate as a result of the Supreme Court ruling. At this point, it appears that married same sex couples will eventually be able to receive spousal benefits that are due to a widow or widower, regardless of their state of domicile. Recently, Social Security benefits used to only be applicable if one’s domicile matched states that allowed same sex marriage. It is unclear whether SSA will retroactively allow benefits in cases where a married same sex partner died prior to the Supreme Court ruling.
Because the laws regarding same sex marriage are evolving quickly, we urge you to consult with attorneys who specialize in taxes and estate planning to discuss your options in order to plan appropriately for your family.