Independent Thinking®

Marriage Equality

By Evercore Wealth Management
July 15, 2015

Same-sex couples across the United States are reviewing their estate plans in the wake of the June 26 Supreme Court ruling that legalizes same-sex marriages in all states. Here are some of the issues families should begin considering, in consultation with their wealth advisors, based on their specific circumstances:
 

  • All married couples are now able to take advantage of the unlimited marital deduction and the portability provisions, which allow a surviving spouse, in certain circumstances, to take advantage of the deceased spouse’s unused Applicable Exclusion Amount ($5.43 million in 2015).
  • Same-sex spouses are now able to split gifts when making annual exclusion gifts ($14,000 in 2015) to children, relatives or friends.
  • Couples may want to consider life insurance options, including purchasing a second-to-die life insurance policy, to provide liquidity to pay estate taxes due upon the death of the surviving spouse. With proper estate planning, there should be no estate tax due on the death of the first spouse.
  • Each spouse should review his or her retirement accounts, since a surviving spouse will now be entitled to a rollover of a deceased spouse’s account without being required to take minimum distributions or lump sum distributions. Further, in a 401(k) plan, a participant will now need to obtain his or her spouse’s approval to name someone other than the spouse as the beneficiary.
  • Married couples will now be required to file their income tax returns as “married filing jointly” or “married filing separately.” Couples may wish to amend any income, gift or estate tax returns within the statute of limitations period, and obtain a refund of any overpayment. Same-sex couples may still be able to amend tax returns for 2012, 2013 and 2014.
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