Thursday, November 6, 2014

Marriage Equality

On October 6, 2014, the U.S. Supreme Court let stand the decision in Bostic v. Schaefer, which held that same-sex couples cannot be denied the right to marry.  There are many implications for the LGBT community, especially in estate planning. 

For same-sex couples who can now get married in Virginia, you will have all of the benefits of a traditional marriage.  1) You will have an unlimited marital deduction, which means that same-sex couples can give an unlimited amount during their life or at death to their spouse without any estate or gift taxes. 2) Each individual has a $5.34M personal exemption from estate taxes; and with an election can combine that exemption with their spouse for a $10.68M exemption for both together.  3) As spouses, you can make an election which would double your annual exclusion amounts from $14,000 to $28,000 for purposes of annual gifts to as many people as you want.  4) Now, a same-sex spouse will be able to make health care decisions even if there is not a formal written advance medical directive.  This has always been the law for a traditional spouse. 5) Same-sex couples will be able to take title to property as “tenants by the entireties,” which provides significant creditor protection for the non-debtor spouse.

The recent extension of the right to marry to same-sex couples has many implications, not just in estate planning, but in other areas of the law, such as family law and retirement, both of which involve individual rights and responsibilities.   

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