Estate Planning for Same-Sex Couples

Category: Estate Planning

Estate Planning for Same-Sex Couples

2015 has been an exciting year for same-sex couples in Florida.

In January, Florida became the 36th US state to legalize same-sex marriage.Click To Tweet

If you are involved in a same-sex partnership and have recently been married or are thinking about getting married, there are some tax changes and considerations for estate planning with a spouse that you should be aware of. Proper estate planning is especially important for newlywed same-sex couples in Florida, who may have been together for years, all the while purchasing real estate, acquiring assets, and comingling money.

Below, we’ve listed some important changes to the way you may file your taxes and plan your estate as a legally married same-sex couple.

Joint tax returns. If you choose to get married, you and your spouse have the option to file taxes jointly rather than individually. The IRS encourages couples to file joint returns whenever possible by offering tax breaks to couples that file together.

Portability. You will also have the opportunity to take advantage of some of the tax benefits married couples enjoy, including a feature of Florida law known as “portability.” Portability allows a married individual to transfer his or her unused estate tax exclusion to a surviving spouse. That means if your spouse passes away, and the value of his or her estate doesn’t use up all their exemption from estate taxes, the amount that remains may be passed on to you. With portability, you and your spouse may be able to avoid paying costly taxes to the government on your estate.

Gift tax exemption sharing. As a married couple, you and your partner are able to combine your individual gift tax exemptions. By sharing your gift tax exemptions, you’ll be able to gift more without paying taxes.

Retirement plan benefits. If you marry your same-sex partner, you will be able to name him or her as a beneficiary on your employer retirement plan. Money remaining in the accounts at your passing will go directly to your spouse, without the hassle and high cost of probate court.

Retirement Plan Benefits

Social security benefits. As a married couple, the surviving spouse in your marriage can collect the deceased spouse’s Social Security benefits if those benefits are more than what the surviving spouse is receiving.

IRAs. The surviving spouse in your marriage will now be able to roll over a deceased spouse’s Individual Retirement Account into his or her own account without being taxed.

Medicare. As a lawfully wedded couple, you will now be able to enroll in the Medicare program if your spouse is a recipient, even if you do not have the requisite work history.

Intestate deaths. If you or your partner dies intestate, the surviving spouse will be entitled to a share of your estate—either 50 percent, if there are children from a previous marriage, or 100 percent, if there are no children from a previous marriage.

Making Sure Your Estate Plan is Up-to-Date

Making Sure Your Estate Plan is Up-to-Date  in Florida

If you decide to get married, you should carefully review any existing wills, trusts, and other estate planning documents. You should examine and update your estate plan to ensure it provides financial protection for both you and your partner, protects your assets from creditors, and clarifies your wishes in the event of incapacitation. You also may want to consider drafting a prenuptial agreement that makes accommodations in the event of your potential divorce.

In addition, if you had joint ownership of a property with an ex-spouse from a former marriage, it’s important to make sure your ownership documents are updated for your new marriage. You will need to consider any stipulations from the divorce settlement, and take these into account.

As with any relationship, a same-sex marriage calls for careful estate planning if you want to be sure your loved one is provided for and your wishes are honored. There are many different factors and considerations you should take into account as a same-sex married couple—the considerations included in this post only begin to scratch the surface.

Being married is a unique and wonderful experience that comes with many benefits in Florida. To take advantage of your rights as a newly married couple and plan for your future, it’s highly advisable to talk to a knowledgeable estate planning attorney. Your lawyer can help you understand the changes in the options available to you, and guide you through the process of revising or creating an estate plan that accommodates your new lifestyle. With the help of an experienced Florida estate planning lawyer, you can protect and provide for you and your spouse, while protecting your assets from taxes and creditors.

About the Author:

Christopher Q. Wintter is the founder of Wintter & Associates, P.A. and a board-certified expert in Trust and Estate matters by the Florida Bar. With more than 24 years’ experience as a practicing attorney, he also serves as an instructor and faculty member for the National Institute of Trial Advocacy (NITA)—the nation’s leading provider of legal advocacy skills training to practicing attorneys—and has earned the AV® Preeminent™ rating with LexisNexis Martindale Hubbell. He was also selected for inclusion in Florida Super Lawyers for 2011 and 2012 in Estate and Trust Litigation.