As we have discussed in previous blog posts, this summer's Supreme Court ruling that allows same-sex marriages to be recognized by the federal government has had a big impact on couples in California. Since same-sex marriage is legal here, couples who choose to marry are eligible for state and federal benefits, including the many tax benefits afforded to married couples.
However, since same-sex marriage is a relatively recent development and many of those who are getting married have been living in a marriage-like relationship for many years if not decades, a lot of people already have estate plans in place. Now that state-recognized marriage is an option, couples have an opportunity to restructure their estate plans, but that also means addressing a whole host of issues that may have previously been resolved in another way.
For example, many couples may already own a home together and may have developed an estate planning and tax strategy for the home in the absence of legally recognized marriage. Given the new tax climate and legal climate, it may be wise to alter that plan or it may be better to keep it in place, depending on the main concerns of the couple and who is already listed on the deed.
Another consideration will be income tax filings, which same-sex couples are now eligible to file jointly on both the state and federal level. In this case higher-earning couples may find that they owe more taxes than before so they might consider continuing to file separately if that provides an advantage.
Source: New York Times, "Gay Marriage Ruling Brings New Planning Choices," Fran Hawthorne, Oct. 15, 2013.