In the past, same-sex couples had to do much of their estate planning individually, seeing as how they could not get married. However, when the Defense of Marriage Act was overturned, same-sex marriages became legal in many states, and this changed the rights that these couples have. It’s important to know exactly what this means for estate planning and related topics in New York, and the following tips can help.
1. Give gifts as a couple.
You are legally allowed to give tax-free gifts up to a total of $14,000 on your own. If you’re married, though, that amount doubles, so you and your spouse can give $28,000 as a gift.
2. Share your retirement plans.
If you have a retirement plan and you’d like your spouse to be the primary beneficiary, you can list him or her as such. This was more complicated before, when couples who may have been together for years could not be legally married, but it’s now far easier to share retirement plans, meaning they can pass directly to your spouse if you pass away.
3. Utilize those unused exclusions.
There are certain exclusions to estate taxes that can be used to protect assets. For married couples, exclusions that are not used by one person can be “ported” and passed over to the other spouse. This is important because it helps the remaining spouse protect even more of his or her estate in the future, so unused exclusions are not simply wasted.
The rise of same-sex marriage is still relatively new, so be sure you know how it may change your rights.
Source: Forbes, “Estate Planning Advice For LGBT Couples,” Holly Hanson, June 10, 2015