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What The Supreme Court Ruling Means for Estate Planning



Written by: Max Elliott | Max Elliott Law 

If my 12-year-old niece giddily knew about the Obergefell ruling the day it was handed down, most people in America probably know that marriage is now a fundamental right belonging to all persons in the United States, regardless of the marital parties’ gender. Lesbian, gay, bigender, transgender, or queer persons can marry who they want. It is a cause célèbre indeed.

Yet, what does this mean in terms of estate planning, estate administration, and wealth preservation? The decision in Obergefell v. Hodges created a positive shift of tectonic magnitude for planning in the LGBTQ community because, where states banned or didn’t recognize LGBTQ marriages before, moving ahead LGBTQ married couples can now look forward to:

Less complex estate planning.

  • Complex advanced directives such as Hospital Visitation Authorization forms shouldn’t be required for same-sex spouses.
  • Married couples may establish joint wills and joint trusts.
  • Married couples may use state marital deduction trusts, e.g., “QTIPs,” in states that provide such vehicles.
  • Married couples may mandate the surviving spouse elect state portability, if such is available in the couple’s state.
  • Each party to the marriage may have a presumption of parentage for children born during the marriage.

Less contentious estate administration.

  • Fewer probate family feuds will ensue because state probate law should recognize the surviving spouse as next of kin.
  • Surviving spouses may take advantage of a spousal award provision.
  • Surviving spouses may take advantage of a spousal renunciation provision.
  • The surviving spouse should be considered guardian of the children.
  • Surviving spouses will benefit from state intestacy laws that drive the policies of financial institutions and insurance companies.

Greater wealth preservation and wealth building.

  • Married couples may take advantage of filing joint state tax returns in states with income taxes.
  • Married couples don’t have to obtain extra life or medical insurance.
  • Married couples may use “tenancy by the entirety” when buying homes in states that allow for such.
  • Married couples may decide whose state benefits to use first upon retirement.
  • Couples who want to marry don’t have to relocate to a jurisdiction that is more friendly but also more costly.

The above focuses on estate planning and administration benefits, but there are more than 1100 benefits married LGBTQ couples may begin to enjoy. Couples should thoroughly review all benefits with their trusted advisors before taking actions because every family is unique. However, overall, the U.S. Supreme Court just made the estate and wealth-building world for the LGBTQ community a lot less complex, and less complexity generally means more emotional, legal, and financial stability; and we will all benefit from that.

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