Two important U.S. Supreme Court decisions in two years removed not only the obstacles to same-sex marriage but also most of the financial inequities couples faced.
The June decision upholding same-sex marriage opened up financial advantages of marriage that either had been completely unavailable to gay and lesbian couples or were complicated by marrying in a different state than the state in which they live. The decision came on the heels of the high court’s 2013 ruling against sections of the federal Defense of Marriage Act, a ruling that made Social Security benefits available to gay and lesbian couples in states that permitted them to marry.
In the wake of these decisions, “If marriage is an option and it makes sense emotionally for the couple, that’s also the best financial strategy,” said Sheryl Garrett, a certified financial planner in Eureka Springs, Arkansas.
There are disadvantages to marrying.
Filing joint tax returns can mean higher income taxes or less financial aid for college-bound offspring. Nevertheless, Garrett, co-author of “Money without Matrimony: The Unmarried Couple’s Guide to Financial Security,” said the court rulings together make a compelling argument for marrying.
She provided Squared Away with five financial benefits of same-sex marriage listed below. They’re the same advantages that were always available to heterosexual couples who could produce a marriage license.
Now that same-sex couples in every state can marry, Social Security benefits will become available to more people. In fact, in Massachusetts and other New England states where same-sex marriage has been legal for years, the U.S. Social Security Administration is already “processing some spousal and related benefits for same-sex couples and paying benefits where they’re due,” said Stephen Richardson, the agency’s spokesman in Boston. He encouraged same-sex couples who believe they may be eligible to apply for benefits as soon as possible.
A same-sex couple who marries can now switch to an employer’s family plan and will generally pay much less in total premiums, since employer plans have lower administrative costs, less adverse selection, and are typically subsidized by the employer. Now that same-sex marriage is legal, some employers are eliminating benefits for some same-sex partners and returning to a two-tiered system in which employees must declare themselves either married or single.
In the wake of the Supreme Court ruling, Garrett said, life “will be a lot simpler” for couples who marry.