Basking Ridge, NJ- On June 26, 2015, the U.S. Supreme Court has ruled in favor of Same Sex Marriage across the United States. The Key Points of the Ruling:

 1 – Same-sex marriage is a right guaranteed by the 14th Amendment.

 2 – States must license and recognize same-sex marriage. 

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 3 – States must recognize out-of-state same sex marriages.

 Some issues that will be impacted:

  •  No more conflict between federal and state laws and taxation.
  •  More same-sex couples can be legally married (in states that previously did not permit it.)
  •  Relation to the 2013 U.S. Supreme Court decision in Windsor: Windsor recognized Federal benefits for legal same-sex marriage while this case (Obergefell v. Hodges) allows same-sex marriage in all states and in turn allows more same-sex married couples to take advantage of Federal tax benefits.

 The following Tax Benefits are now available to same-sex married couples in all states: 

  1. IRA Spousal Benefits- Spousal IRA contributions (or spousal Roth IRA contributions) and Spouses IRA rollovers at death.
  2. Qualified Plan Benefits-Spousal protection under ERISA.
  3. Federal Income Tax- Joint tax returns must be filed –couples no longer have to file two returns instead of one and that can save tax preparation fees.
  4. Federal Estate and Gift Tax Tax free lifetime transfers to the spouse.

 Here are some essential planning tips for tax and estates to protect assets of same-sex married couples:

  • Update all key legal documents to identify as a “spouse”.
  •  Check beneficiary forms on all plans and IRAs – primary and contingent beneficiaries.
  •  Check beneficiary forms for employer benefits, life insurance, annuities.
  •  Update wills and trusts – check provisions for children – guardians.
  •  Have proper documents for end of life decisions.
  • - Living Wills and Health Care Proxies.
  •  Provides access to personal health information.
  •  Powers of Attorney should be updated. 

 

For more clarity on this tax Issue or general information on the Tax code email me at tax@walterpardo.com or call us 1-877-714-2362.