But within a matter of four years, two groundbreaking Supreme Court decisions with twin June 26 anniversaries, Windsor (2013) and Obergefell (2015), would allow their marriage to be recognized at the federal and state levels and require all states to allow same-sex marriages.

Kathleen Roin
Kathleen Roin
“Beyond the civil rights achievements, legal recognition of same-sex marriage at both the state and federal levels facilitates greater parity of benefits once available only to opposite-sex married couples,” Ms. Roin said.

The changes over the past few years could mean wealth and estate planning that same-sex couples put in place years ago may no longer be valid.

Now is a good time to look over your paperwork and make sure that your intentions are current and still in effect, given the legislative changes. Here’s a quick checklist for same-sex couples in the wake of the Supreme Court’s rulings and subsequent IRS guidance:


Joint tax filing

Same-sex married couples can now file their federal and state taxes jointly.


Health care

Same-sex married couples now qualify for spousal coverage through employer-offered health plans. Find out if you or your spouse can receive more comprehensive or less costly healthcare benefits by joining the other’s workplace plan.

Health and dental benefits for same-sex spouses are no longer subject to federal taxation. Prior to the Supreme Court’s 2013 decision, this coverage from an employer’s health care plan was usually taxed at the federal level. The Supreme Court’s 2015 decision changed the state tax rules.

More good news: If you provided health coverage for your same-sex spouse prior to the June 2013 Supreme Court ruling, you’re eligible to claim a refund of any income taxes paid on the difference.


Beneficiary designation and retirement plan benefits

Legally married same-sex spouses, regardless of state of residence, will have spousal consent rights under certain types of employer-sponsored retirement plans. This will impact matters such as consent to designate a nonspouse beneficiary, qualified joint and survivor annuity benefits, and qualified pre-retirement survivor annuity benefits.

If you’ve named a nonspouse beneficiary, your spouse must provide written consent, as any designations done without consent will be invalid. Review your beneficiary designations to ensure they reflect your current intentions.

Here are some benefits you’ll receive as a same-sex spouse:

  • You’ll qualify for the more favorable spousal treatment under required minimum distribution rules.
  • You can assume the account—that is, treat it as your own—if named as beneficiary on a spouse’s IRA.
  • You can roll over distributions from a deceased spouse’s employer-sponsored retirement plan account into an IRA in your own name, provided you’re named as beneficiary.
  • You’re able to transfer IRA and retirement plan assets tax-free upon divorce.
  • You can take qualifying hardship distributions from a 401(k) plan if needed to pay for a same-sex spouse’s medical care, tuition, or burial costs.

Social Security

The availability of spousal Social Security benefits opens the door for same-sex married couples to use claiming strategies long used by opposite-sex couples.

When a member of a married couple retires, he or she can claim either his or her own Social Security payment or a spousal benefit that can be worth up to half the spouse’s benefit. Additionally, when one spouse is deceased, the survivor can claim the greater of the two spouses’ benefits.


“Marriage penalty”

For some same-sex couples, filing jointly could result in increased income tax liabilities, commonly referred to as a “marriage penalty.” This happens when the combined tax liability is higher when filing as a married couple than as two unmarried taxpayers. But higher taxes aren’t a given; the reverse scenario—a “marriage bonus,” where joint filers have a lower combined tax liability—is possible too. Consult with a tax professional to find out how the various filing options may impact your tax return.


Prepare for your future together

Whether you and your spouse are starting out, or need to refresh wealth and estate plans because of the recent legislative changes, now is a good time to have an in-depth conversation on how to prepare for your future together.

Note
All investing is subject to risk, including the possible loss of the money you invest.