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Financial Planning Strategies Post-Windsor

Estate Planning Financial Planning Health Benefits Life Insurance Taxes December 30, 2015 Author: Woody Derricks
Financial Impact of Marriage for Same-Sex Couples

With marriage now an option for same-sex couples, more favorable planning options are now available. Here’s a quick checklist for same-sex married couples in the wake of the Supreme Court’s United States v. Windsor and Obergefell v. Hodges rulings.


Workplace Benefits: Healthcare

Spousal healthcare. Check to see whether you or your spouse can receive better or less expensive healthcare benefits by joining the other’s workplace plan.

Tax-favored healthcare accounts. Consider using Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs) for qualified healthcare expenses of a same-sex spouse.


Workplace Benefits: Retirement Plans

Defined benefit pension plans. If you participate in a defined benefit pension plan at work, review your beneficiary designation to ensure it reflects your current intention. If you have named a non-spouse beneficiary, your spouse must provide written consent, as non-spouse beneficiary designations done without consent will be deemed invalid.

Defined contribution plans (e.g., 401(k)s). Review your beneficiary designation to ensure it reflects your current intention. If you have named a non-spouse beneficiary, your spouse must provide written consent, as non-spouse beneficiary designations done without consent will be deemed invalid.


Workplace Benefits: Other

Group life insurance. Consider enrolling your spouse for voluntary group life insurance if your employer makes it available.

Dependent Care Flexible Spending Accounts. If you and your spouse both utilize these accounts, recognize that the maximum that can be deposited each year is reduced from $10,000 (for two single individuals) to $5,000 (for a married couple).

Miscellaneous benefits. Review additional employee benefits such as retirement planning services, employee discounts, and the use of certain employer-provided athletic facilities, to see if your spouse can utilize them.


Financial Planning: Healthcare

Individual healthcare. If applying for a policy through an exchange because your employer does not offer coverage, and your spouse’s employer does not offer coverage to workers’ spouses, calculate your eligibility for premium tax credits and subsidies based on your combined income.

Medicare. If one spouse will not have the minimum of 40 quarters to qualify for coverage at age 65, recognize that Medicare coverage can become available based on the other spouse’s work history.


Financial Planning: Social Security

Social Security Filing Status. If you are ready to file for spousal or survivor benefits, look for ways to optimize your benefits as a married couple.


Financial Planning: IRAS, Taxes, and Life Insurance

Regular IRAs. If you have a regular IRA, consider updating your beneficiary to your spouse, if you have not already done so. If you wish to contribute to a regular IRA, determine whether you can make deductible contributions based on the combined income and workplace retirement plan availability of both spouses.

Roth IRAs. If you have a Roth IRA, consider updating your beneficiary to your spouse, if you have not already done so. If you wish to contribute to a Roth IRA, determine whether you can make contributions based on the combined income of both spouses.

Spousal IRAs. If you file a joint tax return, consider contributing to a spousal IRA. If neither spouse has a retirement plan at work, contributions will be tax deductible.

Estate and Gift Planning. When creating an estate plan, consider that same-sex married couples (and both spouses are U.S. citizens) can now use the unlimited estate tax marital deduction to pass assets to a surviving spouse without incurring federal estate taxes. When considering making gifts, recognize that gifts and property can be transferred to each other without paying federal income or gift taxes. Same-sex married couples will now also qualify for gift-splitting, meaning each spouse is treated as giving half the property gifted by the other.

Tax planning. Same-sex married couples can/must now file federal tax returns using the “married filing jointly” or “married filing separately” options.

Life insurance. Same-sex married couples may wish to revisit their life insurance needs. While estate planning needs may now be deemphasized, life insurance can be used to mitigate the financial risk of lost earnings, fund a spouse’s retirement, or pay for the education of a child.


Partnership Wealth Management is comprehensive financial services company. We are committed to providing our clients with the financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management we have a long history of working with the LGBT community. Among our many services we offer financial planning for gay couples and lesbian couples as well as estate planning for gay couples and lesbian couples. Financial planning is an important part of preparing for the future, contact us today to get started.

Source: Prudential Research & Perspectives

Partnership Wealth Management is comprehensive financial services company. We are committed to providing our clients with financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management we have a long history of working with the LGBT community. Among our many services we offer financial planning for gay couples and lesbian couples as well as estate planning for gay couples and lesbian couples. Financial planning is an important part of preparing for the future, contact us today to get started: www.partnershipwm.com.