An Overview of Financial Planning for Same-Sex Couples

Financial Planning Financial Planning for Gay Couples April 15, 2016 Author: Woody Derricks

An Overview of Financial Planning for Same-Sex Couples

It’s been almost three years since the Supreme Court allowed same-sex marriage to be recognized as marriage at the federal level (U.S. v. Windsor, June 2013) and almost a year since the Supreme Court legalized same-sex marriage across the United States by over-turning the gay marriage bans in 13 states (Obergefell v. Hodges, June of 2015). Gay marriage was already legal in 37 other states plus the District of Colombia due to state action or lower court actions.

Not only are both cases a tremendous victory for same-sex couples from a social and emotional perspective but from a financial perspective as well.

financial planning for same sex partners, LGBT friendly financial advisorThe most recent decision allows same-sex couples to marry, if they so chose, in any of the 50 states and affords them the same legal benefits and protections under both state and federal law as any other married couple. It levels the playing field. It makes employee benefits and financial planning strategies always available to opposite-sex married couples, available to same-sex married couples as well.

It considerably benefits same-sex married couples residing in any of the 13 states that previously banned gay marriage for whom a whole of host of financial issues remained unresolved, such as Social Security benefits, health care benefits, state taxes, estate planning, and retirement savings.

However, not all of the financial changes that come with marriage are positive. For instance, a couple may end up paying more income tax as married than they would have as two single individuals, the so called “marriage penalty”. Planning is important to minimize the impact on long-term financial goals.

gay friendly financial advisor washington dc, gay friendly financial advisor baltimore, gay friendly financial advisor Columbia, gay friendly financial advisor arlingtonSame-sex couples whose marriage status has changed due to the recent rulings or who are now considering marriage should:

Review how marriage recognition will affect workplace benefits, such as health care, retirement plans, 401Ks, and other benefits and other aspects of financial planning such as taxes, healthcare (through an exchange or Medicare), Social Security, IRAs, life insurance, and estate and gift planning.

  • Review beneficiary designations on work place retirement plans and 401K’s, IRAs, insurance policies and bank accounts.
  • Update health-care directives and power-of-attorney forms if necessary.
  • Seek advice from professional advisors to consider additional steps that may be necessary.

It may be necessary, for instance, to unwind old financial planning strategies that were previously put in place. For example, a life insurance policy to cover estate taxes when one partner dies. This type of policy is no longer necessary for same-sex married couples.

Both Supreme Court decisions apply to same-sex married couples only. Same-sex couples who chose not to marry are not afforded the same benefits and protections. They will continue to have to use workarounds to get the same legal benefits and protections as married couples and should definitely seek guidance from professional advisors.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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: Partnership Wealth Management.