Though same-sex marriage is legal in Maryland, that is not the case in every state. The changing landscape of same-sex marriage rights, along with laws governing the distribution and taxation of estate property, can cause some obstacles for same-sex couples when it comes to estate administration.
A first concern for both married and unmarried LGBT couples is estate tax. Both federal and state taxes govern how much property can be passed on to surviving loved ones without taxation, and those laws often take marital relationships into account. Unmarried couples may want to consider proactive estate planning that involves trusts or other tax shelters. Even LGBT couples who are married may want to consider extra planning, especially if they have moved into a state that doesn't recognize same-sex marriage.
Couples should also consider how asset distribution might be handled through probate, especially in the absence of a will. In the absence of a legal marriage, probate assets may not pass directly to the surviving partner. Though the IRS and other federal agencies recognize same-sex marriages for the sake of taxes and other processes, some probate issues – including property rights – may be governed by state law. Same-sex couples can protect their interests and wishes by ensuring wills are in place that provide detailed instruction on the distribution of assets.
When a couple – same-sex or otherwise – is not legally married, the issue of ownership becomes important. In many states, it's assumed that spouses own half of marital or community property. The surviving partner in an unmarried couple, however, may have to go through more work to prove ownership in shared property, such as real estate.
Estate planning today makes future estate administration easier should anything happen to one or both individuals. In addition, strong estate planning saves heirs from the emotional and financial expense of court battles during times of grief.