With the recent Supreme Court ruling legalizing same-sex marriage nationwide, same-sex couples now have the same marriage rights as heterosexual couples, including estate planning. While same-sex marriage has been legal in Maryland for some time, this ruling is still important to same-sex couples in Maryland because now their marriage will be recognized in states that previously did not allow same-sex marriage. Accordingly, it is important for same-sex couples in the state to understand what rights they have when they get married, particularly when it comes to estate planning.
First of all, married same-sex couples can now experience the same federal tax advantages of married heterosexual couples, including being able to transfer as many assets as they wish to their spouse. This includes both during their lifetime and after they pass away, and they will not be subject to the federal gift tax. In addition, married same-sex couples can now pass up to $28,000 in gifts to other people on a single check.
Furthermore, married same-sex couples can now take advantage of the federal portability clause. This is a $5.34 million estate tax exclusion. If a same-sex spouse has exclusions that they did not use prior to his or her death, those exclusions can be transferred to his or her spouse after his or her death without being subject to federal taxes.
Moreover, when it comes to 401(k)s and other qualified retirement plans (other than individual retirement accounts), same-sex spouses can be named as a primary, sole beneficiary on the account. In addition, when it comes to individual retirement accounts, legally married same-sex couples have the same protections as heterosexual couples. This includes rolling over their spouse's individual retirement account after that spouse passes away, without having to subject the account to liquidation or having to make any mandatory distributions until the surviving spouse is 70.5-years-old.
Not every same-sex couple will decide to marry. Nevertheless, those in Maryland who will experience many benefits of marriage, especially when it comes to estate planning. Same-sex couples looking to create an estate plan after their marriage may want to consult with an estate-planning attorney to make sure their rights, along with the rights of their heirs, are protected.