Marriage Equality...Financial Challenges
Five years ago, same-sex marriage was legal in 5 states. Today, over 35 states have legalized the union between same-sex couples. Unfortunately, however, many state and federal laws have not been updated to reflect this momentous change, creating a myriad of legal and financial issues for same-sex couples.
Today, there are 250,000 married same-sex couples in the United States. A large portion of them, however, face financial and legal issues due to the legal status of their union. It’s important to anticipate these issues and prepare accordingly in order to avoid financial and legal distress. Issues Some of the most common issues arise when a same-sex couple travels to another state to tie the knot. The federal government acknowledges same-sex marriage for income tax purposes, but each state has its own jurisdiction over the legality and administration of it. A couple that marries in California, for example, may face these issues when they move back to Texas:
If one of them passes away, the other partner cannot claim Social Security benefits, as the definition of marriage falls on individual states who are responsible for administering the benefits
The unlimited marital deduction does not apply, creating an unnecessary tax burden in the transfer of assets between spouses
Custody agreements favor the biological parent despite the child(ren) growing up with a second (same-sex) parent
And if they want to own property under both names, a whole world of legal headaches is introduced. What You Need to Know The legal landscape of same-sex marriage is constantly changing, and Pioneer Wealth is continuously investigating your options. Some of the questions you should ask yourself are:
To whom do these assets legally belong?
Is marriage an astute decision in the current state of things?
How can we prepare for retirement?
In a divorce, who gets to keep what?
What happens if my partner passes away?
Pioneer Wealth strives to focus on the financial needs of our clients. It is critical to know all of the issues that can affect your situation and plan accordingly.