WEALTH PLANNING

An Assist for Same-Sex Planning

Ocean/Corbis

» Click here to access your account and more insights.

» Not a client yet? Click here to find an office or have us contact you.

For same-sex couples, estate planning has long been complicated because many of the perks in estate laws are reserved for married, opposite-sex spouses. Now a rule change has provided a temporary respite for those couples. “A recent increase in the lifetime gift and estate tax exemption to $5 million has lessened some of the wealth transfer issues that many same-sex couples face because they cannot use the marital deduction available to opposite-sex spouses,” says Greg Cerbone, U.S. Trust’s chief fiduciary officer and co-executive sponsor of U.S. Trust’s LGBT Wealth Planning Program. “Unfortunately, the increase is only in place for this year and next, so those hoping to utilize this opportunity need to move quickly.”

Key Documents for Same-Sex Couples:
  • Will
  • Revocable Trust
  • Durable Power of Attorney
  • Advance Healthcare Directive
  • HIPAA Release
  • Beneficiary Designations
  • Cohabitation Agreement

Even with the new advantages, same-sex spouses, domestic partners, and members of civil unions or any other committed same-sex relationship all continue to face complex issues that go far beyond estate planning, says Cerbone. “They simply do not enjoy the same legal rights and benefits as opposite-sex married couples when it comes to wealth transfer, tax planning, Social Security and retirement benefits, incapacitation and death, adoption and child care, and even citizenship,” he says. “And given a constantly shifting legislative and judicial environment, that’s likely to remain true.”

That’s why it’s important to work with advisors who are not only skilled in estate planning but also knowledgeable about the challenges faced by domestic partners, Cerbone advises. “Whatever happens to the tax laws,” he says, “developing a thorough estate plan and getting the right documents in place is the best way to protect against the unexpected, control the disposition of property and ensure that legacy goals are met.”

IRS Circular 230 Disclosure: Pursuant to IRS Regulations, neither the information nor any advice contained in this communication (including any attachments) is intended or written to be used, and cannot be used, for the purposes of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards, and other risks associated with future political and economic developments. Energy and natural resources stocks have been volatile. They may be affected by rising interest rates and inflation and can also be affected by factors such as natural events (for example, earthquakes or fires) and international politics. Private Client Line may not be appropriate for all clients.