If you are in a same-sex marriage, you may have disregarded any Social Security or other federal benefits from your estate plan. That’s because the Defense of Marriage Act (DOMA) made sure that neither spouse in a same-sex marriage got a penny of the other’s federal benefits if the other died first, regardless that you and your loved one contributed the same amount to the programs as every other taxpayer.
However, in June 2013, the US Supreme Court held DOMA unconstitutional. As a result, you and your same-sex spouse are entitled to all the federal benefits that traditionally married couples have, which could equal hundreds of thousands of dollars over your retirement lifetime.
- For example, under certain conditions, you can receive half of each other’s benefits, even if you get divorced.
- If you’re widowed, you can get up to half of your spouse’s benefit if it’s lower than your own.
- You may also qualify for up to half of any disability payments.
- You may also elect a marital exemption on federal estate taxes.
It is still unclear whether federal law will recognize same-sex marriages based on the couple’s state of residency (“state of residency interpretation”) or the state in which the wedding ceremony was performed (“state of ceremony interpretation”). Under the “state of residency interpretation,” you are only entitled to federal recognition if you live in a state that recognizes gay marriage, such as New York. If you reside in a state that only approves of gay civil unions or bans same-sex marriage outright, then you could be out of luck. If the courts decide to apply the “state of ceremony interpretation,” the marriage will be recognized regardless of where the same-sex couple resides. We still need to wait and see what the courts will do in the near future on this issue.
Yet, all is not lost if you want to live in Ohio, which does not recognize gay marriage. In July 2013, John Arthur of Over-the-Rhine was granted a temporary restraining order so that his partner, Jim Obergefell, could be listed as his surviving spouse on his death certificate. Arthur and Obergefell were married in Maryland but live in Ohio. Arthur is dying of Lou Gehrig’s disease and wants his death certificate to recognize that Obergefell is his surviving spouse. This is the first time that the Ohio courts have ever recognized gay marriage. Historically, Ohio has recognized lawful marriages from other states that are not legal under Ohio. Therefore, it seems like Ohio may follow the modern trend of recognizing same-sex marriage. This is another ripe issue that will probably be decided in the next year or so.
Obviously, the laws for same-sex couples are rapidly changing in Ohio. Therefore, couples in a same-sex relationship must plan just as a traditional couple would. Bill Hesch is a CPA, PFS (Personal Financial Specialist), and an attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning. He also practices elder law planning, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky. Bill will be happy to meet with any same-sex couple to discuss current estate planning issues they may have.