Many Tennessee residents are aware of the recent Supreme Court ruling that legitimizes same-sex marriage. The outcome of that case is viewed as a win for gay couples across the nation and will lead to a number of changes for those who enter into a same-sex marriage. Among those changes are improvements in estate planning rights, which can have a positive impact for many families.
Same-sex spouses will now have the same portability rights as heterosexual couples. Portability refers to the right of a surviving spouse to take any unused estate tax credit and apply it to his or her own personal credit. The current estate tax credit sits at $5.43 million, and wealth accumulated beyond that limit could be subject to the estate tax. When a spouse dies, the surviving partner is able to use any leftover credit toward his or her own estate.
Another area in which estate planning is simplified for same-sex couples is in relation to incapacitation planning. Because same-sex couples can now be acknowledged as legal spouses, the chance of securing the role of conservator or guardian is much higher. In the past, many families went through contentious legal battles over who should have the right to make decisions for an incapacitated loved one. It is important to note that simply being acknowledged as a spouse does not necessarily lead to a designation as guardian; having the proper power of attorney paperwork in place remains the best course of action.
For same-sex spouses in Tennessee and elsewhere, the recent Supreme Court decision will go a long way toward legitimizing a bond that exists between two loving partners. In terms of estate planning, gay couples who already have a plan in place may want to assess that plan to ensure that they still have the highest level of protection in place. For those who have not taken this important step, it may be time to create a plan that will ensure a smooth transfer of wealth and clear incapacitation plans if and when the time comes.
Source: The National Law Review, "Estate Planning for Same-Sex Couples After Obergefell", Terri R. Stallard, Aug. 7, 2015