guest author is Thomas Sciacca, a principal at the Law Offices of Thomas Sciacca, PLLC, and
a longtime SAGE volunteer and supporter. In the wake of the Supreme Court decisions on the Defense
of Marriage Act (DOMA) and Proposition 8, many same-sex couples are wondering
how the law will impact them. Tom offers insights on the decisions, and five
points for couples to consider in an article originally posted on SAGE’s
National Resource Center on LGBT Aging. Below is an excerpt from the article;
read the full piece here.
these tips are aimed at New Yorkers, the main points here apply to older
same-sex couples in other states where marriage equality has passed.
Tom Sciacca, Esq.
On June 26, 2013, the United States Supreme
Court ruled that Section 3 of the so-called Defense of Marriage Act (DOMA)
violated the Equal Protection Clause of the United States Constitution. In
ruling for the basic equality and dignity of all people, the Court held that
the Federal government could not lawfully discriminate against same-sex married
couples by declining to provide them with the same rights Federal law affords to
opposite-sex married couples.
[T]he Court’s recent decisions are certainly
cause for celebration. However, the savvy reader may inquire—how does this decision
affect the legal affairs of the legally-married LGBT New Yorker? To respond to
that, I humbly offer five legal tips that should help start an informed
conversation between you and your attorney, financial advisor, and tax
1. If you haven’t already done so, now is the
time to consider getting married. Under the yoke of DOMA, LGBT married couples faced a level of
discriminatory hurdles while interacting with the Federal government. New York
State recognized their marriages and afforded them all available rights, while
the Federal government regarded them differently. With the Supreme Court ruling
Section 3 of DOMA unconstitutional, much of the disparate treatment has fallen
by the wayside.
2. Same-sex couples can now file joint
Federal income tax returns.
Here is something you never had before—a reason to get excited when filing your
1040! Since 2011, New York’s same-sex married couples could file a joint NYS
income tax return, but not a joint Federal income tax return. Often, this
resulted in couples preparing two sets of tax returns listing different marital
status on each, with all the resulting frustration and cost. Effective
immediately same-sex married couples can file a single return, or, if it is to
their financial benefit, file as “married filing separately.” Couples should
also review their previous Federal income tax returns (since their marriage)—it
may be in their interest to file amended Federal income tax returns if it will
result in a larger refund. Additionally, a surviving spouse may wish to file an
amended Federal estate tax return if it will produce a refund.
3. Be wary when traveling or relocating to a
state that does not recognize marriage equality. As mentioned above, the Supreme
Court only invalidated Section 3 of DOMA, which regulates Federal recognition of
valid same-sex marriages. It did not invalidate Section 2, which allows states
to not recognize your marriage, and, essentially, deny you with all of the
rights of a married couple. Think twice before moving to a state that bans
same-sex marriage, and, if you do, consult your attorney to make sure you have
a Will, Power of Attorney, Health Care Proxy, and Living Will in place to
protect your legal status. Sometimes, the lost civil liberties greatly outweigh
the lower taxes or nicer weather.
4. Check beneficiaries on retirement accounts. A Federal law known as ERISA
governs all retirement accounts, including most 401(k), 403(b), SEP, SIMPLE,
and IRA programs. This law requires that your spouse inherit a minimum of half
of the qualified retirement account, unless he or she consents to an alternate
distribution by signing the beneficiary designation form before a Notary
Public. Often, people choose to name non-spouse beneficiaries (younger
relatives, charities, etc.) on these accounts because of the significant tax
advantages offered by such a designation. If those are your wishes, make sure
your spouse signs the consent. In the past, this was not necessary, as DOMA
prevented the Federal government from recognizing all same-sex relationships. A
simple check on the form will save hassle/aggravation later.
5. Review your Wills. In general, one should review
his or her Will (and other estate planning documents) every 2-3 years. Under
New York law, a subsequent marriage may automatically revoke some or all of an
existing Will. In general, a Will that lists an individual by name is more
effective than one that lists an individual by relationship (such as “to my domestic
partner”—especially if that person is now a spouse). Spend a few minutes
reviewing these documents, and speak to your attorney about whether or not they
still reflect your wishes fully. Now that same-sex spouses can transfer assets
between each other free of estate, gift, and generation-skipping transfer tax,
now may also be a good time to review the tax planning in those documents to
ensure you can take advantage of all available rules.
these tips are not a substitute for a meeting with the appropriate
professional, who can tailor his or her advice to your specific needs.
remember—it is a time to celebrate!