Now that same-sex marriage is here to stay in California, LGBT couples who have tied the knot can enjoy the same legal advantages available to all married couples when it comes to estate planning. Many same-sex married couples have no estate plan in place at all; others may have done some planning before marriage was possible. Either way, couples that are now married have an opportunity to update their estate plans to take advantage of tax and other laws that benefit married couples.
One of the most important advantages available to married couples in the estate planning sphere is the unlimited federal marital deduction. The marital deduction allows one spouse to transfer any amount of property to the other spouse and pay no gift tax for lifetime transfers, and no estate tax for transfers upon death.
In addition to the marital deduction, each spouse has an estate tax exclusion, currently set at $5.43 million for individuals who die in 2015. If the decedent's estate is valued at less than this amount, there is no federal estate tax. For married couples, the exclusion is now portable, meaning a surviving spouse can use any unused portion of the deceased spouse's exclusion. This in effect gives a married couple a unified total exclusion of $10.86 million for 2015.
Other advantages now available to married same-sex couples include the right of two spouses to combine their annual federal gift tax exemption; the right of a spouse to be the sole primary beneficiary of a 401(k) and refuse consent to anyone else being named the sole primary beneficiary; and the right of a surviving spouse to roll the deceased spouse's IRA over into their own IRA and maintain the account's tax-deferred status until age 70 1/2. An experienced California estate planning attorney can help a married couple design an estate plan that takes full advantage of these laws.
Source: Forbes, "Estate Planning Advice For LGBT Couples," Holly Hanson, June 10, 2015