Nearly nine hundred same sex couples were married in New York on Sunday. It marked the first day that members of the LGBT community could receive marriage licenses after the landmark marriage equality bill was passed late last month and signed by the Governor. Marriage equality will provide each partner with a variety of financial benefits and legal rights at the state level. However, the lack of any federal recognition means that many area same-sex couples will still need to conduct unique New York estate planning to protect their assets and provide for their loved ones.
The 1996 Defense of Marriage Act (DOMA) defines marriage at the federal level as a legal union between one man and one woman. The federal government usually recognizes any marriage so long as it is valid in the state where it was entered into, but that is not true for same sex couples. That is why a story this weekend in the USA Today suggested that all local LGBT newlyweds visit a New York estate planning attorney when they get back from their honeymoon. The main reason is that complications remain for these couples because the federal government will continue treating them as two economic units. This presents these married couples with financial planning complications.
Married same sex couples will still be denied the over one thousand federal benefits automatically given to heterosexual married couples. As a result, transferring assets from one spouse to another is not as seamless or certain for LGBT newlyweds. For example, even after the passage of marriage equality in New York, married same-sex spouses cannot pass assets upon death to the other without an estate tax bill nor do they have a right to the other spouse’s Social Security benefits.
The United State Senate held hearings last week on a new piece of legislation known as the “Respect for Marriage Act” that would repeal DOMA. If enacted, the measure would return the federal government to its usual position of recognizing as married all couples who are treated as married by their individual state. While the bill is seen as having strong support in the United States Senate there is more vocal opposition in the House of Representatives. No matter what, all same-sex couples will need to be alert to possible changes in the coming years to ensure their estate plans adequately account for the current legal landscape.
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