One of the bigger Supreme Court decisions in recent years was that of Obergefell v. Hodges in which the court found it unconstitutional to ban same-sex marriage. The decision was announced a little over a year ago, and since that time, many, many articles have been written about the implications of the decision on financial planning for gay couples. However, in our experience, financial decisions and changes often get pushed down the to-do list. Because of this, we thought it would be useful to revisit the impact of Obergefell v. Hodges in the event the decision impacted you and your spouse (or spouse-to-be) and you haven’t gotten around to considering what changes, if any, you might need to make. Here are 7 things to consider if Obergefell v. Hodges affects you (with a few links we think are helpful).

Obergefell v. Hodges

1. Simplify your estate plan. Prior to the Obergefell decision, LGBT estate planning required utilization of more complex planning techniques in order to ensure assets would pass to the surviving spouse without being challenged by family members. Trusts that were created solely for this purpose are now no longer necessary, so it may be useful to revisit an estate plan that used these strategies to see if it might be possible to simplify things.

2. Consider your tax filing status. Married same sex couples can now choose ‘married filing jointly’ for their filing status on both federal and state returns. If you continue to file separately, you might find that married filing jointly will lower your tax bill. Work with your accountant or tax planning software to determine which option minimizes the total tax bill for you and your spouse. This article offers a good overview of the different filing statuses.

3. Understand social security benefits. The amount you receive in social security can be impacted by your spouse’s social security benefits, particularly if your spouse has historically earned a good deal more than you. These spousal benefits can make a big difference in retirement, so make sure you understand the impact for you. The Social Security Administration offers information on spousal benefits here.

4. Healthcare coverage. If an employer healthcare plan covers spouses, same sex spouses can now request that coverage. Compare spousal coverage to your own to see if it offers better coverage, a lower cost or both. Some companies previously offered domestic partner coverage, but with legalization of same sex marriage, many employers are moving away from that offering.

5. Dealing with retirement plans. Spouses who are beneficiaries of retirement plans have greater latitude than non-spousal beneficiaries when it comes to inheriting those assets or receiving the assets through divorce. In the former case, a spouse may simply retitle the assets in an IRA in his or her name, and avoid having to take distributions until age 70.5. For younger spouses, this can result in delaying taxes on withdrawals for years. As for divorcing spouses, if they are awarded a portion of a retirement plan through a Qualified Domestic Relations Order (QDRO), such distributions are not taxable.

6. Veteran and military benefits. Spouses of service members and active duty military who are deceased or have become permanently disabled due to a service related incident are eligible for a number of services and benefits.

7. Save more. Subject to certain limitations, non-working spouses may still make contributions to traditional IRAs or Roths if the working spouse has earned income.

If you were impacted by the Obergefell decision but haven’t revisited your plan to determine how it impacts you, start with the list above and you may find that it makes a real, positive financial impact for you and your spouse.

Are you a same sex couple looking for an Intown Atlanta financial planner to help you sort through what the Obergefell decision means for you? Minerva Planning Group would be happy to answer your questions. Contact us today.