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SCOTUS decision will affect the (financial) ties that bind

While we discussed the impact of the Supreme Court's decision in Obergefell v. Hedges in our July 3, 2015, post, we know that legal experts are still determining the full range of legal issues the ruling will affect. The newly married same-sex couples will learn that marriage comes with many  legal benefits -- including the employer-sponsored benefits we talked about last time -- and just as many legal obligations.

For the past two years, Minnesota's same-sex married couples have been dealing with changes that same-sex married's in the 14 states directly affected by the ruling will soon begin to understand: Their new or newly recognized status will translate into more complicated finances. Research has shown that financial troubles are among the most common reasons that couples divorce. If these couples understand how marriage will affect their finances, they may be able to avoid confusion and discord down the road.

For example, the 2013 Supreme Court decision in U.S. v. Windsor made it possible for same-sex marrieds to file joint federal tax returns. The states where same-sex marriage was not recognized responded with their own rules, some more complicated than others. With Obergefell, that stressor will disappear.

Gift restrictions (tax thresholds) between the spouses will also go away. As legal spouses, same-sex couples will no longer be limited to $14,000 transfers. The estate tax that an unmarried heir or beneficiary would have to pay will not apply to a surviving spouse.

The change in status from heir or beneficiary to surviving spouse also affects Social Security benefits. Remember, a surviving spouse whose benefits are lower than the deceased's will receive the higher amount.

Of course, any positive that comes with marriage may become a source of contention if the marriage breaks up. Second marriages may also be complicated by this new financial relationship. Careful planning, with the assistance of an experienced professional, can make the process easier for all couples, whether they are planning to marry or are already married.

Source: Accounting Today, "Supreme Court's Same-Sex Marriage Ruling Has Major Tax and Financial Planning Implications," Michael Cohn, June 29, 2015

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