There are many areas in which the recent legal developments have meant big changes for the LGBT community. In fact, just due to the fall of DOMA alone, there are 1,138 federal laws and protections that are now afforded to the LGBT community. That’s a staggering number, and evidence of progress indeed. In the following article, you will see a high-level overview of the most common questions that come up in dealings with non-traditional clients, as well as brief answers to get you started. Obviously, there are many variables that can change answers for each individual person and each family unit, so it’s important that you take into account your client’s individual situation before you proceed.
At the time of this writing, same-sex marriage is currently legal in over 70 percent of the states. There are also gray areas where some states have had their gay marriage bans ruled unconstitutional, and are working through various appeals.
Social Security and Medicare
With the death of DOMA, legal state-administered same-sex marriages are now recognized by federal programs such as Social Security and Medicare. Now your client can access partner benefits in a way that they wouldn’t have been able to before. Not only is it plainly fair — they have been paying into these systems as taxpayers regardless of their ability to take advantage of marriage — but it will no doubt improve some of the issues that elderly people in the LGBT community face as they age and need assistance via partner benefits. Social Security and Medicare recognize trans-spouses, as well.
Much like the benefits above, now that DOMA and the “don’t ask, don’t tell” policy are gone, if your clients are married, they can access their spouse’s military benefits if they are serving or are a veteran of the armed services. Not only can they now serve without fear of being dishonorably discharged or otherwise forced out, they can live openly together with military assistance as other military families have done for years.
Federal and state tax benefits
Just by changing their tax status to “married filing jointly,” they can save thousands of dollars. We now have more choices in tax planning, and this is obviously something that ties into long-term financial planning as well.
Legal titling to assets
In the past, LGBT partners were unable to access retirement funds and pensions as heterosexual spouses could have. There are considerable taxation consequences for inheriting an investment vehicle from someone other than a spouse. Now, legally married LGBT spouses can have the proper access to these funds, both while their spouse is living or deceased, via direct rollover rights and the requirement they be named as primary beneficiary unless they sign approving otherwise.
Ability to gift money