7 Ways LGBT Couples & Modern Families Benefit from Same-Sex Marriage
Wealth manager reviews the many financial and legal advantages
Advocates for lesbian, gay, bi-sexual and transgender couples and modern families are adding another victory to their list, with 36 states, along with Washington D.C., to allow marriage among same-sex couples.
A critical turning point came in October last year, when the Supreme Court chose not to hear appeals against lower court rulings that had overturned same-sex marriage bans in five states. Despite actions such as Indiana’s recent Religious Freedom Restoration Act, which would allow businesses in the state to refuse service to the LGBT community, the tide has been swift and overwhelmingly in favor of gay rights.
“I’ll always remember June 26, 2013 – the day that the Defense of Marriage Act was ruled unconstitutional by the United States Supreme Court, effectively breaking down the major door standing between LGBT couples and marriage equality,” says financial professional Holly Hanson, founder and principal of Harmony Financial Strategies, www.harmonyfinancial.com, a firm that, in part, focuses on the needs of the LGBT community. “As a member of the LGBT community, the day is etched forever in my mind.”
“Naturally, a lingering suspicion remains in the back of our minds, ‘Is it too good to be true?’ And, despite the positive direction the country is taking toward same-sex couples, there remain many practical concerns regarding laws and finances.”
Hanson, author of “The LGBT and Modern Family Money Manual,” touches on benefits that have become available recently to millions of Americans.
• Social Security and Medicare: In states where same-sex marriage is legal, LGBT couples have access now to federal programs such as Social Security and Medicare.
“Not only is it plainly fair – we’ve been paying into these systems as taxpayers regardless of your ability to take advantage of marriage – 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,” she says.
• Military Benefits: Not only can same-sex couples now serve without fear of being dishonorably discharged or otherwise forced out, we can live openly together with military assistance as other military families have for years.
• Federal and State Tax Benefits: Just by changing your tax status to “married filing jointly,” you 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.
• Ability to Gift Money: Spouses can make monetary gifts to one another free of taxation. However, in the past, an LGBT couple would have had to pay gift tax on anything more than $14,000 (the current limit as of 2014). If I wanted to buy my wife a car, for example, that asset would have been subject to the gift tax. Not so anymore.
• U.S. Visas for Same-Sex Couples: In the past, many LGBT couples would be ripped apart by forced deportation once visas ran out.
“My wife is a Swedish national, and now that we are legally married, I can sponsor her permanent residency in the United States,” Hanson says.
• Parenting Rights / Family Planning: Second-parent adoptions have undoubtedly been smoothed over by the fact that it’s now easier to get a legal same-sex marriage in many states. Not all states in the U.S. have the same laws, so it’s recommended you attain the appropriate paperwork.
“Of course, there are millions of other Americans who, currently, do not have access to these and other benefits,” Hanson says. “Fortunately, those states are becoming an ever-receding minority. I think most of us can reasonably expect the possibility of marriage benefits within our lifetimes.”
