The U.S. Supreme Court ruling striking down key provisions of the Defense of Marriage Act has had a snow-ball effect—all of it positive for same-sex couples.
Not only has the DOMA decision availed gays and lesbians of federal marriage protections. The ruling has spurred more states legislatures to legalize same-sex marriage. And in states where lawmakers remain resistant to change, the decision has underpinned state court rulings permitting such marriages, or overturning existing state laws forbidding them.
Now comes as an IRS Revenue Ruling 2013-17 that, as this WealthManagement.com report indicates, avails same-sex couples of the gift tax and estate tax marital deductions in states that have legalized same-sex marriages. Upshot: Same-sex couples can use today’s higher combined $10.68 million marital estate tax exemption.
If the life insurance death benefits plus the value of their other assets fall below this exemption level, then couples can dispense with a trust administrator for purposes of owning life insurance. They need only transfer money to each other free of the gift tax to pay life insurance policy premiums.
That’s good news, indeed, for same-sex couples looking to simplify, and reduce the cost of, estate planning.