Los Angeles estate planning attorneys just got very busy. In one fell swoop, the U.S. Supreme Court threw out the Defense of Marriage Act and shot down Proposition 8 in California. Gay couples who reside in the state now can marry and gain federal financial benefits that were once denied to them.
The high court's dual decisions have a tremendous, positive impact on estate planning for married gay couples. Partners who had gone to legal extremes to try to preserve assets for a loved one can rest a bit easier knowing that protection under federal and most state laws include them.
Some members of the gay community will not benefit from the justices' ruling -- same-sex partners who choose not to marry and, in part, couples living in states where gay marriages is still unrecognized, banned or both. Thousands of altered federal laws will apply to married same-gender couples even in states without legal gay marriage.
How far did gay married couples go to save their partners from heartache and extraordinary expenses in estate planning? A 65-year-old gay man in Pennsylvania - one of over 30 states that do not allow gay marriage - formally adopted his 73-year-old partner. Without adoption, the partner could have been on the hook for a 15 percent state inheritance tax. With adoption, the now-legal heir will be responsible for a four percent tax on the estate.
California gay couples no longer have to go to such unusual lengths to provide for one another during incapacity or after death. Everything from wills and trusts to income and estate tax breaks and end-of-life medical decisions changed for gay couples when DOMA and Prop 8 died.
California estate planning attorneys have anticipated the changes in the laws at the state and federal levels. Lawyers are prepared to help gay couples create and update estate planning documents to care for their newly-legal loved ones.
Source: abcnews.go.com, "Gay Man Adopts His Partner to Avoid Inheritance Tax" Susan Donaldson, Jun. 28, 2013