Since the Supreme Court's 2015 ruling in Obergefell v. Hodges, same-sex marriage has been recognized in all 50 states. This landmark decision granted married LGBTQ+ couples the same federal and state rights as heterosexual couples—including key tax and estate planning benefits.
But with those rights comes responsibility: if you’re married, now is the time to make sure your financial and legal plans reflect and protect your union. Whether you're newly married, have been together for decades, or are just beginning the planning process, here are some essential tax and estate planning strategies for married LGBTQ+ couples.
1. Take Advantage of the Unlimited Marital Deduction
The unlimited marital deduction allows you to transfer assets to your spouse during your life or at death without incurring federal estate or gift tax. This can dramatically reduce your taxable estate and provide flexibility in planning.
2. File Taxes Jointly—But Weigh the Pros and Cons
Married LGBTQ+ couples can file taxes jointly, which often results in lower overall tax liability. However, in some cases, such as when both spouses earn high incomes, the marriage penalty could kick in.
3. Establish or Update Your Estate Plan
Without an estate plan, state laws determine how your assets are distributed—and this might not align with your wishes. While legal marriage offers default protections, customized estate plans offer control and clarity.
Key documents to consider:
Wills and/or Revocable Living Trusts
Durable Power of Attorney
Healthcare Proxy / Advance Medical Directive
HIPAA Authorization
Beneficiary Designations on life insurance, retirement accounts, etc.
4. Use Portability to Double the Estate Tax Exemption
Married couples can take advantage of estate tax portability, which allows a surviving spouse to claim any unused portion of their deceased spouse’s federal estate tax exemption. In 2025, the exemption is scheduled to drop significantly, so smart planning now can help preserve future tax savings.
5. Review and Coordinate Beneficiary Designations
Assets like 401(k)s, IRAs, and life insurance pass outside your will, directly to named beneficiaries. Failure to update these can result in unintended distributions—especially if you had previous partners or workaround trusts from before marriage recognition.
6. Consider Lifetime Gifting Strategies
Married couples can gift-split, doubling the annual exclusion amount (currently $18,000 per recipient, per year in 2024). This can be a tax-efficient way to reduce your estate while helping loved ones now.
7. Protect Blended Families or Nontraditional Arrangements
Many LGBTQ+ families involve stepchildren, non-biological children, or complex family dynamics. Estate planning is essential to legally protect all members of your chosen family—especially if you want to provide for individuals who might otherwise be excluded under default inheritance laws.
Final Thought: Planning Is an Act of Love
Tax and estate planning isn’t just about documents and numbers—it’s about protecting your spouse, honoring your wishes, and creating a legacy. While marriage equality has removed many legal barriers, proactive planning ensures you make the most of the benefits you’ve earned.
Whether you’re just getting started or updating an old plan, we’re here to help you create a strategy that reflects your values, protects your family, and adapts as your life evolves.
Ready to Schedule a Meeting?
Click here or the photo below to schedule an in-person, virtual, or phone call meeting.
We look forward to working with you!
