Cases affect planning for gays

Jun 23, 2013 @ 12:01 am

By Liz Skinner

The Supreme Court could throw out the federal law that bans gay marriage as early as today in one of two decisions due from the nation's top court in the coming days involving same-sex marriage.

The 1996 federal Defense of Marriage Act, which states that a marriage must be between one man and one woman, makes it impossible for same-sex couples who were legally married by their state to receive federal income and estate tax deductions that married couples enjoy, as well as other benefits, such as Social Security spousal and survivor benefits.

PROPOSITION 8

The second case revolves around the question of whether a state has the authority to allow or ban gay marriage, centering on California's Proposition 8 law: a voter initiative that requires that a marriage be between a man and a woman.

Supporters of gay rights had hoped this California case would result in the outlawing of state provisions banning same-sex marriage, but most legal experts believe that the justices are not ready to take the issue that far.

If the court rules in favor of same-sex marriage, financial planning options could change for same-sex couples, and most legal and financial experts think the decisions will provide about 1,100 federal benefits just for those who live in the 12 states and Washington, D.C., where gay marriage is legal. The Census Bureau estimated that there were 646,000 same-sex-couple households across the country in 2010.

“For couples who got married in one of the 12 states [that allow same-sex marriage] or D.C., they could now do estate planning like heterosexual couples,” said Janis Cowhey McDonagh, an estate and trust specialist, and East Coast leader of the lesbian, gay, bisexual and transgender practice for Marcum LLP.

Gay marriage is legal in Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington and Washington, D.C. Most other states prohibit it in their constitution or have passed laws against it.

lskinner@investmentnews.com Twitter: @skinnerliz

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