Social Security Benefits for Same-sex Couples – Officially, still un-official

The bureaucracy continues to move slowly in regards to Social Security benefits for same-sex couples. The various government agencies and departments continue in a state of chaos as they try to understand the implications of the Supreme Court’s ruling on the Defense of Marriage Act (DOMA). Presently, the Social Security Administration is studying the ruling in light of applicable law with the Justice Department.

The Social Security Administration’s response to the DOMA decision falls into two broad categories. Category A individuals are same-sex couples, who were married in a jurisdiction which recognizes same-sex marriage. The jurisdiction may be in another country, like Canada, or in one of the 13 states which recognize same-sex marriage.  Additionally, Category A individuals must also reside in one of the 13 states which recognize same-sex marriage.  If both of these criteria are met, than the spouse is eligible for Social Security survivor and retirement benefits.

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Financial Planning for Same-Sex Married Couples

Author’s note: While this article is longer than I normally post, the material is very timely and needs to be presented in its entirety. It is scheduled to be published in the September 2013 issue of The Tax Adviser. For further discussion and information, you can contact me at hello@ttillery.com.

According to the 2010 U.S. Census, there are more than 130,000 married, same-sex couples in the United States. Presently, they have the right to marry in 13 states and the District of Columbia. Up to now planning for our clients in same-sex marriages has been a “belt and suspenders” approach.

We addressed their issues with “layers” of planning: revocable living trusts, limited liability companies, management trusts, grantor retained income trusts (GRITs), IRA trusts, and the like. Though these same-sex couples did not have the same benefits as traditional married couples, we were able to come reasonably close to those benefits with appropriate planning. This column will provide practitioners with an overview of the the impact of the recent decision by the Supreme Court striking down the Defense of Marriage Act (DOMA), P.L. 104-199; a preliminary checklist of areas to be addressed with same-sex clients; and a listing of additional resources.

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