IL Estate Planning Blog

Tuesday, October 18, 2016

Planning for Same-Sex Couples

Excerpts taken from WealthCounsel Quarterly Volume 10 Issue 2 by Scott Squillace, JD



Putting aside love, commitment, societal, family and religious issues - what are the legal and tax issues a same-sex couple should consider in making the decision to marry?



1. Taxes

  • Ability to file jointly on income tax (but watch community property states and the "marriage penalty")
  • Deductibility of alimony from income in case of divorce
  • Ability to transfer money and property to spouse during life and after death without tax consequences
  • Possible tax refunds for past returns and for employer related health benefits
  • Health insurance benefits no longer imputed income
  • Deceased Spousal Unused Exclusion (DSUE) raises the amount excluded from estate tax of a married couple's estate to $10.9 million, as opposed to 5.45 million for an individual

2. Real Estate

  • Capital gains from the sale of a primary residence exclusion amount increased from $250k to $500k for married couple
  • Garn St. Germain Act - Due on Sale Clause not triggered by funding primary or secondary residence into a revocable living trust

3. Social security, including retirement, disability and SSDI

4. Medicaid planning - But maybe other strategies available?

5. Private pension/retirement plans

6. Federal employee benefits

7. Military personnel & veteran's benefits

8. Immigration - Green cards now available for non-citizen same-sex married couples

9. Bankruptcy - Spouses can now file jointly, instead of separately, to save on filing fees

10. Copyright revision



1. Income Tax (possible "marriage penalty" for higher income earners)

2. Limit on home mortgage interest deduction (up to $1 million mortgage - single or couple)

3. Medicaid (spousal impoverishment)

4. Family Attribution Rules - IRC

5. Bankruptcy

  • Married couples can become co-obligors of his or her spouse's debts

6. Student Loan Eligibility

7. Family attribution for political contributions

8. Family attribution for ethics rules for political office and governmental appointments


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