People who are involved in committed long-term same-sex partnerships may or may not have the ability to have their unions legally recognized in the states within which they reside. At the present time Indiana is not one of the states that will allow for gay marriages.
This has some very profound implications on an estate planning level. There is a $5.25 million per person exclusion, but this only applies to asset transfers between people who are not married.
If you are legally married you have an unlimited exemption. You can inherit any amount of money from your departed spouse free of taxation.
Plus, because of the portability of the federal estate tax a surviving spouse has the option of utilizing the exclusion that was due to his or her deceased spouse. This would be in addition to the personal exemption of the survivor, so this individual would have a total of $10.5 million utilizing the 2013 individual exclusion figure of $5.25 million.
For same-sex couples none of the above applies. There is no unlimited marital exemption, and this even applies to people who are legally married because their states allow for it. And, since there is no federally recognized union the portability option is not available to people in committed same-sex unions even if they are legally married in a given state.
If you are not subject to the estate tax there are other details that must be addressed if you are involved in a same-sex union. For a number of different reasons gay people who are interested in making sure that their wishes are carried out should certainly talk things over with a licensed and experienced estate planning attorney.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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