Though the United States Supreme Court struck down the Defense of Marriage Act, Section 3, over a year ago, giving the same federal rights to same sex couples, clarity over many issues still remains problematic.
Those issues include estate planning, financial planning, taxes, social security benefits, and housing. How each of these impacts same sex couples is quite unclear.
More states, including Florida, have enacted laws which give LGBT couples rights enjoyed by heterosexual couples. In the Sunshine State, more progress is being made on the marriage equality front; but, even if such a measure did pass, it leaves many other questions.
Same Sex Couples’ Planning Unclear
Gay investors continue to struggle with the evolving legal landscape, according to a recent study conducted by Wells Fargo. The study reveals that a full 83 percent of LGBT participants reported they don’t completely understand how new federal and state laws apply to their relationships, especially in the matter of estate planning.
Of all the survey participants, 67 percent were currently in legal same-sex marriages. However, what’s most troubling about the study is that 40 percent of LGBT investors stated they believed the federal government would treat any state’s sanctioned domestic partnership or civil union as a marriage. That, though, is not the case, because civil unions and domestic partnerships are not marriages.
Over the course of the past year, estate planning for LGBT couples, as well as individuals, has been quite monumental. Though this phenomenon only serves, in some cases, to add to the confusion of planning, further complicating the matter is differences in state laws.
Though the U.S. Supreme Court did strike down Section 3 of DOMA, it did not address Section 2 of the act, which provides individual states with the ability to define marriage under their own state law.
Confusion Remains in Florida and Other States
Currently, there are nineteen states, the District of Columbia, and the federal government all recognize same sex marriage, which gives those couples the same rights and benefits as heterosexual couples under state and federal law. However, the remaining thirty-one states, which include Florida, only have a confusing hodgepodge of state and federal rules which are not at parity. These disparate patchworks of such laws affects not only planning, but taxes, and other essential aspects of life for same sex couples.
The Wells Fargo study also examined why LGBT marriages occurred after part of DOMA was repealed, looking at such things as estate planning, housing, and taxes. The survey revealed that 62 percent of same sex investors thought their financial needs to be completely different from their heterosexual counterparts. Of the participants, 36 percent stated they married to embrace the legal and financial rights. Conversely, of the heterosexual participants surveyed, only 8 percent responded with the same reasons.
Florida No Tropical Tax Paradise for Same Sex Couples
Though the sunshine and weather is beautiful, the state of Florida, without legally recognizing same sex marriage, forces gay couples into filing taxes as singles. That means, the surviving partner in a relationship is still required to pay inheritance taxes in many states, something heterosexuals are exempt from paying.
Even though Florida does not have an explicit inheritance tax, depending on the amount of the estate and the ownership of a residential property, there might be other financial implications.