Financial benefits to same sex couples in Supreme Court ruling
For those awaiting results in major U.S. Supreme Court cases, this past week turned up at least two of major significance – one affirming health insurance marketplaces under the Affordable Care Act (Obamacare) and another finding a constitutional right regarding same sex marriage.
Same sex marriage has been the subject of prior columns here, one on July 2, 2013 and another on June 3, 2014. Tip: You can check out our website at www.collitonlaw.com and scroll down to the search box and read them. The road to finding a constitutional right followed a three step journey. The first decision was United States v. Windsor, that found the federal Defense of Marriage Act (DOMA) refusing recognition of same sex marriages by the U.S. government to be unconstitutional. Windsor, however, was a federal tax case and only related to those marriages that were accepted in the state where the couple resided. Edith Windsor and Thea Spyer were married in Canada and resided in New York, a state that had accepted same sex marriage.
The second step for Pennsylvanians was the case of Deb Whitewood v. Michael Wolf, Pennsylvania Secretary of Health (not to be confused with Tom Wolf, at that time Democratic candidate for Governor), which raised directly whether prohibition of legal recognition of same sex marriage was constitutional. Judge John E. Jones, III, a Judge in the U.S. District Court, Middle District of Pennsylvania, in 2014 struck down what commonly were referred to as the Pennsylvania “Marriage Laws,” those sections of the Pennsylvania Domestic Relations Code which limited marriage to members of the opposite sex and also prohibited recognition of same sex marriages entered into in jurisdictions other than Pennsylvania. The Commonwealth did not appeal. Following Whitewood, Pennsylvanians could both enter into same sex marriages here and have marriages performed elsewhere recognized by the State government.
This left only one issue to be resolved for many Americans and that was whether a marriage performed in a state where the marriage was valid would be recognized in a state where same sex marriage is not permitted. In other words, if a Pennsylvania couple moved to say Georgia, would the marriage still be considered valid in that State. The case decided on June 26, 2015, Obergefell v. Hodges, found a federal constitutional right to same sex marriage which meant that the prior situation where a person could be married for one purpose in one state but not for another purpose or in another state would no longer apply.
One of the major areas where the new decision will make a difference is in the area of Social Security. Husbands and wives have a complicated benefit relationship under Social Security and Obergefell, although the decision related to acceptance of a spouse on a death certificate, actually opens the door for Social Security benefits both for spouses claiming on each other’s records and to children of the spouses in states that had not recognized same sex marriage.
In deciding whether to marry, now the same considerations apply to same sex couples as to heterosexual couples. Tax planning, titling of assets, estate planning, beneficiary designations, pre-nuptual and post nuptial agreements all need to be considered as well as the responsibilities that the parties assume each to the other including the possibility that one of them may become seriously ill. Many of the results of being married, however, are positive. I wrote about some of them before.
Pennsylvania Inheritance Taxes. The difference between being married for Pennsylvania Inheritance Tax purposes and being single is huge. Inheritance by an unrelated individual would be at the rate of 15%. Spouses inherit at the rate of 0% so one immediate effect for estate planning purposes is a savings of 15% of the estate.
Joint Tenants With Right of Survivorship vs. Tenants by the Entireties. Married couples can own property as tenants by the entireties, a form of ownership that can provide additional creditor protection. Same sex couples who have titled real estate as joint tenants with right of survivorship, for example, might want to consult an attorney or other professional to transfer title to reflect tenants by the entireties.
Social Security and Veterans Benefits. Spousal benefits can now apply both as to Social Security and Veterans benefits.
Joint Tax Returns. Same sex couples have the right to file tax returns as married filing jointly or married separately.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.