Estate Planning for Legally Married Gay Couples in Florida

Estate planning is essential for every Florida resident, and now that same-sex marriage is legal in our state, it is important for same-sex couples to consider several elements when it comes to their estate planning needs.

First, couples should know that with the downfall of the Defense of Marriage Act, couples in states that have legalized same-sex marriage like Florida are permitted to make marital deductions against their estates. What this means is that they can transfer or gift an unlimited amount of their personal assets over to their spouses without incurring gift or estate taxes, both during their lifetimes or after death.

Couples should also keep in mind the portability clause, which allows for an estate-tax benefit of immunity from federal estate taxes up to the first $5.34 million. What that means is that if your estate is valued at less than $5.43 million, you will not have to worry about it getting hit with any kind of federal estate taxes, which — before the portability clause — used to represent a significant portion of any given estate.

Finally, legally-married gay spouses now have the ability to roll over the individual retirement accounts and 401(k)s of their deceased spouses. For example, someone whose deceased spouse owned a $400,000 IRA account will be able to rollover the money from their spouses IRA and combine it with their own. This way the money will continue to rise tax-free until the remaining spouse reaches the age of 70.5.

There are other considerations for lesbian, gay, bisexual and transgender couples to keep in mind when planning their estates. Ultimately, just like any married couple — LGBT or different sex — couples will have their own unique family situations that must be addressed within their personalized estate plans.

Source: Forbes, “Estate Planning Advice For LGBT Couples,” Holly Hanson, June 10, 2015