The tax filing deadline of April 15 has come and gone, a fact that serves as a reminder that same-sex couples should not neglect some estate-related tax matters.
Among the most important benefits that same-sex couples will be able to realize under federal law is the spousal exemption from estate taxes. However, it is also important to keep in mind that, just like heterosexual couples, married same-sex couples will also be entitled to the exemption for nonspousal bequeathals — currently $5.43 million per individual and $10.86 million for legally married couples — as well as portability.
Portability entitles a surviving spouse to the unused portion of their deceased spouse’s federal exemption amount. Even if a surviving spouse is not required to file a federal estate tax return, he or she should consider filing one in order to qualify for portability.
Under federal law, married same-sex couples are also entitled to take advantage of year-end gift-splitting, which allows one spouse to use the annual gift tax exclusion amount of the other spouse in order to split gifts to loved ones, children or other persons the spouses choose. The 2015 annual gift tax exclusion stands at $14,000.
If for any reason an estate paid taxes on the portion of the estate that a same-sex spouse inherited, he or she should file a claim for a refund from the federal government. Whether or not such circumstances arise, it is always prudent for a married same-sex couple to seek legal counsel from an experienced estate-planning attorney, who will be able to help them with the aforementioned issues and all other useful and relevant choices for estate planning.