As a result of the Supreme Court’s Obergefell decision, same-sex couples living in all 50 states are now entitled to the same spousal rights and protections that apply to other couples. While same-sex couples had already been afforded the same federal tax benefits available to other couples, Obergefell ensures that they will receive state law spousal benefits as well.
Under Alabama law, these benefits include:
- Inheritance as a spouse if a spouse dies intestate (without a Will).
- Priority to serve as Personal Representative of an estate if the spouse dies intestate.
- Eligibility for a spousal allowance from a spouse’s estate.
- Recognition as a spouse in adoption or child custody proceedings.
- Spousal priority in dealing with an incapacitated spouse’s care or in guardianship or conservatorship cases.
Tax benefits resulting from Obergefell and the Windsor case that preceded it in 2013 include:
- Qualification for estate and gift tax marital deduction for property transferred to a spouse.
- Ability to carry over a spouse’s unused estate tax exemption to the surviving spouse’s estate.
- Taking advantage of spousal rollover for IRA benefits.
- Filing joint income tax returns for both federal and state income taxes.
Even with these dramatic changes, proper planning for all couples, not only same-sex couples, is crucial to ensure that a person’s wishes are carried out in case of incapacity and at their death. Rather than allowing state default rules to control, estate plans need to be reviewed to take advantage of new benefits and also to ensure that there are no unintended consequences as a result of the new law. Couples should also consider entering into prenuptial agreements prior to marriage to protect inherited or business property in case of divorce or at death.