The Scope of Financial Planning for Same-Sex Couples
The financial landscape has evolved rapidly in the past decade, especially for same-sex couples. Since the United States Supreme Court legalized marriage between same-sex couples in 2015, there have been numerous financial considerations and implications for this group of people. Financial planning is essential for everyone, but same-sex couples face unique challenges that necessitate an in-depth comprehension of their legal and financial footing. This is why financial planning for same-sex couples is a focal area of our services at DeFreitas & Minsky LLP.
Raising Awareness of Financial Planning Needs for Same-Sex Couples
Despite victories in the sphere of marriage, the lack of education about the unique challenges surrounding financial planning for same-sex couples persists. According to the National Credit Union Administration (NCUA), 46% of same-sex couples are unaware of the potential financial benefits they could be obtaining from tailored financial advice. Our purpose at DeFreitas & Minsky LLP is to alleviate these information gaps and assist same-sex partners in creating a holistic and bespoke financial plan.
Income Tax Considerations
One of the areas that have seen significant changes since the legalization of same-sex marriage is income tax. Before the landmark 2015 case of Obergefell v. Hodges, same-sex partners were largely treated as separate entities for tax purposes. Today, however, legally married same-sex couples enjoy the same federal income tax advantages and disadvantages as their heterosexual counterparts.
These benefits include, but are not limited to:
- Joint Income Tax Filing
- Spousal Pension Rights
- Marriage Bonus or Penalty
Estate Planning Differences
The post-2015 environment presents more united estate planning possibilities for same-sex couples. Estate planning aims to ensure the optimal distribution of an individual’s wealth after his or her death. With marriage equality in place, same-sex couples can now pass unlimited assets to their spouse upon death without triggering the federal estate tax. This spousal exemption was not available to same-sex couples before the marriage equality ruling.
Retirement Benefits
The Social Security Administration (SSA) asserts that more than 60 million Americans received Social Security benefits in 2020. For same-sex couples, the opportunity to receive retirement, disability, and survivor benefits has been accentuated with marriage equality. To illustrate, a lower-earning spouse can claim benefits based on the higher-earning spouse’s work record—an advantage not formerly available to same-sex couples.
Navigating Healthcare Benefits
Healthcare is another critical piece of the financial puzzle. It is crucial to analyze healthcare plans when taking financial planning measures. Notably, same-sex couples can now be added to employer-provided health plans, significantly impacting their overall financial planning strategy.
Creating a Financial Plan: Interesting Statistics
A highly tailored financial plan is essential to address the particular questions same-sex couples might have. Following are some interesting statistics that shed light on why a specialized approach is necessary:
- 54% of LGBT adults express concern about being able to save enough for retirement, according to the Aegon Retirement Readiness Survey 2018.
- As per the Movement Advancement Project (as of 2020), nearly half of LGBT adults have a child, boosting the importance of college savings schemes in their financial plans.
- The cost of healthcare is a significant concern, with 29% of LGBT adults postponing medical treatment due to cost as per Center for American Progress 2020 report.
Moving Forward with DeFreitas & Minsky LLP
At DeFreitas & Minsky LLP, we understand the nuances of financial planning for same-sex couples. With a comprehensive appreciation of legal progress and its implications, we are committed to assisting same-sex couples in creating a financial plan that addresses their unique circumstances and future objectives.
We never underestimate the importance of individualized service. Our expertise, paired with a deep sense of empathy, allows us to guide our clients toward achieving their financial aspirations.
Remember, financial planning is not a linear process. It is a dynamic and continually evolving journey. Our team at DeFreitas & Minsky LLP is here to assist you every step of the way in this journey towards your financial security and success.
