By: Barry E. Haimo, Esq.
April 5, 2018
11 Things Florida Same-Sex Couples Need to Know about Estate Planning
When the U.S. Supreme Court issued its landmark decision granting the right of same-sex couples to marry in 2015, it also gave same-sex couples a wide range of benefits they had long been denied. Many are related to estate and asset protection planning, so it’s important for same-sex married couples to be aware of these benefits.
1. Unlimited Marital Deduction
Same-sex couples can gift an unlimited amount of assets to each other during life or upon death without triggering tax or a reduction in estate or gift tax exclusion.
2. Gift Splitting
If you would like to give a child or other loved one money, you can now combine your individual allowances to double your total gift tax exemption. Put simply: you can give more without the tax consequences. You just have to file a gift tax return form 709 if you do so.
This is crucial for very large estates. With portability, your spouse can inherit your unused federal estate tax exemption. The 2018 estate tax exemption has not been indexed for inflation, but it is expected to be around $11.2 million per individual. If the surviving spouse elects for portability, this amount can be doubled to an estimated $22.4 million!
4. Retirement Accounts
Upon death of a spouse, the surviving spouse can roll over the deceased spouse’s IRA into his or her own deferring taxes considerably and without a required minimum or lump sum distribution.
Also, if the surviving spouse is younger than 59 ½ years old but the deceased spouse was over that age, the surviving spouse can keep the account in the deceased spouse’s name and take withdrawals without the 10% penalty. If you choose this option and your deceased spouse was over 70 ½ at the time of death, it’s important to note that you must take the required minimum withdrawals by December 31st of the following year.
5. Social Security Benefits
Married same-sex couples are entitled to spousal retirement benefits or survivor benefits through Social Security.
6. Florida Homestead
Florida has one of the strongest homestead laws in the United States, enabling you to keep your property safe from most unsecured creditors. As a same-sex married couple, you now both have the right to inherit the homestead property.
7. Right to Own Property as Tenants by the Entirety (TBE)
If you own a property together as TBE, a creditor cannot take the property away from you unless there is a judgment against both spouses. Also, the property automatically transfers to your surviving spouse upon your death, avoiding probate altogether (sometimes called survivorship).
8. Elective Share
Your surviving spouse has the right to claim 30% of your “elective” estate. This right can be eliminated with a pre-nuptial or post-nuptial agreement or by giving your surviving spouse at least 30% in your trust or will.
9. Intestate Inheritance Rights
If you die without a will at all, your surviving spouse will automatically get 100% of your probate assets in most cases under Florida intestate law. It depends on if the deceased is survived by descendants and whether the descendants are also children of the surviving spouse. It’s complicated. See the Florida Statute, Section 732.201.
10. Pretermitted Spouse
If you die before updating your will to include your spouse, this law allows your spouse to inherit as though you died without a will at all, unless the will clearly provided otherwise. See Section 732.301.
Update Your Estate Plan
If you have not engaged in estate planning since the 2015 ruling, you should revisit your plan to take advantage of your new rights. Estate planning helps to ensure you pass along your assets to the intended parties, avoid costly and lengthy probate when possible, and avoid potentially devastating tax consequences.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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