Taxes and Estate Planning for LGBT couples in California
Estate planning and the filing of taxes can vary for LGBT couples based on individual factors.
The LGBT community in the United States won their fundamental right to marriage equality in the year 2015 Supreme Court decision of Obergefell vs. Hodges. Since equal marriage rights are enjoyed by LGBT couples, it means estate planning is even essential for them. There are a number of issues which LGBT couples need to take into consideration such as: choosing a guardian for a minor child after death, burial plans (especially for trans-gendered individuals where there is no legal name change), efficient estate planning or making decision for your loved one before death.
Marriage and the LGBT Community
Earlier, LGBT couples had to fight for their rights just to be allowed to do normal things like inheriting property, visiting each other during hospitalizations, and participate in important decision-making, mainly medical. Marriage might have resolved many of those concerns, but other issues continue to existing challenges. The reality is that marriage has still not corrected all the many obstacles that the LGBT community can face where matters of inheritance, incapacity planning, childcare, and other important issues are concerned which require proper estate planning. Comprehensive LGBT estate planning remains the accurate way to ensure that you and your protection have the protections you need in Estates.
LGBT couples face issues such as if they are not married, or cannot get married in their own state, intestate succession laws may leave their partner with no right to your property. For this reason, they need to opt for a marriage.
Same-sex couples also need to find out ways to reduce estate tax burdens. There are a number of ways to tackle for example you and your partner are in a marriage contract, leaving everything to each other, and are stressful that your amalgamated estate may cause the surviving spouse to owe estate tax, you can use the “portability” provision of the tax law, or use a bypass trust to give the alive spouse access to the first spouse’s property, without having that property inserted in his or her taxable estate.
LGBT couples are required to file their federal income taxes like opposite-sex couples. If they got married in a state where gay marriage was legal (including California), and after the 2015 court decision which applies to the entire nation. Married couples must file jointly or as married filing separately, but the vast majority file joint returns. The requirement of proper estate planning and understanding taxes is now important for LGBT couples to consider since their rights are equally treated in California as of opposite sex marriages.