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Marriage Equality Comes to All 50 States

Tax and Estates Alert | July 2, 2015
By: William C. Hussey, II

This past Friday, the Supreme Court of the United States ruled in Obergefell v. Hodges that the Fourteenth Amendment requires all states to license marriages between two people of the same sex. The 13 states that failed to previously ratify marriage among all individuals regardless of their sex will be required to do so when the ruling becomes final in a few weeks’ time.

Like the effects of the U.S. District Court’s opinion in Whitewood v. Wolf that legalized same-sex marriages in Pennsylvania, the estate planning and income tax ramifications for same-sex married couples as a result of the Obergefell decision will vary depending on the couple's state of residence and individual circumstances. For example, whether the federal income tax “marriage penalty” will apply depends upon the relative earnings of both spouses. Unlike Pennsylvania, which has a flat income tax rate, married couples in other states that have a progressive tax system may see an increase in their overall state tax bill as well, since a portion of the couple's joint income may now be taxed at higher marginal rates.

For estate planning (and asset protection) purposes, there is a wide array of tax and other benefits available to spouses that are not enjoyed by other beneficiaries. Therefore, couples should review their current estate plans and meet with their attorney and other advisors to discuss the newly available options if they have not already done so in contemplation of the eventual full recognition of their marriages.

The Obergefell ruling may have important implications for other persons and entities as well, such as in the employment, human resources and benefits area, discussed here. Therefore, please feel free to reach out to the attorneys at White and Williams to discuss whether this latest decision may impact you or your business if you have any questions whatsoever.

If you would like to discuss how any of these changes may affect your income or estate tax planning, or have any other tax or estate planning questions, please contact Bill Hussey (215-864-6257; husseyw@whiteandwilliams.com), or Kevin Koscil (215-864-6827; koscilk@whiteandwilliams.com).

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
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