Same-sex marriage is still not recognized in all 50 states, but by the end of the month that could all change. The U.S. Supreme Court is expected to weigh in on whether same-sex couples have a constitutional right to marry or whether current state bans against same-sex marriage will remain in place. How the ruling will impact the LGBT community is yet to be fully determined. However, I expect that this ruling will finally open the doors to a broader understanding of the many financial challenges that same-sex couples have faced when financially planning for their future.
No doubt the face of financial planning will be much impacted by the ever-growing presence of legally recognized same-sex married couples and families across the country. In many ways it will be simpler, but in others more complex. In order to win the business of this $830 billion investment market, many financial planners have a lot of catching up to do on the financial planning realities of same-sex married couples and families. As someone who has experienced these challenges first-hand, I think it's important for families to understand the implications for their financial plans and how they can best prepare for the future.
If the Court rules to recognize these unions across the U.S., there will be a number of financial considerations that same-sex couples will want to look into:
- Extension of Healthcare: Spouses (and children) in same-sex marriages will be eligible for healthcare insurance that is provided by their spouse's employer.
- Tax Implications: Couples will be able to file federal tax returns using the "married filing jointly" or "married filing separately" options in order to receive spousal tax breaks and benefits. However, it is important to understand the financial implications of filing jointly, so couples may want to consult a tax advisor to help them make the best choice for their unique situation.
With or without full marriage equality, there are still many in the LGBT community who have yet to catch up to the many benefits of financial planning. As their unique challenges become more understood by the industry, no doubt many innovative financial services will surface to try and meet their needs.
For couples needing help with planning, Lambda Legal offers a variety of resources designed to help same-sex couples navigate what are often difficult financial matters.
TD Ameritrade, Inc., member FINRA/SIPC. Stock investing is subject to risks, including risk of loss. Commentary provided for educational purposes only. Past performance of a security, strategy, or index is no guarantee of future results or investment success.
TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.
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