How marriage can financially benefit gay couples

PHILADELPHIA — Financial planners in Pennsylvania are advising their same-sex-couple clients: Get married already!

Gay marriage became legal in the state last year — like New Jersey and Delaware, it's among 37 states recognizing such unions — and that affects retirement planning, Social Security benefits and estate planning.

Financially, there are a lot of benefits when you get hitched.

"By getting married, same-sex couples are now treated equally under state law and would not have to pay the Pennsylvania 15 percent estate tax if one spouse dies," says Brad Bernstein, senior vice president of wealth management at UBS in Philadelphia.

Same-sex couples can take advantage of other estate-planning moves, too:


— Portability. In recent years, President Barack Obama made permanent the portability of a lifetime estate-tax exemption for people with assets of up to $5.3 million.

"If I die, my wife files an estate tax return and elects portability under that exemption," Bernstein says. "When the second spouse dies, the children are federally estate-tax-free as well."

— Social Security survivorship benefits. "We always look at a couple's benefits under Social Security to make sure that when one dies," he says, "the living spouse gets the highest benefit."

— IRA rollovers. If one spouse dies, the other should become the beneficiary of his or her individual retirement account, which can continue to grow in a tax-deferred manner.

— Spousal IRA contributions. If one spouse is working and the other is not, the working spouse can contribute up to $5,500 a year to the nonworking spouse's IRA. Previously, same-sex couples in Pennsylvania were not able to make these contributions into each other's savings accounts. Now, they can.

"Same-sex couples need to meet with estate attorneys to review their wills, powers of attorney, and advanced health-care directives, just as opposite-sex couples do," Bernstein says. "They need to get married and take advantage."

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