From Our “Ask a Question” mailbag: “Estate Planning for Pennsylvania LGBT Same-Sex Couples.”

Most recently updated on June 6th, 2018.

Estate Planning for Pennsylvania LGBT Same-Sex Couples.

“My fiance and I are planning our wedding for next year, but I would like to understand the legal issues raised by marriage. That includes merging our estate plans. Can you explain Estate Planning for Pennsylvania LGBT Same-Sex Couples?”

Estate Planning for Pennsylvania LGBT Same-Sex Couples.

Since Governor Tom Corbett’s announcement back in 2014 that he would not pursue an appeal of U.S. District Judge John Jones’ decision in Whitewood v. Wolf means that same-sex marriage is legal and here to stay in Pennsylvania. What does this provide as far as the estate planning for same-sex couples who choose to marry?

Planning Tools You Should Understand.

Here are some examples of the changes Whitewood has created:

Tax Savings:

Previous estate planning for LGBT couples in Pennsylvania had to work around the Pennsylvania Inheritance Tax. That tax, levied on the estates of anyone who dies a resident of Pennsylvania, has varying tax rates. The tax rate between married persons is 0%, while the tax between unmarried couples is 15%. Before Whitewood v. Wolf, even if an LGBT couple married in another state if one died a Pennsylvania resident the survivor had to pay a 15% tax on all inheritance. Now, that tax rate is 0%. For example, this is a tax reduction of $75,000.00 on a $500,000 estate, a considerable tax saving.

Disclaimer Trusts:

Using disclaimer trusts as a planning tool between spouses is an amazingly flexible tool. It allows a surviving spouse the option to take an inheritance or to have that inheritance pour into a protective trust. The protective trust can shelter the inheritance from the surviving spouses’ future creditors. It is low cost, easy to use, and provides great protection. Until the decision in Whitewood, an LGBT couple could not utilize this tool as it is only allowed between married couples. After Whitewood, this valuable planning tool is available to all married couples.

Default Rules for Administration:

If one person in a married couple dies without a will, the Pennsylvania probate rules give the surviving spouse the presumption of being the person who can petition the Register of Wills for Letters of Administration, and have the power to administer the deceased spouse’s estate. Before Whitewood, even if an LGBT couple married in another state, the marriage was not recognized for this preference.

More Planning Questions?

If you have more estate planning questions, please read my more detailed article, Estate Planning, Everything You Need to Know.

In Conclusion: Estate Planning for Pennsylvania LGBT Same-Sex Couples.

In this article, I tried to addressvEstate Planning for Pennsylvania LGBT Same-Sex Couples. Further, I included links to even more detailed information on my website. So, let me know how I did, comments and questions are welcome! I hope it helped! 

If you have more questions about wills and estate planning, let our Philadelphia County Estate Planning Lawyers help walk you through the confusing process.  Our lawyers are ready to answer your questions. Feel free to contact our office for a free consultation. 

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

Peter Klenk, Estate Planning Lawyer