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Estate Planning for Same-Sex Couples in Pennsylvania

Posted on Mon Jun 9, 2014, on LGBT Estate Planning

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

Most recently updated on June 6th, 2018.

Estate Planning for Same-Sex Couples in Pennsylvania

on Estate Planning for Same-Sex Couples in Pennsylvania.

“My wife and I are recently married and moved to Philadelphia.  But, both of us married in the past. Thus we are looking for suggestions on Estate Planning for Same-Sex Couples in Pennsylvania?”

Estate Planning for Same-Sex Couples in Pennsylvania

With equal treatment under the law, various tax and estate planning techniques are now available to same-sex couples. Used strategically, these techniques provide substantial tax savings and asset protection options. If you have entered into a Pennsylvania same-sex marriage, you should consider taking the following steps:

Techniques that Might Serve You Well:

  1. Overhaul Your Current Estate Plan: Valuable estate planning options now exist such as disclaim trusts, QDOTs, and tenants-by-the-entireties. Married couples may make unlimited tax-free gifts to one another. This technique allows moving assets for strategic asset protection purposes. A complete review of all your documents; wills, powers of attorney, living wills, and IRA Trusts is essential.  See how these techniques can help you.
  2. Reassess Life Insurance: The Pennsylvania Inheritance Tax does not tax life insurance.  Previously, many same-sex couples used life insurance to avoid this 15% tax. Now all assets pass to a same-sex spouse free of the Pennsylvania Inheritance Tax. Consequently, life insurance may no longer be needed. 
  3. Plan Around Portability: The federal estate tax Applicable Credit is the amount of your estate that the federal government allows you to give at your death without paying the 40% federal estate tax.  While transfers to spouses are free of the estate tax, without careful planning, you might forfeit a huge tax deduction.
  4. Maximize The Annual Credit: There are several types of gifts that you can make free of the federal gift tax. For example, one exception is the annual exclusion. As a team, you and your spouse can double this exemption. Let’s see if this tool works with your estate plan.
  5. Assess Options for Retirement Plan Beneficiary Designations: If ERISA controls your plan, your spouse is automatically the beneficiary. Your spouse may allow you to name another person as beneficiary, but written consent is needed. Therefore, if you have children from other relationships, a prenuptial or postnuptial agreement should address this issue. 

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 Same-Sex Couples in Pennsylvania.

In this article, I tried to address Estate Planning for Same-Sex Couples in Pennsylvania. 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. 

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    Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. We serve clients in Pennsylvania, New Jersey, New York, Minnesota and Florida. Peter Klenk received his Masters in Taxation LL.M. from NYU Law School and his J.D. from the University of Minnesota Law School. He served his country in the Navy JAGC during Desert Storm. Easy to talk to, feel free to call Peter for an appointment. We will make the process as easy as possible!

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