Legal Blog

The Weekly Scenario from Steve Shane – 8.12.13

Question:  Now that the Supreme Court has struck down the section of the Defense of Marriage Act (DOMA), what implications will this have for newly married same sex couples in states which recognize same sex marriage? Answer:  The Supreme Court’s opinion asserted that DOMA impacted “over 1,000 federal statutes” and many regulations.  While I have not counted to see if this is correct, certainly there are many federal laws which impact the rights of married couples.   A few important areas: Employer Benefit Individuals should inform their employers that they are married.  Health benefits for same sex couples at many companies will be a huge benefit. With respect to “ERISA” based retirement plans, spouses have a right to a survivor’s benefit from such ERISA – coverer employer sponsored retirement plan.  If a plan participant desires to name someone other than his spouse as a beneficiary, his/her spouse’s written consent must be provided to the employer.  In addition to the spousal waiver, the beneficiary designation form should be updated, naming the correct (intended) beneficiary. Non-Qualified Annuities In discussing retirement plans, the topic of non-qualified annuities shouldn’t be overlooked.  Under the “spousal continuation rule,” in most cases a deceased owner’s surviving spouse can become the contract owner (resulting in greater tax deferral). Accordingly, same sex married couples with a non-qualified deferred annuity should let the issuing company know that the beneficiary is a spouse.  I’m told that some companies don’t offer this continuation option and some may not be willing to provide it to a same-sex contract owner.  In such case, one option might be to exchange to another contract. Social Security The Social Security Administration should be notified so that same-sex spouses can receive spousal benefits and survivor’s benefits.  Married couples have a number of planning options for claiming benefits, deferring benefits and obtaining higher payments. Reevaluating Current Estate Plans The Court’s decision had a significant impact on same sex couples’ estate tax planning.  Now, some of the most significant benefits including the unlimited marital deduction and portability are available to same sex spouses.  Now that these benefits are available, every same sex couple needs to review their existing estate plans. IRAs There are a number of beneficial IRA benefits available to spouses. For example, a spouse with no earned income can nevertheless contribute to an IRA if she or he has a working spouse with sufficient earned income.  Another tremendous advantage is the ability to roll a deceased spouse’s IRA into a surviving spouse’s (rollover) IRA. Steven E. Shane Principal Offit│Kurman Attorneys At Law 301.575.0313 Washington 443.738.1513 Baltimore 410.218.9339 Mobile 301.575.0335 Facsimile Please note the above material discussed is intended to provide only general information. Do not, under any circumstances, solely rely on this information as legal advice. Legal matters are often complicated. For assistance with your specific legal problem or inquiry please contact me directly.