It is just as important if not more important for same sex couples to engage in estate planning. With the exception of states like New Jersey, Massachusetts and Vermont, there are few laws providing benefits and protections for domestic partners.
I was talking with a CPA specializing in estate planning about the unique tax issues that arise in domestic relationships. Specifically, she expressed that same sex partners, unlike married couples, have no IRS exclusion for property or monetary transfers between them. Such transfers could be subject to gift tax and transfer tax. If there are significant assets involved in a separation between domestic partners, even if the financial provider wanted to be fair with property division, the tax consequences may be prohibitive. After the lifetime exclusion of 1 million dollars is gifted, the excess will have a gift tax imposed. The gift tax rate starts at 41% and goes to 45%. It will be lowered in later years to 35% but this is still a hefty tax for anyone to pay.
Tomorrow I will address Domestic Partnership Agreements. When should you have one? Leave your questions or comments here or contact us at www.ythlaw.com
1 comment:
There are lots of resources out there to help you figure out an estate plan. Here's a good one: Die$mart by Kathy Lane. It describes a number of common mistakes people make that cost them and their families time and money if they become incapacitated or die, all because people are unaware of what they should be doing. These mistakes can cost big, big money -- maybe all of it, so people REALLY need to be aware.
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