Since the legalization of same-sex marriage, couples have been enjoying the privileges and responsibilities that come with this exciting life-changing event. One of these challenges is realizing how your estate plan can change to include your new life together. Here are four things to consider from experienced NJ estate planning attorneys:
- The portability clause: This Federal Estate Tax clause is an estate-tax exclusion now available to legally married same-sex couples. Currently limited to $5.34 million, this means unused exclusions can be passed on to the surviving spouse, assuming there are no prior lifetime taxable gifts. This means you no longer require a trust to ensure your spouse receives your exclusions, although a trust is still recommended for increased protection against creditors and control over the distribution of the deceased assets.
- Qualified Retirement Plans and IRAs: Your spouse is now legally recognized as the sole beneficiary of your 401(k) by default. To modify this, you would have to get consent from your spouse and officially name a new beneficiary. This gives spouses in same-sex marriages additional protection and will supersede any named beneficiaries, including children, from benefiting from your retirement plan. Similarly, your IRA will be included by default into your spouse’s without taking the required distributions or applying any taxation.
- Medical directives and financial Power of Attorney: These documents are pivotal to estate planning as they ensure a plan is in place in the event of difficult circumstances. A medical directive will name a person, often the spouse, who will make decisions on your behalf should you be unable to. This includes issues such as advanced medical directives, the use of extreme life-saving measures and what to do should you fall into a coma. A financial power of attorney works in a similar way and gives authority to the named person to control and manage your finances on your behalf if you are unable to do so.
- Revoke all current documents: Many couples already have estate plans designed to give themselves and/or their partner and dependents as much protection as possible. With such significant changes in the law, however, these documents are likely to be far less effective than a new estate plan. Reviewing your documents is an option, but can lead to confusion and conflicting issues, so it’s important to revoke them completely and start afresh. Documents of particular importance include your Last Will and Testament and trusts as well Power of Attorneys.
Develop a streamlined estate plan with NJ attorneys
At Sedita, Campisano & Campisano, LLC, we have over 30 years of experience in New Jersey estate planning law. We can assist you in creating a Last Will and Testament, Power of Attorney and medical directives as well as set up trusts appropriate to your specific needs. Contact us today and let us deliver expert estate planning advice to take care of all your wishes – whether your estate is big or small.