The Supreme Court's recent ruling in Obergefell v Hodges provided same-sex couples with a number of new rights and tax benefits that they didn't have under previous laws. One of the most notable changes affected gift tax exclusion laws.
Federal laws require individuals in the United States to pay gift tax on gifts they give in excess of a certain value. Currently, the annual gift tax exemption limit is set at $14,000 per person per year. If a gift is given in excess of this limit, the excess will count against your lifetime exclusion limit, which is currently set at $5.43 million. This limit is adjusted each year to account for inflation. After reaching this limit, the remainder of your gifts and/or the excess value of your estate after death will be subject to taxation.
Married couples enjoy several exclusive gift and estate tax benefits. Before the U.S. Supreme Court legalized same-sex marriage, same-sex couples didn't have access to any of the gift tax benefits married couples receive. However, thanks to this ruling, same-sex couples who choose to marry can start taking advantage of all of these perks. Some of these benefits include:
Using these benefits to your advantage may help you to reduce and/or eliminate your future estate taxes. Our estate planning team can help you understand exactly what these are and help you establish a step by step estate planning process. Call us now at 1-937-898-5583 to set up a consultation.