Same-Sex Marriages; The
Financial Planning Perspective
Offered by:
Total Alignment Wealth Advisors, LLC
5 Penn Plaza, Floo...
Same-Sex Marriages; The Financial Planning Perspective
1. Who Are We?
a) Our Firm
b) Our Speakers
2. What Do We Know About...
Who We Are – Total Alignment Wealth Advisors, LLC
Founded by Clients, for Clients
Focus on Integrated Planning Advice, Ove...
Who We Are – Our Speakers
Stephanie Genkin
Producer for
CNN Money
Graduate of Oxford University
Transitioning Financial Pl...
Preliminary Questions…
2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 5
Question # 1 – Legal Marriage Recognition?
62014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
Female Femal...
Question # 2 – Legal Marriage Recognition?
72014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
Female Femal...
Question # 3 – Legal Marriage Recognition?
82014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
Female Femal...
Question # 4 – Legal Parental Rights?
92014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
Female # 1 Female...
Question # 5 – Legal Parental Rights?
102014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
Female # 1 Femal...
3 Key Benefits for Married Couples
1. Financial & Tax Benefits
2. Medical & Family Benefits
3. Creditor & Criminal Protect...
#1 Key Marriage Benefit - Financial & Tax Benefits
1. Ability to Consolidate Income and Expenses and File a Joint Tax Retu...
#2 Key Marriage Benefit – Medical and Family Rights
1. Ability to Visit and Make Medical Decisions for Incapacitated or Il...
#3 Key Marriage Benefit – Creditor & Criminal Protections
1. Right not to testify against a spouse in a Criminal Proceedin...
Summary of Key Issues for Married Couples
1. Pure Financial Issues:
 Saving & Investing vs. Spending; Tax Return Filing –...
Recent History of LGBT Marriage…
2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 16
Recent History for LGBT Marriage Recognition
1996
• DOMA enacted
for non-
recognition of
same-sex
marriages
2002
• Distric...
Windsor Case Summary
Rights
Confirmed
Right to federal
marriage benefits for
same-sex couples who
are validly married in
a...
So Where is LGBT Marriage Now?
2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 19
Current 18 States Recognizing Full Marriage
2004
•Massachusetts
2008
•Connecticut
2009
•Vermont
•Iowa
2010
•District of Co...
Current 4 States Recognizing Marriage Equivalency
2008
• Oregon
2009
• Nevada
• Wisconsin - less than full equivalency
201...
Recent State LGBT Relationship Battles…
• On December 20, 2013, a federal district court judge ruled the
Utah state amendm...
Recent State LGBT Relationship Battles (Cont’d)
• On February 13, 2014, the United States District Court for the
Eastern D...
IRS Rev. Rul. 2013-17, issued on August 29, 2013
 IRS will recognize a couple married in a
recognition state as “married”...
International LGBT Marriage Recognition
Argentina
Belgium
Brazil
Canada
Denmark
France
Iceland
The
NetherlandsNew
Zealand
...
LGBT Summary Statistics…
Large and Increasingly
Visible & Recognized Group…
Approx. 16,000,000 U.S. adults now identify as...
What Could Be Next for LGBT Marriage?
2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 27
Possibilities on Future Recognition…
More
Recognition
Additional States of the
Remaining 32 States Grant
Marriage Recognit...
Action Plan In Anticipation of
Marriage…
2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 29
Pre-Marriage Planning…
• Consider Selling Assets Held at a Loss to Your
Partner in Calendar Year Prior to Marriage
Make Pr...
Pre-Marriage Planning (Cont’d)…
• Some Federal Benefits May Rely Upon State of
Residence – E.g., Social Security Benefits....
Questions?
2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 32
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Financial Planning for same sex marriages

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This deck overviews a recent presentation given by Total Alignment Wealth Advisors on same sex marriage financial planning and family issues. It was offered along with financial advice and strategies by Managing Member & Chief Wealth Advisor Robert Hayden, JD, CFP®, CDFA™.

For more information contact: lgbt@totalalignmentwealth.com

Published in: Economy & Finance
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Financial Planning for same sex marriages

  1. 1. Same-Sex Marriages; The Financial Planning Perspective Offered by: Total Alignment Wealth Advisors, LLC 5 Penn Plaza, Floor 19 New York, NY 10019 (212) 913-9110 Info@totalalignmentwealth.com
  2. 2. Same-Sex Marriages; The Financial Planning Perspective 1. Who Are We? a) Our Firm b) Our Speakers 2. What Do We Know About Same-Sex Marriages? a) General Financial Planning Issues for Married Couples b) Recent History on Same-Sex Marriage Recognition c) Current Status for Same-Sex Couples 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 2
  3. 3. Who We Are – Total Alignment Wealth Advisors, LLC Founded by Clients, for Clients Focus on Integrated Planning Advice, Oversight & Financial Organization •No Commissions •No Referral Fees or Kick-Backs •Paid Only from the Client Strictly “Fee-Only” •TA Planners™ Hourly Coaching and 6-Month Financial Consultant for the Mass Affluent ($200K-$3mil) •Total Alignment™ Annual Personal CFO services for the High Net Worth ($3-20mil) •Total Alignment™ One-Time Plans and Private Family Office services for the Ultra High Net Worth ($20mil+) 3 Core Services •Private Advisory Memorandums •Private Workshops Total Alignment™ Institute of Research and Learning •Access to Anonymous Insights of Other Clients’ Situations / Benchmarking •Integrated and Unbiased Advice + Expert Advisors + Advanced Technology = Informed Financial Decisions •Savings of Time, Worry & Excess Costs Key Benefits 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 3
  4. 4. Who We Are – Our Speakers Stephanie Genkin Producer for CNN Money Graduate of Oxford University Transitioning Financial Planner for TA Planners™ Frequent Speaker on Various Financial Planning Topics Robert Hayden, JD, CFP®, CDFA™ Managing Member and Chief Wealth Advisor of Total Alignment Wealth Advisors Adjunct Professor for NYU, Teaching its Financial Planning Capstone Course One of 13 Board Members for Certified Financial Planner Board of Standards, Inc. Licensed Attorney, Certified Financial Planner™ professional and Certified Divorce Financial Analyst® 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 4
  5. 5. Preliminary Questions… 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 5
  6. 6. Question # 1 – Legal Marriage Recognition? 62014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. Female FemaleMarriage Ceremony
  7. 7. Question # 2 – Legal Marriage Recognition? 72014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. Female Female Legal Marriage in New York But Now Lives in Alabama
  8. 8. Question # 3 – Legal Marriage Recognition? 82014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. Female Female - No Legal Marriage Ceremony - Resided Together for 20 years - Held Themselves Out as “Partners”
  9. 9. Question # 4 – Legal Parental Rights? 92014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. Female # 1 Female # 2 - Legally Married & Residing in Recognition State Child
  10. 10. Question # 5 – Legal Parental Rights? 102014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. Female # 1 Female # 2 - NOT Legally Married but - Common Care for Child Child
  11. 11. 3 Key Benefits for Married Couples 1. Financial & Tax Benefits 2. Medical & Family Benefits 3. Creditor & Criminal Protections 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 11
  12. 12. #1 Key Marriage Benefit - Financial & Tax Benefits 1. Ability to Consolidate Income and Expenses and File a Joint Tax Return 2. Access to Social Security Spousal Retirement, Disability and Death Benefits 3. Spousal Benefits under ERISA, COBRA, Medicare, Medicaid and Employer- Provided Group Health & Retirement Plans 4. Military and Veterans Spousal Privileges 5. Unlimited Non-Taxable Lifetime Transfers and At-Death Marital Deduction Transfers 6. Ability to Claim Alimony (and Possibly Community Property) and Non-Taxable Equitable Division Transfers Incident to Divorce 7. IRA Spousal Rollover Advantages To Spread Out Income Tax Hit 8. Ability to Elect Against Spouse’s Will 9. Ability to Double Annual Gift Tax Exclusion (Gift-Split) and Exclusion of Gain upon Sale of Principal Residence 10. Ability to Claim Unused Spousal Exemption under At-Death Portability Rules 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 12 “Top 10” Financial & Tax Benefits
  13. 13. #2 Key Marriage Benefit – Medical and Family Rights 1. Ability to Visit and Make Medical Decisions for Incapacitated or Ill Spouse 2. Entitlement of Excused Absences from work under Federal Medical Leave Act 3. Immigration Spousal Sponsorship 4. Parental Presumptions & Second Parent Adoption Privileges (Except where second parent adoptions aren’t legal in a given state.) 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 13 Medical & Family Benefits:
  14. 14. #3 Key Marriage Benefit – Creditor & Criminal Protections 1. Right not to testify against a spouse in a Criminal Proceeding 2. Ability to protect against creditors in Tenancy by the Entity 3. Protection under Bankruptcy Act 4. Ability to File A Claim for Wrongful Death 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 14 Creditor & Criminal Protections
  15. 15. Summary of Key Issues for Married Couples 1. Pure Financial Issues:  Saving & Investing vs. Spending; Tax Return Filing – Married Filing Separately vs. Married Filing Jointly  Extent of Debt Maintained  Combined Investment Allocation; General Risk Tolerance; Need for Insurance 2. Legal Issues Having Financial Implications:  Recognition – Are We Even Considered “Married”? (Most application to same-sex couples & common law marriage rules.)  If We Are “Married”, What Does That Mean?  1,138 federal statutory provisions addressing spousal benefits; 200 Internal Revenue Code tax sections  Joint vs. Sole Titling of Assets; Application of State Separate Property, Community Property Laws & Adoption Laws  What If We No Longer Wish To Be Married Or If One Spouse Dies?  Consider Pre- and Post-Nuptial Agreement Enforcement, Marital Dissolution Planning & Spousal Estate Elections 3. Lifestyle Issues Having Financial Implications:  Family Size & Whether to Adopt  Lifestyle Changes, In-Laws & Adapting; Financial Support of In-Laws  Keeping Track of Financials & Documents  Budgeting and Financial Monitoring  Tax Returns  Real Estate Documents  Insurance Policies  Estate Planning Documents 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 15
  16. 16. Recent History of LGBT Marriage… 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 16
  17. 17. Recent History for LGBT Marriage Recognition 1996 • DOMA enacted for non- recognition of same-sex marriages 2002 • District of Columbia authorizes marriage equivalency recognition 2004 • Massachusetts becomes the first of now 18 states to recognize same- sex marriages 2013 • US Supreme Court invalidates Section 3 of DOMA in Windsor case 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 17
  18. 18. Windsor Case Summary Rights Confirmed Right to federal marriage benefits for same-sex couples who are validly married in a recognition state Rights Not Confirmed Right to federal marriage benefits without prior state recognition or with mere civil unions or domestic partnerships Right to full faith and credit in non-recognition states for recognition state marriage Right to federal marriage benefits when residing in a non-recognition state but marrying in a recognition state 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 18
  19. 19. So Where is LGBT Marriage Now? 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 19
  20. 20. Current 18 States Recognizing Full Marriage 2004 •Massachusetts 2008 •Connecticut 2009 •Vermont •Iowa 2010 •District of Columbia •New Hampshire 2011 •New York 2012 •Maine •Washington (State) 2013 •Delaware; Rhode Island; Hawaii •New Jersey; New Mexico; Minnesota 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 20
  21. 21. Current 4 States Recognizing Marriage Equivalency 2008 • Oregon 2009 • Nevada • Wisconsin - less than full equivalency 2013 • Colorado 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 21
  22. 22. Recent State LGBT Relationship Battles… • On December 20, 2013, a federal district court judge ruled the Utah state amendment unconstitutional. • The Supreme Court of the United States then issued a stay prohibiting any further same-sex couples from marrying pending a decision on the merits. Utah • On January 14, 2014, the United States District Court for the Northern District of Oklahoma ruled that Oklahoma’s ban on marriage equality is unconstitutional. • The case is stayed pending appeal. Oklahoma • On February 11, 2014, the United States District Court for the Western District of Kentucky ruled that the state’s marriage amendment is unconstitutional. • The state will likely appeal this decision and the Governor will seek a stay of the order pending the appeal. Kentucky 222014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
  23. 23. Recent State LGBT Relationship Battles (Cont’d) • On February 13, 2014, the United States District Court for the Eastern District of Virginia ruled that Virginia's ban is unconstitutional. • In response, Virginia’s new attorney general indicated he will no longer defend it in federal lawsuits. Virginia • Legislators in Arizona attempted to pass a bill that would allow business owners with strongly held religious beliefs to deny service to gays and lesbians. • The bill was just vetoed by Governor Jan Brewer. Arizona • Nicole Dimetman and her partner challenged an 11-year old law against same-sex marriage on equal protection grounds. • A federal court judge agreed, but Texas Attorney General Greg Abbott said he would appeal. Texas 232014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved.
  24. 24. IRS Rev. Rul. 2013-17, issued on August 29, 2013  IRS will recognize a couple married in a recognition state as “married” even if that couple now resides in a non-recognition state  However, IRS will not treat as “married” domestic partnerships or civil unions  Legally married couples must file their 2013 federal tax returns using either (i) married filing jointly or (ii) married filing separately 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 24
  25. 25. International LGBT Marriage Recognition Argentina Belgium Brazil Canada Denmark France Iceland The NetherlandsNew Zealand Norway Portugal South Africa Spain Sweden United Kingdom Uruguay 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 25
  26. 26. LGBT Summary Statistics… Large and Increasingly Visible & Recognized Group… Approx. 16,000,000 U.S. adults now identify as LGBT. -Harris Interactive Research, 2013 $830 million in purchasing power / personal disposable income. -Witeck Communications, 2013 Over 600,000 Self-Identifying LGBT Couples Nationwide (Approx. 10% reside in NYC). - US Census, 2010. 22 U.S. Jurisdictions now recognize same-sex marriage or its equivalency. 23 U.S. Jurisdictions now authorize second-parent adoption by one in a same-sex couple. A February 2014 poll by CBS News and The NY Times shows 56% of US supports recognition. But Targeted Discrimination Continues… 33 states currently have laws banning same-sex marriages. 8 states currently have laws banning second-parent adoptions. 80 countries outlaw homosexual acts, of which almost 50% are in Africa (with particularly harsh penalties in Uganda and Nigeria). 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 26
  27. 27. What Could Be Next for LGBT Marriage? 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 27
  28. 28. Possibilities on Future Recognition… More Recognition Additional States of the Remaining 32 States Grant Marriage Recognition US Supreme Court case Invalidates Federal Marriage Benefits without prior state recognition US Supreme Court case Invalidates DOMA Section 2, thereby forcing full faith and credit Congress repeals DOMA Section 2 by passing The Respect of Marriage Act (H.R. 2523, S 1236) Less Recognition No Additional States Grant Recognition and States currently recognizing marriage move to overturn recognition US Supreme Court case validates exception to full faith and credit in non-recognition states for recognition state marriage US Supreme Court validates exception federal marriage benefits when residing in a non- recognition state but marrying in a recognition state 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 28
  29. 29. Action Plan In Anticipation of Marriage… 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 29
  30. 30. Pre-Marriage Planning… • Consider Selling Assets Held at a Loss to Your Partner in Calendar Year Prior to Marriage Make Pre-Marriage Tax Strategies • How Does Your Partner’s Credit History, Asset and Income Levels (Current and Potential), Spending Habits and Overall Risk Tolerance Differ from Yours? • What Expenses Can Be Shared? • How Should Your Combined Investment Allocation Change? Consider Your Partner’s Finances • Needs Separate Legal Representation • Requires Full Financial Disclosures • Must Be Done As Far Removed In Time As Possible From The Wedding Consider a Pre-Nuptial Agreement 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 30
  31. 31. Pre-Marriage Planning (Cont’d)… • Some Federal Benefits May Rely Upon State of Residence – E.g., Social Security Benefits. • Validity of Any Pre-Nuptial and Post-Nuptial Agreements Might Be Questioned. State Residency Planning • Immigration sponsoring • Unlimited Marital Deduction Not Available (Consider a QDOT structure) Consider special planning issues when Spouse is a Non-Citizen • If guest injuries occur, or the wedding is cancelled or rescheduled, wedding insurance will be needed. • Creating a budget for the wedding is critical. Consider a Wedding Budget & Wedding Insurance 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 31
  32. 32. Questions? 2014 © Total Alignment Wealth Advisors, LLC. All Rights Reserved. 32

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