As many Twin Cities readers are likely aware, a new law allowing same-sex marriage in Minnesota took effect this past week. Minnesota’s legislative change along with the recent Supreme Court decision extending federal benefits to same-sex couples will have wide ranging impact, including a signficant change in the area of estate planning.
In fact, the Supreme Court case that extended federal benefits was centered around estate taxes, an issue that many Minnesota families are concerned about these days. Under the new state and federal laws, spouses in same-sex marriages are able to inherit without tax consequences just as opposite-sex couples do.
This change in the federal laws prompted action from one state that has legalized same-sex marriage, leading the governor of New York to announce a program to refund estate taxes that same-sex spouses had to pay. This action leads to questions about possible similar changes in Minnesota, where state authorities have been working to update relevant policies and procedures to come in line with the new laws.
In addition to the tax implications, same-sex couples who get married and live in Minnesota will also be able to inherit from their spouse even if they did not write a will or if their will did not cover everything in their estate. Assets that are not in a will pass by the law of intestacy, which is essentially a system where the state substitutes a uniform plan to distribute assets when someone has not left a specific plan outlining their wishes.
These changes will clearly simplify the estate planning process for many couples in Minnesota, but it is also important to remember to update estate plans, trust documents, and wills to reflect the new laws.
Source: Associated Press, “New York to Refund Gay Couples Forced to Pay Estate Taxes,” Michael Gormley, July 23, 2013.