Justice and Liberty for All: What Legal Same-Sex Marriage Means for Planners

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SCOTUSDecisionThe first line of business for The Vector Group at Morgan Stanley’s Michael Pellman Rowland after the SCOTUS marriage equality ruling was announced was to call up his clients and celebrate.

“This is a very exciting day for many people in the community and the allies that have supported it,” Pellman Rowland said in a video from InvestmentNews 

The second order of business: start unraveling the complicated webs of legal and financial planning advisers who work with the LGBT community had to weave to get clients a fraction of the spousal benefits heterosexual couples enjoyed.

“With full equality across the country, it’s really going to simplify the planning for the LGBT community,” Pellman Rowland, who advised LGBT clients since shortly after graduating from college (according to an article in The Wall Street Journal).

The 5-4 ruling deemed it unlawful for states to deny a marriage license to a same-sex couple. It also mandated that all states recognize lawful same-sex marriages. This is good news for planners who didn’t know the ins and outs of financial and estate planning for same-sex couples.

As married and soon-to-be married same-sex couples around the country are celebrating, Pellman Rowland hopes to utilize this momentum to help his clients do all the things that now need to be done.

The planning community needs to “use this positive euphoria as a catalyst to do the less exciting things that will come along with this decision, which is to get [LGBT clients’] financial affairs in order.”

Some tidbits from Pellman Rowland for planners to keep in mind:

  • Planning for same-sex couples will now mirror that of heterosexual couples in that all the legal, estate, income and other tax and planning characterizations are going to be equal.
  • Review existing plans in place. Look at insurance policies and retirement accounts and make sure the beneficiaries are up to date. Know that many plans require that if you have a legally recognized spouse that they be the primary beneficiary and if they’re not, they have to sign a waiver to that effect. Review those plans and ensure your client’s legally recognized spouse is the beneficiary.
  • Social Security spousal continuation benefits will now be in place for legally married same-sex couples. The Social Security Administration was one of the few governmental agencies that even if you were legally married but lived in a state that didn’t recognize it, you didn’t receive social security benefits if your spouse passed away. That’s a benefit that many married couples rely on when there is one breadwinner but their spouse wouldn’t automatically assume the benefits of their partner, only those that they’d earned.
  • Remind clients of any necessary pending action plans that we’d put on hold up until this decision—whether it be talking to their accountant, talking to their attorney, or their matrimonial attorney. They are eligible to do a prenuptial agreement now, and also other benefits that weren’t relevant or available until now.

The Financial Planning Association, in conjunction with PridePlanners, will host two events to better equip planners to address issues of same-sex couples.

A webinar titled, “Gay Marriage is Legal—Now What?” will be from 2 to 3 p.m., Eastern time, on July 30. Click here to register. Also, a special pre-FPA BE Boston 2015 event will be held on Sept. 25 at the Boston Convention and Exhibition Center, followed by a breakout session during the conference. Stay tuned to the BE website for updated information.

“FPA and PridePlanners are committed to helping planners obtain the latest in planning strategies and connect them with resources that will be integral in helping LGBT clients,” FPA and PridePlanners said in a joint statement.

Ana2Ana Trujillo
Associate Editor
Journal of Financial Planning
Denver, Colo.

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