The enormous legal battle that finally reached a resolution in the U.S. Supreme Court concerning same-sex marriage belies the importance the nation places on the institution of marriage. In spite of changes in societal mores, which have become much more permissive of divorce, an examination of marriage and its effects on couple’s finances demonstrates it is still important.
In fact, part of the decision by the Court noted the “constellation of benefits” that same-sex couples lack by not be permitted to marry. From hospital visitation right to taxes, the right to marriage will make life much easier for same-sex couples who had lived in the 14 remaining states which prohibited their marrying.
The tax effect could be significant for some couples, as they may be able to file amended tax returns in years where it is permissible and obtain tax refunds. For Minnesota same-sex couples, who have enjoyed the right since 2012, most effects are more muted, but for all same-sex couples throughout the nation who have lived in states that have permitted their marriage, it does confer one very powerful right, that of freedom of travel.
Prior to this decision, if a couple married in a state where it was legal and then moved to a state that did not recognize the right, they would have to deal with the confusing jumble of tax laws, property rights and in many jurisdictions, an inability to divorce, should their relationship fail.
While all the ramifications of the decision are yet to be worked out, for many couples, the reconciliation of their state taxes with the federal tax laws since the DOMA was overturned by the Windsor case, will greatly improve and simplify their taxes, as well as other financial issues, such as estate planning.
Source: bna.com, “Supreme Court Marriage Ruling Unties Couples’ Personal Finance Knot,” Margaret Collins, Richard Rubin and Laura Davison, June 26, 2015