Broker Check

Practical Planning Tip: Financial Planning for LQBTQ Families - To Wed or Not To Wed

June 10, 2024

Since June is Pride month, my next few videos will discuss important financial planning considerations for LQBTQ families.

And Today we will discuss to wed or not to wed.

On June 26th of this year will mark the ninth anniversary of the landmark Supreme Court decision to legalize same-sex marriage. I was actually in San Fransisco on that date starting a weeklong road trip and it was quite the festive atmosphere.

Anyway, since that decision Financial planning for the LGBTQ community has become less complicated with marriage equality. However, there are still areas that need special attention and are often overlooked.

First lets discuss, To Wed or Not to Wed? While now legally able to marry, some in the LGBTQ community choose not to. There are financial planning implications for this personal decision.

Couples who do get married are governed by the numerous laws and regulations applicable to married couples. For example, marriage automatically protects one’s right to things like Social Security and military spouse benefits. Another advantage of getting married is the ability to freely pass money and assets back and forth without worrying about gifting limits. An unmarried couple who moves more than the $18,000 annual gift tax exemption, as of 2024, between partners may encounter problems from a tax perspective.

A potential personal finance drawback to getting married is the so-called “marriage penalty.” This is the tax increase that many couples face once they combine their incomes and file as married filing jointly. Couples should assess their joint tax liability and explore ways to reduce their taxable income, such as utilizing tax advantaged retirement saving plans.

You can WATCH the full video here.