This dichotomy between state and federal law creates numerous transfer-tax concerns. For instance, under Massachusetts and federal law, spouses may transfer unlimited assets amongst each other during lifetime and upon death without incurring any gift or estate tax liability. Because same-sex marriage is not recognized under federal law, however, same-sex couples can only make limited transfers amongst each other without incurring federal transfer-tax liability. Same-sex couples are also subject to certain disadvantages with respect to taxation of jointly held assets.
To be sure, the Goodridge decision has provided numerous benefits for same-sex couples. Same-sex married couples now enjoy spousal rights under intestacy laws and the elective share statute, priority rights to administer the estate of a deceased spouse who dies intestate, and the right to own their residence as tenants by the entirety. However, same-sex couples are still subject to severe limitations from a transfer-tax perspective, which will persist until some changes are made to the federal law.
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