rainbow flag in page

The Supreme Court’s decision in 2015 to legalize same-sex marriage nationwide prompted a mad rush down the wedding aisle, unleashing a pent-up need for financial and estate planning.

Now that the honeymoon is over, many married couples are focusing on family issues, such as parental rights. Others are considering prenuptial agreements, divorce or whether they should marry at all.

It’s all part of the continually changing same-sex marriage climate. Although state-sanctioned marriages began in 2004, 13 states didn’t recognize same-sex marriages until June 26, 2015 when the Supreme Court extended marriage equality nationwide.

“The first year, there was this big rush,” says Ellen Krider, a financial adviser for RBC Wealth Management-U.S. in Fort Lauderdale, Fla. “Now; planning has become a bit more normalized.”

Today, all married couples have the same legal and tax benefits and protections. They can jointly plan for big exenses, such as buying a home or a child’s education, save for retirement and build a family legacy.

“The question isn’t about sexual orientation now; it’s are you married or not, and what do you want to accomplish?” says Cyndy Ranzau, a wealth strategist for RBC Wealth Management-U.S. in Minneapolis, Minn.

Family matters

Even before the Supreme Court handed down its ruling, same-sex marriages were on the rise, steadily increasing from 2013 through 2015. But since the ruling, that number jumped even more. According to the Williams Institute at the UCLA School of Law, more than 574,000 same-sex couples are married, representing some 1.1 million lesbian, gay, bisexual, transgender and queer (LGBTQ) adults. Since the 2015 SCOTUS ruling, at least 157,000 same-sex couples have married in the U.S.

More than a quarter of married same-sex couples are raising children under the aqe of 18 and they’re nearly 10 times more likely than other married couples to adopt children, the Williams Institute states. Some married same-sex couples also have children from previous relationships or surrogacy.

Connect with a skilled advisor
Don’t have an RBC advisor and wish to find one? Get in touch with one.

Estate, tax and wealth planning around children in a same-sex marriage is similar to that of heterosexual couples, but documents may need to be updated to add children or reflect changes in legal co-parents. Before marriage equality in Florida, for example, same-sex couples couldn't adopt a child jointly and one spouse had to go through a second-parent adoption.

Now, as a result of the Supreme Court ruling, both same-sex spouses can adopt a child as legal co-parents. That provides many rights, such as next-of-kin status at hospitals, says Neil McDevitt, a financial adviser for RBC Wealth Management-U.S. in Seattle who has specialized in LGBTQ planning for more than 20 years.

The marriage question

As the number of LGBTQ marriages has grown, so too have divorces.

“We’re definitely seeing more divorces,” Krider says. “As couples unravel, it can be pretty messy. You may not get to keep the family home or be able to disinherit your spouse in a community property state .” However, it should be noted even states without a community property system, such as Florida, prohibit you from completely disinheriting your spouse.

As a result, prenuptial agreements – documents put in place before marriage to protect one's assets -- are rising in popularity

A prenuptial agreement lists the assets owned by each partner before marriage, assets they’ll accumulate together and what happens to all of the assets and income in the case of separation, divorce and death. It also can address family issues, such as child support, financial aid for aging parents or inheritance for children from previous relationships.

A new mindset

Despite marriage equality, some couples are deciding not to wed for tax reasons, concerns about children, small business ownership or other issues, RBC and City National Bank advisers say. The decision often depends on the spouses’ age, income and net worth or if children are involved.

Krider estimates 30 percent of long-term partners have opted not to marry, and for about half of them, it’s because a higher joint income may push them into a higher tax bracket. However, someone isn’t entitled to the Social Security benefits of a higher-income earning partner after death unless they’re married.

“The Supreme Court ruling is changing the conversation,” says Alan Wolberg, a senior wealth planner for City National Bank in New York. “We’ll ask the question ‘Do you really want to get married?’ and why.”

Still, marriage provides many rights and protections to LGBTQ partners that didn’t exist before. As a result, some sophisticated structures created by same-sex couples to mirror the tax and legal treatment of heterosexual couples must be updated or unwound. Living wills and financial power of attorneys may not need to be changed.

Married same-sex couples should review the following for changes or updates:

Wills and trusts:

Same-sex married couples now can create a marital trust that lets estate assets over exclusion limits pass to a surviving spouse, deferring federal estate taxes until the death of the survivor and providing creditor protection.

Estate and gift taxes:

Married same-sex couples are entitled to the unlimited marital deduction from federal estate tax and gift tax. Each spouse can leave up to $5.49 million in 2017 to heirs without paying federal estate or gift tax. Gifts or bequests to a partner may need to be restructured.

Beneficiary designations:

Update your beneficiary designations on all accounts to ensure they’re in line with your estate plan. Same-sex spouses should consider naming each other as your retirement account beneficiaries.


Married same-sex couples can roll over their IRAs and a 401k can roll over to a surviving spouse when the other dies.

“It’s a different mindset,” says McDevitt, who is gay and married. “Before marriage, it was this is mine and this is yours. Now, it’s this is ours."