Article on Tax Planning for Same-Sex Couples

Samuel H. Grier (Attorney, King & Spalding LLP) & Tad D.Ransopher (Director of the Masters of Taxation Program, Georgia StateUniversity) recently published an article entitled, Tax Compliance and Estate Planning for Same-Sex Couples, 5 Est.Plan. & Cmty. Prop. L.J. 323 (Summer 2013). Provided below is a portion of their introduction:

Changesin American culture have led to an increased number of people engaging in opensame-sex relationships.  This leads to an increase in the number ofsame-sex couples living as a domestic unit who will be coming to taxpractitioners for help with compliance and tax planning.  With thebaby-boom generation reaching retirement age, an increase in the number ofdevoted same-sex couples who seek to create an effective estate plan exists. Attorneys and tax professionals involved in this process need to be aware ofthe challenges involved.

Thisarticle is organized into two sections and is intended to be a practicaldiscussion that will explore the challenges that same-sex couples will face inthese areas.  The first section explores the provisions of the I.R.C. thataffect same-sex couples as they prepare their tax returns and compute theircorrect income tax liability each year.  The topics discussed below arealso useful in advising couples as to the best way to structure their personalfinancial affairs and other transactions to take advantage of the tax laws thatwill affect them.  The second part of this article discusses the manychallenges that same-sex couples face in creating an estate plan and discussesthe tools that the estate planning attorney can use to effectively facilitatethe transfer of property between the same-sex partners after death.  Taxplanning, which is essential to any successful estate plan, is also addressedbecause the unmarried status of most same-sex couples poses unique challengesto the creation of such a plan.  Some of the traditional estate and taxplanning methods may still be used to carry out the intent of the partners;some modification, however, may be necessary to give that intent legal effect.