In 2015 the United States Supreme Court issued its opinion in Obergefell v. Hodges, finding that same-sex married couples are entitled to equal protection under the law, and that their marriages must be recognized in all fifty states – including South Dakota.
The Supreme Court’s ruling overrides South Dakota’s law that prohibited same-sex marriage and will undoubtedly have a major impact on estate planning opportunities for same-sex spouses in South Dakota. Here are eight implications that Obergefell will have for same-sex married couples in South Dakota:
1. Healthcare Decisions
Previously, because South Dakota did not recognize same-sex marriage, one spouse could be left out of the other incapacitated spouse’s healthcare decisions. Now, a same-sex spouse’s decision will have priority under these circumstances.
2. Guardianship Decisions
A same-sex spouse will also have the right to participate if guardianship or conservatorship proceedings become necessary.
3. Federal and State Benefits
Since 2013, same-sex spouses have received survivorship rights for federal benefits and programs (like Social Security). After Obergefell, spouses now gain access to survivorship rights at the state level, like state pensions or other state benefits.
If a spouse dies without a legal will or trust (also known as “intestacy”) a same-sex spouse will now have certain spousal inheritance rights.
5. Will/Trust Contests
If a will or trust is contested after a spouse’s death, the same-sex partner will now have a say in the court proceedings.
6. Federal Taxes
From a tax perspective, same-sex couples now have the ability to file their federal taxes jointly as a married couple.
Same-sex couples can now claim “portability” elections on the death of the first spouse. The “portability” of the federal estate tax exemption means that if the first spouse dies and the value of the estate does not require the use of all of the deceased spouse’s federal exemption from estate taxes, the amount of the exemption that was not used for the deceased spouse’s estate may be transferred to the surviving spouse’s exemption.
8. Marital Deduction
The marital deduction allows anyone to pass their entire estate to a surviving spouse without any estate tax.