The Supreme Court’s ruling allowing same-sex marriages nationwide provides an opportunity for financial advisors to add value to their services for same-sex couples, says John B. Burns, a partner at the law firm of Waller Lansden Dortch & Davis LLP in Nashville, Tenn.
The ruling handed down Friday simplifies the former “hodge podge of state laws and puts same-sex couples on the same footing as opposite-sex couples,” adds Matthew T. McClintock, a financial planning expert and vice president of education with Wealth Counsel LLC and EstatePlanning.com. But it does not answer all of the questions, several lawyers and financial planners said in interviews Monday.
“This is clearly an opportunity for an advisor to show the value add for his services for LGBT couples, whether they are married or not,” says Burns. “For instance, will couples be able to amend past tax returns to reflect their married status in states where their marriage was not previously recognized and will it be advantageous for them to do so? Do civil unions and domestic partnerships now qualify as marriage under state laws in states where those options were offered in the past?”
He notes that for the past several years many employers have offered employment benefits to domestic partners on the same terms as were offered to opposite-sex married couples, but this was a work-around for same-sex couples in states that did not recognize same sex marriage.
“Going forward, the question faced by many employers is whether they will keep their current policy terms in place or whether they will make adjustments in the wake of the Supreme Court’s decision,” he says. Advisors will need to know how this may affect their clients, he says.
These are only a few of the myriad questions that will be answered in the coming months, advisors say.
Because all married couples are on an equal basis now, McClintock feels advisors do not need to specialize in assisting LGTB couples, but the advisor needs to be an expert on laws that affect taxes, inheritances, adoptions, employee benefits and retirement benefits—among others—for all couples.
“The same-sex married community is large and growing. The court ruling is the new normal going forward” and advisors need to help clients adjust to this new reality, McClintock adds.
“Eventually the financial planning issues will get easier, but there will be a transition period,” says Paul Ferrara, wealth strategist with U.S. Trust in New York City. “There will be a shaking out time and no one knows how long that will last.”
As an example of the issues to be solved, Ferrara points to a case of a same-sex couple in Texas where marriage was not allowed. They went to Hawaii—where marriage was allowed—to get married. One of the spouses died earlier this year without a will.