NEW YORK, October 15, 2013 – Georgiana Slade, practice group leader of Milbank, Tweed, Hadley & McCloy’s Trust and Estates Group, provides commentary in a recent New York Times article titled "Gay Marriage Ruling Brings New Planning Choices."
The article discusses that the Supreme Court ruling last June that married same-sex couples were entitled to federal benefits and tax advantages, is prompting many to rethink their financial arrangements.
"Now you don’t have to create strategies and implement transactions that are complicated, to transfer assets to your spouse," said Georgiana J. Slade.
"Before Windsor, one common tactic to avoid estate taxes was for the wealthier spouse to buy a term life insurance policy listing the other as the beneficiary. As long as the annual premiums were less than the gift-tax limit, the second spouse could inherit the benefit tax-free," Ms. Slade said. "However, the couple was spending thousands of dollars a year on the premiums."
Georgiana further adds commentary around adding a spouse’s name to brokerage accounts and marketable securities. While straightforward, "where you might get into issues is with alternative investments like hedge funds and private equity holdings." Ms. Slade said. Because each spouse needs at least $5 million in assets to qualify for those investments, the wealthier partner might have to shift some liquid assets to the other.
