ABSTRACT
The U.S. Supreme Court, in Obergefell v. Hodges, ruled that the fundamental right to marry is constitutionally guaranteed to same-sex couples. However, neither this decision nor subsequent Treasury regulations specifically address common-law marriage (currently allowed in 11 states), the majority of which previously required marriage to be between opposite-sex couples. After Obergefell ruled such requirements unconstitutional, nine of those states modified their common-law statutes to include same-sex couples. Because the federal government has long recognized common-law marriage, this paper discusses prospective and retroactive income and wealth-transfer tax planning opportunities for eligible, common-law married, same-sex couples that qualify to file as married filing jointly for the current tax year and any open tax year for which they would have been considered common-law married. This manuscript presents a legal discussion, along with a variety of examples and tax planning strategies for same-sex couples in common-law marriage states.
The Fundamentals of Wealth Transfer Tax Planning: 2013 and Beyond