Ken Himmler.com

Recently I spoke about the benefits of not being married. The US Tax Code, the Medicaid System, and many other parts of our financial society penalize you for getting married. This is odd, considering we are in a country that boasts of the large commitment to church. It would seem that the Government would offer benefits to you to get married but that is not the system we have – so complaining about it won’t change it. In a recent forum, I spoke about the additional benefits of not being married but I also think that there are some areas that you should be aware of that you would lose by being in such a partnership without a marriage certificate. The first would be the loss of the unlimited marital deduction. In the year 2010 we know that the estate tax is supposed to go to zero for one year and then – who knows. The sunset laws say that in the year 2011 the maximum estate you can have when you die without having to pay taxes is $1,000,000 unless both the President and Congress agree to eliminate the estate tax. I think that back in the year 2000 when this was passed and we had a national surplus it was easier for some to believe that the estate tax would go away. Now with our country closing in on close to a trillion dollar deficit it is harder to imagine that the estate tax will go away. Currently, if you are married and you die then your spouse will inherit an unlimited amount of money without estate taxes. This would also be the case assuming you have set up revocable living trusts with A/B provisions. (Assuming you have the correct ascertainable standards in the trust for the A/B provisions) By going with a domestic partnership you will have lost the benefit of the unlimited marital deduction which could mean that the survivor of the relationship could be responsible for estate taxes up to 50% upon the first death. There are certainly ways around this issue but so far I think that most of the legal, accounting and financial planning community is undereducated about the options. This does not discount this community as it has only been in the last few years with same sex marriages have we really had the volume of potential problems that it would warrant the investment in time for financial planners to learn the ways to avoid the estate tax.

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