Now that Section 3 of DOMA (Defense of Marriage Act) has been struck down by the U.S. Supreme Court, the best states for LGBT couples to move to are those that recognize gay marriage and that are in alignment with the new federal ruling. Financial experts, like the out MSNBC money expert Suze Orman, have predicted that this will result in a flight of gay people from states that are not in agreement with the DOMA strike-down, to greener pastures.
Many gay couples will see no reason to handicap themselves by offering their valued human resources, including their ability to invest in real estate, to communities that are in conflict with the LGBT entitlement to basic constitutional rights.
To retain the maximum benefits, which include income and estate tax breaks, veteran’s benefits, Social Security, Medicare, Medicaid, and the Family Medical Leave Act, same-sex couples may want to consider moving to states that recognize gay marriage.
As of July 2013, 11 state governments — those of Maine, Maryland, Washington, Delaware, Massachusetts, New York, California, Connecticut, Iowa, Vermont, and New Hampshire — and the District of Columbia are the best options. Rising fast are Rhode Island and Minnesota, after joining the roster of states that allow same-sex marriage on August 1, 2013.
There are also many Indigenous nations that recognize gay marriage, including the Coquille Indian Tribe, the Suquamish Tribe, the Lite Traverse Baby Bands of Odawa Indians, the Pokagon Band of Potawami Indians, and the Iipay Nation of Ysabel.
If you’re married and you move to or live in any of the other states (not recognizing gay marriage), you may find that there is a great deal of confusion when it comes to filing your state and federal tax returns, as you will be recognized as a couple federally but not so locally. This will also affect simple procedures like going to the bank to get a mortgage together. It is not helpful that the Supreme Court ruling made it optional for states to recognize a legal marriage status that was established elsewhere in the country.
One of the areas where the new ruling will have the most impact is the transfer of assets, including real estate assets, after one spouse dies. With DOMA struck down, same-sex spouses can now make unlimited transfer of assets to each other without incurring any federal gift tax or estate tax. This is extended to same-sex married couples who live in states that recognize gay marriages; however, if you do not live in one of these states, you may not be entitled to this as the IRS is still clarifying its post-DOMA guidance.
Of the 20 states plus the District of Columbia that impose death taxes, 16 recognize same-sex unions for the purpose of spousal benefits under transfers. These are Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Oregon, New Jersey, New York, Rhode Island, Vermont, and Washington.
As of August 1, 2013, Minnesota and Rhode Island recognize gay marriage as legal. That means if you’re a same-sex couple, you’re treated the same as heterosexuals for purposes of state death taxes. This also means that these states are “safer” to buy a house in but not necessarily parties to all of the benefits and rights that should, constitutionally, belong to everyone, anywhere in the U.S., who is bereaved.
About the Author: Jeff Hammerberg is the Founding CEO of Gay Real Estate. Free Instant Access to the Nation’s Top Gay, Lesbian and Gay-Friendly Realtors Coast to Coast. FREE Buyers Representation ~ Free Relocation Kit to any City, USA ~ Free Sellers Market Analysis for home sellers.