Supreme Court's One-Two Punch Creates Estate Planning Opportunities and Pitfalls for California Same-Sex Couples

LOS ANGELES, June 27, 2013 /PRNewswire/ -- The Supreme Court's rejection of the Defense of Marriage Act (DOMA) gives same-sex couples the same rights to federal benefits as heterosexual couples. That means that same-sex couples can plan to reduce or eliminate estate taxes to the same extent as other couples, according to Robert F. Klueger, a noted estate planning attorney.

This one-two punch creates estate tax and non-tax opportunities and pitfalls for same-sex couples who now will be able to marry in California. "Same-sex couples can now create estate plans that are designed to reduce estate taxes," said Mr. Klueger. "But there are traps," he continued. "An unmarried person could not be liable for the debts of another.  But if a couple is married, one same-sex spouse may become liable for the debts of the other," he said.

If asset protection is the paramount objective, a same-sex couple should consider entering into a prenuptial agreement that removes them from community property. As in most contexts, planning works better if it is done earlier rather than later.

Robert F. Klueger is a Certified Tax Law Specialist (California State Bar Board of Legal Specialization) and is AV rated by Martindale-Hubbell (highest possible rating). He is the author of numerous books and scholarly articles on asset protection and tax planning.  His latest book, Estate Planning After the New Tax Law was published in 2011 by Xlibris Publications. He has also published Buying and Selling a Business (John Wiley & Sons, 1988), Mergers & Acquisitions, a Practical Guide (Executive Enterprises, 1989), A Guide to Asset Protection (John Wiley & Sons, 1997) and Asset Protection, (Entrepreneur Press, 2008). His article entitled Practical Considerations in Asset Protection appeared in the July 2003 issue of the Los Angeles Lawyer.

Mr. Klueger is one of the very few private attorneys in America who has argued a tax case before the United States Supreme Court. Mr. Klueger is a frequent lecturer on asset protection for the California Bar Association and various other groups. A practicing attorney since 1974, he is a member of the bars of the United States Supreme Court, the United States Tax Court and the state bars of California, New York and Colorado.

Klueger & Stein, LLP is a Los Angeles-based law firm that specializes in sophisticated estate tax planning and asset protection.

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SOURCE Klueger & Stein, LLP