Supreme Court Strikes Down Defense of Marriage Act

DOMAThe Supreme Court’s recent decision striking down the Defense of Marriage Act (DOMA) gave a huge retirement benefit to couples in same-sex marriages.

Social Security and Medicare benefits – two cornerstones of retirement planning long enjoyed by most married Americans – will now be available for couples in the 13 states that recognize gay marriage. Gay and lesbian couples will be eligible for valuable spousal and survivor benefits that were up until now, off-limits to them.

Once the federal benefits are implemented, gay and lesbian couples married in the states listed below will be able to incorporate Social Security and Medicare benefits into their retirement planning.

  • California
  • Connecticut
  • Delaware
  • Iowa
  • Maine
  • Maryland
  • Massachusetts
  • New Hampshire
  • New York
  • Vermont
  • Washington
  • Washington, D.C.

Women married to each other, even if divorced, for example, will be able to collect up to half of each other’s Social Security benefits if certain conditions are met:

  • If one is widowed, even if divorced, she can receive up to 100% of the deceased spouse’s benefit if it’s less than her own benefit.
  • A spouse or divorced spouse may qualify for half of a worker’s disability benefits. (Medicare benefits also are available to spouses who haven’t contributed.)

The above applies for married men as well.

For those living in states that accept only same-sex civil unions, the federal benefits will not be so generous, as federal-worker benefits will not extend to domestic partners who are not legally married. This applies to civil unions in Colorado, Hawaii, Illinois and New Jersey.

One caveat to this ruling is that the Supreme Court did not comment on a DOMA provision regarding states that don’t recognize same-sex marriages performed by other states. Because the Social Security Act relies on where one is “domiciled when one files for benefits,” Congress will have to address changing the law to apply to couples who get married in states where gay marriages are legal but move to states where they’re not.

It is likely legislation will continue to evolve and change as more states recognize same-sex marriages.

About Chas Boinske

Charles P. Boinske, CFA, is a 30 year investment management veteran overseeing the strategic direction and portfolio management process for Independence Advisors, LLC. Have a question for Charles? CLICK HERE TO ASK CHARLES

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