The Supreme Court of the United States ruled Friday that same-sex couples have a constitutional right to marriage. This 5-4 decision made same-sex marriage legal nationwide, simplifying personal finances and taxes for these couples.
“By virtue of their exclusion from that institution, same-sex couples are denied the constellation of benefits that the States have linked to marriage,” wrote Justice Anthony Kennedy about his decision to vote to uphold the right to marriage. “This harm results in more than just material burdens. Same-sex couples are consigned to an instability many opposite-sex couples would deem intolerable in their own lives.”
With gay marriage declared legal in the U.S., some federal and local laws that govern how married couples share assets and money, pay taxes and are taxed on inheritances will apply equally to married same-sex couples.
Financial Benefits Same-Sex Couples Can Now Enjoy
Now that same-sex marriage is legal in all 50 states, every state will now be required under the Supreme Court’s ruling to honor these marriages as equally as opposite-sex unions. So, managing money and making financial arrangements will be simplified, and gay couples will also be able to fully take advantage of many financial benefits that opposite-sex couples have long enjoyed.
Here are some benefits same-sex couples can look forward to:
The Supreme Court struck down the Defense of Marriage Act (DOMA) in 2013 and enabled legally married gay couples to file joint federal returns. Couples who did so while living in a state where gay marriage was not recognized, however, would have to file separate state tax returns, reports CNBC. But now, same-sex married couples can benefit from state-level tax breaks also offered to opposite-sex married couples.
Related: 8 Tax Tips for Same-Sex Couples
Social Security Benefits
Before the ruling, same-sex couples in some states were not entitled to spousal and survivor Social Security benefits. In fact, one financial planner told the The Wall Street Journal that he had to advise a lesbian couple in one of the 13 states that didn’t recognize same-sex marriage to purchase extra life insurance to compensate for these missing benefits — something he wouldn’t have had to recommend to a same-sex couple.
With the Supreme Court ruling, however, same-sex spouses will be entitled to the same Social Security benefits as heterosexual spouses. According to a study by Financial Engines, an investment advisory firm, the ruling could produce $20,000 to $250,000 more in lifetime benefits, reports TIME.
Under the previous patchwork of marriage laws, same-sex couples were often unable to name their spouse as a spousal beneficiary to retirement accounts. Now, reports TIME, a same-sex surviving spouse will be able to roll an inherited IRA into their own retirement accounts tax-free. Married same-sex couples will also be able to fund spousal IRAs.
Tied in with the inherited accounts, same-sex couples can now inherit assets or property without possibly triggering a state or federal tax. The Supreme Court ruling also makes it possible for them to freely share property in their marriage without being subject to taxes. And, they can take advantage of the spousal estate tax exemption, which allows a partner to inherit up to $11 million tax-free.
Health Insurance Coverage
Starting in 2015, health care laws required insurers “that offer health coverage to opposite-sex spouses must do the same for same-sex spouses,” according to HealthCare.gov. If a same-sex couple was married in a state where it was legal, they retained the right to access insurance. With same-sex marriage now legal nationwide, gay couples can get married in their own state and take advantage of such benefits.
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This article originally appeared on GOBankingRates.com: Gay Marriage Legalized Nationwide by Supreme Court: Here’s How Couples’ Finances Will Benefit