New Jersey Becomes 14th State to Legalize Same-Sex Marriage: What to Consider Before Taking Out a Marriage License

On Monday October 21, New Jersey Governor Chris Christie dropped his legal challenge to same-sex marriage in the Garden State. This was the final step in a process that gathered steam over the previous weekend, as the New York Times reported: “Mr. Christie’s withdrawal of his appeal to the court decision that allowed the marriages came on the heels of a ruling by the state’s Supreme Court on Friday (October 18) that rejected his attempt to block the marriages until the appeal was resolved. His decision effectively removed the last hurdle to making same-sex marriage legal in New Jersey.”

The action by the governor set off a rush by same-sex couples to take out marriage licenses as New Jersey becomes the 14th state, along with the District of Columbia, to allow same-sex marriage. Of note, the Hawaiian state legislature is currently in special session taking up the same issue, so there is a real possibility that the number will reach 15 very soon.

However, emotional issues such as same sex-marriage need to be tempered with clear-eyed analysis, planning and informed action. Marriage – same-sex or not – is one of life’s most significant steps and not one to be taken lightly.  Because marriage carries with it very real benefits and equally real obligations, couples should review their marital plans with the advice of professional advisors in a number of areas including law, taxation, trust and estate. By way of example, it is important to note that in the absence of legislation opening the doors to same sex-marriage, New Jersey couples who are currently in civil unions must not assume they are automatically entitled to the federal benefits now afforded same-sex couples. In fact, civil union couples must take the affirmative step of getting married in New Jersey (or in some other jurisdiction that recognizes same-sex marriage) in order for their federal benefits, such as filing joint federal income tax returns, to take effect. Other examples are the New Jersey and federal estate tax regimes: New Jersey estate tax begins at estates over $675,000; same-sex married couples should now do some careful planning, in conjunction with federal estate planning techniques, to minimize the impact. New Jersey recognizes civil unions for the spousal transfer exclusion but the federal government does not.  Both recognize marital exclusions.  Lastly, New Jersey is a gross income state with very few itemized deductions (real estate and medical costs are examples of those that are allowed), so a joint return might push a couple into a higher tax bracket.

For a useful compendium of facts relevant to same-sex couples in New Jersey, please click here.

The repeal of DOMA and the move toward same sex-marriage equality at the state level has raised hopes and fears, which is to be expected. It has also raised numerous issues pertaining to an individual’s rights and privileges dealing with health care coverage, medical leave, veteran’s benefits, gift and estate taxes, pre- and post-nuptial agreements; along with a host of employer-related issues such as pension and benefit concerns. These more mundane issues are still of great importance and can be the source of misunderstanding and lost opportunity. Same-sex couples and their families and advisors are well advised to seek professional advice on these and many other related issues.

EisnerAmper will continue to cover these issues with Alerts. Readers may follow this coverage by clicking here to read current articles.

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