By Melissa Myers and Michael J. Tucker, Feb. 26, 2015.
Melissa Myers: I gather that life for newly-married same-sex couples can still be pretty complicated with the overlay of some laws that haven’t quite caught up to marriage equality yet.
Michael J. Tucker: You mean Social Security?
Myers: Someone got in touch with Echo saying they were married out of state in 2013, but that his husband died before their marriage became legal in Arizona.
Tucker: That situation is heartbreaking – even though since September 2013, most federal agencies have been recognizing same-sex marriages, no matter where they live, the Social Security Administration is required by federal statute to determine the validity of same-sex marriages based on the state of residence of the couple at the time the wage-earning spouse applied for benefits.
Myers: That’s so confusing.
Tucker: Also, Social Security follows a rule that the survivor benefits will be determined based on the state where the wage earner resided at the time of his or her death. So, in a case like this, Social Security isn’t allowed to treat this couple as married.
Myers: And, isn’t there a duration requirement?
Tucker: Yes. Couples need to be married for at least nine months at the time the wage earner died.
Myers: So, this is a situation that will apply to a very small number of couples, but nevertheless can produce a terrible result.
Tucker: Legally, Social Security isn’t allowed to take into account that the couple had been together for many years before legally marrying.
Myers: It’s important to recognize also that Social Security survivor benefits will not be an important financial factor in most same-sex couples’ marriages.
Tucker: Right. It’s only going to be critical in cases where one spouse had a long earnings record and the other spouse had no employment for tax purposes.
Myers: These days it’s more common that each spouse will have accrued his or her own earnings record to support his or her own Social Security retirement benefit.
Tucker: Most Americans will qualify for Social Security benefits on their own without relying on survivor benefits based on the earnings record of a spouse who predeceased them.
Myers: Many couples are focused on getting the “extra” Social Security benefits that they perceive they are entitled to by virtue of being married.
Tucker: I’ve noticed that, too. It surprises them that being married won’t be likely to get them any additional Social Security benefit.
Myers: What should surviving spouses in Arizona do to claim any available Social Security survivor benefit if their spouse died before Oct. 17, 2014?
Tucker: The latest conventional wisdom in this area is that all such couples should apply for the Social Security survivor benefit, and they should appeal any denial of their claim.
Myers: That way, their claims are already pending if the law happens to change, either because same-sex marriage equality becomes retroactive as matter of constitutional law across all 50 states or because Congress changes the statute governing how Social Security Administration determines who is married.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation. Neither Camelback nor Commonwealth offers tax or legal advice.