How marriage can benefit gay couples

Financial planners in Pennsylvania are advising their same-sex-couple clients: Get married already!

Gay marriage became legal in the state last year - like New Jersey and Delaware, it's among 37 states recognizing such unions - and that affects retirement planning, Social Security benefits, and estate planning.

Financially, there are a lot of benefits when you get hitched.

"By getting married, same-sex couples are now treated equally under state law and would not have to pay the Pennsylvania 15 percent estate tax if one spouse dies," says Brad Bernstein, senior vice president of wealth management at UBS in Center City.

Same-sex couples can take advantage of other estate-planning moves, too:

Portability. In recent years, President Obama made permanent the portability of a lifetime estate-tax exemption for people with assets of up to $5.3 million.

"If I die, my wife files an estate tax return and elects portability under that exemption," Bernstein says. "When the second spouse dies, the children are federally estate-tax-free as well."

Social Security survivorship benefits. "We always look at a couple's benefits under Social Security to make sure that when one dies," he says, "the living spouse gets the highest benefit."

IRA rollovers. If one spouse dies, the other should become the beneficiary of his or her individual retirement account, which can continue to grow in a tax-deferred manner.

Spousal IRA contributions. If one spouse is working and the other is not, the working spouse can contribute up to $5,500 a year to the nonworking spouse's IRA. Previously, same-sex couples in Pennsylvania were not able to make these contributions into each other's savings accounts. Now, they can.

"Same-sex couples need to meet with estate attorneys to review their wills, powers of attorney, and advanced health-care directives, just as opposite-sex couples do," Bernstein says. "They need to get married and take advantage."

Planning for the staggering cost of college? The local accounting firm Isdaner & Co. will host a seminar June 23 to address this horrifying fact: Fifty private colleges now charge more than $60,000 a year.

Since 1978, college tuition has increased 1,225 percent, according to data from Bloomberg.

Benjamin Cummings, a certified financial planner and an assistant professor at St. Joseph's University, will discuss: how FAFSA (Free Application for Federal Student Aid) determines financial need; how to identify major federal financial-aid programs; differentiating between subsidized and unsubsidized loans; tax-advantaged education savings vehicles; and other tax strategies (education credits, student-loan interest deduction).

The seminar is scheduled for 8:30 a.m. at the Isdaner Learning Center, Three Bala Plaza, Suite 501 West, Bala Cynwyd. For more information, call Jill Lock at 610-668-4200.

If you think the European stock market's performance is lagging a few years behind that of U.S. stocks, there's a rally in your future.

"We've been selling a little bit of our U.S. equity exposure" and moving some money into European markets, says Adam T. Sherman, chief executive officer of Firstrust Financial Resources in Center City.

"Europe looks like the U.S. market did two years ago," Sherman says, and the U.S. market will likely end up with gains of 7 percent to 8 percent for the full year 2015.

There are a few ways to express that in a portfolio. One is a straight investment in a European stock market index - the Euro STOXX 50 Index, Europe's version of the S&P 500 or the Dow - or via an exchange-traded fund such as the SPDR Euro STOXX 50 Fund (FEZ).

There are even "hedged" investments that aim to counteract the exchange rates of different countries. WisdomTree Europe Hedged Equity Fund (HEDJ) is one of these exchange-traded funds and provides exposure to eurozone stocks while neutralizing the currency risk relative to the U.S. dollar.

Another ETF that Firstrust's wealth-management group employs is iShares MSCI Germany (EWG), which tracks the performance of publicly traded securities in the German market.

215-854-2808 @erinarvedlund