In a historic 2014 ruling, the U.S. District Court in Whitewood v. Wolf made same-sex marriage legal in Pennsylvania. This ruling, while finally allowing a sizable segment of the population the same legal freedoms heterosexual couples have always enjoyed created problems for some same-sex couples that had done their best to take care of one another in a pre-Whitewood world.
Prior to the legalization of same-sex marriage, it was not uncommon for same-sex couples to go through an adult adoption. This was the only method available to them to create a legal family unit. By one partner adopting the other, couples were able to enjoy some of the protections and benefits only available to families. One of those benefits was a reduction of inheritance taxes. Prior to the Whitewood ruling, when one partner of a same-sex couple died, the other partner would have to pay 15% inheritance tax because the surviving partner was simply viewed as “other heir” under the tax code. Imagine paying 15% tax on assets you helped acquire during your relationship, while married heterosexual couples were taxed at 0% on the same inheritance. By adopting one’s partner, same-sex couples created a legally recognized family unit and reduced inheritance to the 4.5% of lineal heirs. While a vast improvement, the solution was far from perfect.