WEEKLY INSIGHTS
In This Issue
July 21, 2014
GIC Weekly: July 14, 2014
European Ennui. ECB actions have yet to catalyze next upleg;
equities hobbled by negative earnings revisions, extended valuations,
tepid demand, a strong euro, weak credit growth and low inflation;
bank restructuring should be in place late this year.
Chasing Emerging Markets. EM driven by global liquidity,
perception of low relative valuation and country specifics; but
fundamentals remain weak, money growth slowing and risks to US
rates and oil remain. China is best story-and it has valuation support.
The Impact of DOMA's Overturn: A Year Later
With the first anniversary of the Defense of Marriage Act (DOMA) overturn
approaching, Morgan Stanley is privileged to serve the changing wealth
management needs of the lesbian, gay, bisexual and transgender (LGBT)
community. While the DOMA decision marked a significant milestone toward
national equality, the wealth planning process still involves legal and financial
challenges for same-sex couples.
Investing in the securities of such companies and countries involves certain consideration not
usually associated with investing in developed countries, including political and economic
situations and instability, adverse diplomatic developments, price volatility, lack of liquidity
and fluctuations in the currency exchange.
Tax laws are complex and subject to change. This information is based upon current federal
tax rules in effect at the time this was written. Morgan Stanley and its Financial Advisors do
not provide tax or legal advice. This material was not intended or written to be used for the
purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are urged
to consult their personal tax or legal advisors to understand the tax and related consequences
of any actions or investments described herein.
CRC: 967864 07/2014
Dennis Taylor, CFP®
Financial Advisor
Financial Planning Specialist
4760 Fashion Square Blvd
Pineridge Resource Center
Saginaw, MI 48604
989-791-7676
Fax: 989-791-7699
dennis.james.taylor@mssb
.com
http://www.morganstanley
fa.com/taylor
GIC Weekly: July 14, 2014
GIC Weekly: July 14, 2014
• European Ennui. ECB actions have yet to catalyze next upleg; equities hobbled by negative earnings revisions,
extended valuations, tepid demand, a strong euro, weak credit growth and low inflation; bank restructuring should be in
place late this year.
• Chasing Emerging Markets. EM driven by global liquidity, perception of low relative valuation and country
specifics; but fundamentals remain weak, money growth slowing and risks to US rates and oil remain. China is best
story-and it has valuation support.
Read the full report.
2
The Impact of DOMA's Overturn: A Year Later
The Impact of DOMA's Overturn: A Year Later
With the first anniversary of the Defense of Marriage Act (DOMA) overturn approaching, Morgan Stanley is
privileged to serve the changing wealth management needs of the lesbian, gay, bisexual and transgender (LGBT)
community. While the DOMA decision marked a significant milestone toward national equality, the wealth planning
process still involves legal and financial challenges for same-sex couples.
First, the good news:
Federal tax equality allows all lawfully married same-sex couples to share all federal estate, wealth transfer
and gift tax benefits, regardless of their current state of residence.
They may file a joint tax return and be eligible for more than 1,000 federal benefits that could lower estate and
income taxes, provide more affordable health care insurance, and introduce Social Security spousal and
survivor payment benefits.
Heirs and estates that may have previously been denied tax equality can use existing IRS procedures to
retroactively amend federal estate tax and gift tax filings for the prior three tax years-again, regardless of their
current state of residence.
While state of residence may have no bearing for federal tax filing, it does affect state filings. At last count, 17 states
(and the District of Columbia) recognized all marriages equally. Of the remainder, 22 do not recognize gay marriage
but do base their state taxes on federal tax forms for couples. This creates many of the new complications for married
couples and those contemplating marriage, according to the Tax Foundation:1
Six states-Alabama, Arizona, Kansas, North Dakota, Ohio and Wisconsin-require married same-sex couples to
apportion the income and deductions from their federal returns and use those numbers to file individual state
returns.
Twelve states-Georgia, Idaho, Indiana, Kentucky, Louisiana, Michigan, Nebraska, North Carolina, Oklahoma,
South Carolina, Virginia and West Virginia-require married same-sex couples to create pro forma federal tax
returns as individuals and then use the information from those dummy returns to complete their state tax
filings.
Three states-Colorado, Missouri and Oregon-explicitly allow all taxpayers who qualify for joint filing on
federal returns to file their state taxes jointly regardless of any other existing state laws.
One state, Montana, asks taxpayers in same-sex marriages to file as single adults, but also says that the state
does not verify marital status information.
Couples in other relationships, such as civil unions and registered domestic partnerships, may not be eligible for
benefits if they reside in states that don't recognize their unions. This has left a "patchwork" of equality whereby each
state can determine the rights of LGBT couples under that state's laws.
To assist the LGBT community during these transitional stages, Morgan Stanley has Financial Advisors around the
country who specialize in serving LGBT clients, including Accredited Domestic Partnership Advisors (ADPA) for
those couples who are considered to be unmarried in either state or federal law. Our goal is to help same-sex couples
work through the legislation to obtain the optimal wealth management plan for themselves and their families. Simply
stated, all LGBT couples should review their planning options based on existing state laws. There are ways to mitigate
these inequalities and smooth many of the bumps in the road for couples (and individuals) trying to plan their finances.
Morgan Stanley continues to pursue diversity in every aspect of its business and has been recognized as a top company
for LGBT employees. Earlier this year, the Human Rights Campaign-the largest national lesbian, gay, bisexual and
transgender civil rights organization-named Morgan Stanley a leading employer of choice for LGBT employees. In
addition, Morgan Stanley was honored by Work Life Matters magazine as a Top Company for LGBT Equality in 2013.
Learn more about the implications of the overturning of the Defense of Marriage Act at
http://www2.morganstanley.com/wealth/general/pdfs/doma2014.pdf. 1 Joseph Henchman and Chris Stephens, "States
Provide Income Tax Filing Guidance to Same-Sex Couples," The Tax Foundation, Special Report No. 213, 14 January
2014.
Tax laws are complex and subject to change. This information is based upon current federal tax rules in effect at the
time this was written. Morgan Stanley and its Financial Advisors do not provide tax or legal advice. This material was
not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer.
Individuals are urged to consult their personal tax or legal advisors to understand the tax and related consequences of
any actions or investments described herein.
3
The Impact of DOMA's Overturn: A Year Later
Information provided herein has been obtained from sources that are deemed to be reliable. Morgan Stanley makes no
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Past performance is not a guarantee of future performance.
The material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any
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securities/instruments discussed in this material may not be suitable for all investors. The appropriateness of a
particular investment or strategy will depend on an investor's individual circumstances and objectives. This material
does not provide individually tailored investment advice or offer tax, regulatory, accounting or legal advice.
This material may not be sold or redistributed without the prior written consent of Morgan Stanley.
This material is not for distribution outside the United States of America.
©2014 Morgan Stanley Smith Barney LLC. Member SIPC.
CRC943177 [06/14]
4
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potential tax, ERISA and related consequences of any investments made under such plan or account.
Information provided herein has been obtained from sources that are deemed to be reliable. Morgan Stanley makes
no guarantees, express or implied, as to the accuracy or completeness thereof.
Past performance is not a guarantee of future performance.
The material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of
any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy.
The securities/instruments discussed in this material may not be suitable for all investors. The appropriateness of a
particular investment or strategy will depend on an investor's individual circumstances and objectives. This material
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