How do I handle a colleague's gender change when citing their paper?

Is it an option to ask M Smith if she would be ok if the first citation were to read as the following?

Smith, M. (published G.) 2014, recent advances in foo, international journal of foo sciences 12:56, 427-865

This would eliminate the only reason I can think of for misgendering the person, namely that readers might be unsure whether they are looking up the correct source. This would be a weak reason, though, since we have DOIs (Digital Object Identifiers) now.

Edited on second thought: What is the worst thing that could happen if you use the new name? Someone might find it more difficult to look up the paper; that's a minor inconvenience. Compare this to the frustration, if not anger and distress, that it would cause M. Smith to be referred to in cold print by a name that doesn't reflect her identity and that she is struggling to leave behind.

One of the primary goals of citing literature is to help others find that literature. Citing a paper differently than it exists in a journal is antithetical to this goal. Unless Smith changes George to Mary on the article you are citing, you should cite it as it exists.

This is really making a mountain out of a mole hill. Do the thing that will make the author happy. Even hyper famous papers have all sorts of oddities and mistakes in them; it is likely that nobody is even going to notice this. On the subject of citations: