As we move into the long election cycle, marriage is once again at the forefront of the national conversation surrounding the LGBT community. Politics aside, it is important to understand that according to the General accounting Office there are 1,138 benefits, rights and privileges contingent on a couple’s marriage status. until gay marriage is legal in Texas, there are numerous ways you can uniquely recognize your relationship status. Below, irma Hampton, CrPC®, Financial advisor and vice President at Ameriprise Financial, explores some of the conversations you should be having with your accountant, attorney, financial advisor, doctor and most importantly, family, no matter how you choose to define your relationship.
SAME-GENDER COUPLES CAN BENEFIT FROM PROFESSIONAL WISDOM
Sexual orientation may determine your life partner, but it shouldn’t determine whether you seek guidance in impor- tant areas of your life. Lesbian, gay, bisexual or transgender (LGBT) couples who want to protect their status need the help of qualified professionals in the legal, medical, tax, insurance and financial fields. Because same-gender couples are treated differently under the law, they need to build their own protections with the help of supportive professionals.
While married heterosexual couples are afforded certain benefits under state and federal laws after they are married, same-gender couples in committed relationships do not receive the same treatment. As a result, they must take extra steps to ensure the welfare of both partners in the event one becomes ill, becomes unemployed, dies or experiences another of life’s calamities. The same holds true for heterosexual couples that choose not to get married but share assets or have children together.
It’s important for same-gender couples to choose service providers they trust and with whom they can be open about their relationship. Work with professionals who can help you find opportunities to establish legal safeguards where they do not exist.
The federal Defense of Marriage Act (DOMA) defines marriage as a legal union between one man and one woman for purposes of all federal laws and provides that states need not recognize a marriage from another state if it is between persons of the same sex. Forty states have their own DOMA. There are more than 1,000 federal laws that cover married couples that unmarried couples will need to replicate as well as possible in a legal document. These include wills (especially revocable living trusts and pour-over wills), advance healthcare directives, health-care authorization proxies, durable powers of attorney such as a Health Insurance Portability Accountability Act (HIPAA) release, and cohabitation/domestic partnerships and parenting agreements. Enlist a good lawyer who is familiar with the unique challenges of protecting partners outside of marriage laws to help close the gap in legal protections. Legal documents can help partners protect their ability to make health care decisions, maintain custody of children and manage shared assets in the event one partner becomes incapacitated or dies.
And because all relationships can go sour, those in same-gender relationships don’t have legally recognized marriage documentation, which requires proper documentation to dictate how to split assets if the relationship were to ever dissolve. With proper documentation, parameters can be established to protect both parties in case there is a split.
In the event of serious illness, same-gender couples can also enlist the help of their healthcare providers to ensure their rights are protected. As long as you have the required legal documents, you can preserve the right to receive medical information regarding your partner’s care and make decisions as allowed by the health care directive in place. However, it can be up to the hospital or the state in certain circumstances.
A competent tax professional can help same-gender couples find ways to minimize state and federal taxes on their income. It is extremely important to keep records of who contributes what, because ownership, tax liability and deductions are based on percentage of contribution.
Insurance is an important tool that can help same-gender couples protect their assets. Talk to an insurance agent or financial advisor and purchase appropriate levels of life insurance, disability insurance and other policies that can replace income in the event one partner becomes disabled or dies.
Last, but certainly not least, a qualified financial adviser can help unmarried partners create a financial plan that considers all aspects of their financial well-being. This includes Social Security, pension, inheritance, tax filing, federal benefits, etc. to protect the rights of both partners. A financial planner may also help partners establish other income-replacement strategies.
This column is provided for informational purposes only. The information is intended to be generic in nature and should not be applied or relied upon in any particular situation without the advice of your tax, legal and/or your financial advisor.Neither Ameriprise Financial nor its advisors or representatives provide tax or legal advice. The views expressed may not be suitable for every situation. Consult with qualified tax and legal advisors concerning your own situation.
Neither ameriprise Financial nor its representatives or affiliates provide tax or legal advice. Consult with your tax advisor or attorney regarding specific issues.
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