Why Gay & Lesbian Couples Pay More - Page 3 of 4

Why Gay & Lesbian Couples Pay More

Smith and Johnson's civil union has no legal standing in their state of residence–Tennessee.

Federal benefits present an even bigger challenge for Kaali and LaTasha Cohen. Together nine years, the couple obtained a civil union in New Jersey in 2008. Kaali, 41, was in a severe car accident and was deemed disabled. “Because I am considered single, I receive less Social Security benefits than I would if I were in a straight  marriage. I have a spouse and a daughter [Tasha’s biological child]. But to the government my daughter ceases to exist; my wife ceases to exist. So, where my daughter should be able to get benefits because I am her stepparent, she is not entitled. My wife would not qualify for Social Security survivor benefits,” says Kaali, who is the CEO and founder of REDZONE Solutions Inc., a consulting firm in Pennsauken, New Jersey.

The Legal Fight: What’s Mine, Yours, and Ours
There is unlimited transfer of assets between traditional husbands and wives. But same-sex couples must piece together their own financial and legal protections so as to not leave their assets vulnerable in the event of a breakup or death.

Nashville, Tennessee, residents Dr. Kevin B. Johnson, 51, and Rob Smith, 57, obtained their civil union –a legally recognized form of partnership similar to marriage –in Vermont in 2006.  But their civil union has no legal standing in Tennessee. Still, “it was our way of telling people the level of commitment we have for each other,” says Johnson, who was named to black enterprise’s May 2008 list of “America’s Leading Doctors.” An upside for Johnson is that he works for a hospital that acknowledges his husband. “Vanderbilt has a domestic partnership model. Rob gets all of the spousal benefits that Vanderbilt provides; that includes 403(b) survivor benefits and use of the health facilities.” But Smith, a registered nurse, points out, “once we leave the Vanderbilt campus there is really no protection. We are essentially two guys living in the same house.” Also, Johnson adds, “because we are two divorced dads, we needed to carefully document through wills, trusts, and medical directives what we want to happen to protect our spouse if one of us dies, because we have no legal relationship in our state of residence.”

The issue of property and titling is one aspect of estate planning. Making sure a partner is named as the primary beneficiary on life insurance and retirements accounts is also especially important for same-sex couples, otherwise their assets will pass to a parent or other relative, says Mel Kornegay, a West Palm Beach, Florida-based Wells Fargo adviser. Even so, there are financial ramifications: Whereas a widow could take her husband’s 401(k) and roll the assets over into an IRA without paying taxes, a same-sex partner as a beneficiary would need to consider several options including a lump sum distribution, opening an inherited IRA; a “stretch” IRA or life expectancy IRA; or a disclaimed IRA.

“Retirement planning and estate planning is widely burdened by marriage inequality,” says Ravi Perry, an assistant professor at Mississippi State University. “We have to take extra steps and incur added legal fees. Even after death certain state laws do not recognize or support your marriage­–making it all to common that our wishes as a gay married couple are not granted.”

Last year, Perry, 30, married his partner of more than four years, Paris Prince, 29, in Massachusetts, their state of residence. While they’ve considered relocating for work, they’re finding that marriage inequality impacts their earning potential, notes Prince, a compliance officer for the Massachusetts Commission Against Discrimination. “Discriminatory state and federal marriage laws limit potentially attractive career options for us as two highly educated and skilled young people. We must factor this state-specific discrimination into our future career plans instead of only focusing on the best opportunities to flourish professionally.”

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