Same-sex marriages raise financial-planning questions by gtm20156


									                                                                   March 25, 2004

                   Same-sex marriages raise
                 financial-planning questions
            BY JUDITH     MCGEE                     rights of the partner (spouse, husband or          enough to be included in their dependent
                                                    wife) in earnings and assets.                      benefits for health care.
                         Financial planners           In same-sex relationships, a partnership            It’s probable that same-sex marriage, if
                      have been counseling          agreement is created giving a “partnership”        legalized, would fall under divorce law – the
                      same-sex couples for          interest in the assets chosen to be included       dissolution of a marriage contract, which is
                      some time and think of        in the partnership. Estate rights are general-     another financial agreement. Couples living
                      each relationship as a        ly described in each will or trust, and on         together and sharing financial assets may
                      financial partnership.In      beneficiary forms. Heterosexual married            have legal issues now if they have co-min-
                      traditional marriages,        couples have a right to “roll”pensions from        gled assets indicating a financial partner-
                      the state looks at it as if   the spouse to their name upon the death of         ship.
it were a contractual right. States have laws       the owner without current income tax.                Which raises a question: If it is the intent
when you die – for example, you cannot              Any person who is a beneficiary can exe-           of the couple to share all financial holdings
disinherit a spouse. In Oregon, the spousal         cute an individual retirement account              how does dissolution affect support agree-
rights are 25 percent, so you have to at least      stretch-out provision using his or her actu-       ments and alimony?
leave your spouse 25 percent. In some states        arial age to draw money from the IRA. The            For those who’ve been through legal
(community property states), the spouse             younger the person, the less he or she will        divorce, they may have preferred a partner-
may have a right to everything on death.            draw.                                              ship contract – one they independently
Each state law has a will already written             Any asset you own that has a beneficiary         negotiated without the mandate of state
depending on each state’s individual idea of        election will bypass your will unless you’ve       law.
the “marriage contract.”                            specifically listed your will or estate as the       Prenuptial agreements or prenuptial con-
   So what’s the standard in Oregon?                beneficiary. An experienced financial plan-        tracts are advised in many relationships,
   “In my experience with couples who plan          ner and attorney should be consulted when          inside or outside of marriage.
in advance, most, including same-sex cou-           making beneficiary decisions. Some people            Civil and religious marriages are two sep-
ples,prefer to leave everything to the surviv-      think their financial affairs are in order in      arate institutions. Civil marriage binds a
ing spouse or partner first and then alterna-       their will but may make serious estate plan-       couple in a legal contract consisting of obli-
tively plan for their children if the spouse        ning mistakes.They may even have conflict-         gations and benefits. While some religions
does not survive,” said attorney Jim                ing directions – their will giving assets to one   provide ceremonial services for same-sex
McVittie.“It should also be mentioned that          person and the beneficiary another.                couples, these unions do not receive legal
Oregon is not a community property state.             Same-sex marriage may be disadvan-               recognition. Same-sex marriages would
For newly married couples, that means a             taged in some of the areas of “spousal”            have as much risk as other marriages for all
spouse does not automatically jointly own           rights under tax law and property law.             the legal issues around marriage, divorce,
the assets of the other spouse. Proper plan-        However, some of the planning tools can            death, children and even liability suits.
ning and retitling of assets is necessary if        help equalize many of the situations with-
joint ownership is the goal. So, even with          out state law. Every relationship, no matter
same-sex marriages it is still important to         the sexual orientation, in or outside legal        Judith A. McGee is president and CEO of McGee Financial Strategies
see an attorney to draft a proper estate plan       marriage should have a proper agreement,           Inc. in Portland. She is a nationally recognized author and lecturer on
                                                                                                       financial planning, and serves as an expert witness in divorce and dis-
that meets the individual’s goals.”                 whether it’s a partnership agreement or an         solution cases. For questions or comment, contact McGee, 503-597-
   It also helps to think of financial areas in     estate plan. Some companies view non-              2222; e-mail,; on the Web at
marriage as a civil contract relating to the        married relationships as significant     

                                        Reprinted from the Daily Journal of Commerce

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