Same-Sex Couples Should Write Down All Agreements

Same-sex couples do not have the same automatic presumption of intestate inheritance as married heterosexual couples do. Updating beneficiaries and putting assets in the name of a partner before death are even more important steps for same-sex couples to take.

Other precautions involve insurance benefits. Some insurance companies allow a client to add their partner to the health plan, but there is a penalty imputed income. A client who lives with his/her partner can also name that partner as a health care dependent if the insured provides over half of the other partner’s annual support. For Medicaid purposes, same-sex partners may now be treated as legal spouses with some limits.

Partners do not get social security benefits, but the pension holder can take the benefit as a lump sum and then turn that into an annuity so the partner can then have survivorship benefits. In most states also, assets can be transferred on death, which would avoid probate. The main rule with all arrangements for same sex couples is to write all agreements down.

See Martha C. White, Commingled Finances, Financial Planning, Sept. 1, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.