A change of beneficiary and spousal benefits are key financial issues following a same-sex marriage.
Thanks to a recent Supreme Court ruling, marriage between same-sex couples has blossomed, as people who have been prohibited before exercise their new freedom to tie the knot.
But financial advisors are warning same-sex couples to look into the finances of the arrangement closely, because there are pitfalls related to their relationship that may not exist for heterosexual marriages.
This is especially true for same-sex couples who have waited years for the laws to change to allow for their marriage. As a result, they have probably reached a stage in their professional lives where they are making good money, and the combination of two incomes into a single household could have a financial effect.
According to research by UCLA’s Williams Institute, the average household income of a same-sex married couple is $105,000, much higher than the $79,000 average income for heterosexual couples. With more income comes more headaches, mainly in the form of tax issues. If a same sex couple makes enough together to hit upon tax penalties, the marriage will become expensive.
Because same sex couples usually marry later in life than heterosexual couples, and because adoption of children can be complicated and time-consuming, same sex couples do tend to have smaller families and therefore more disposable income. What to do with that extra cash is a conversation a married same-sex couple needs to have.
Then there is the paperwork that must be done to prepare for the loss of life. In most states, a spouse is entitled to a portion of the other spouse’s assets upon death, and just like heterosexual couples do, new wills or post-life documents must be forged to make sure the desires of each spouse are recognized upon death.
Same-sex couples need to examine both their health care plans and their retirement plans for coverage and beneficiary needs. There are social security benefits, property exchange benefits, and gift-tax exclusions that make the marriage beneficial.
A financial advisor can provide additional insight into how a new marriage of a same-sex couple can be both financially beneficial or potentially financially harmful.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.