Gay relationships and FIRE

[Helen]

I read through the thread on pre-nups and it got me thinking about how different my situation is from most of the posters on this board.

My situation is almost the opposite of a pre-nup.  I met my partner almost 18 years ago. Neither of us had much in the way of assets, but my salary has always been a lot larger.  About three years ago I started to realize that we were creating a good size nest egg and almost everything was in my name.

So, we went to an attorney and had  a domestic partnership drafted (amongst other things) which splits everything 50/50 in the event that we spilt up.
I think this is the fair way to do things and it is important to have clarity.

I must say, there are a lot more complications in gay relationships because of the lack of civil unions than what married counterparts have.  There are a lot of inequities like lack of spousal health insurance, lack of survivorship benefits in Social Security and pensions, and estate tax exclusions that ignore same sex couples which can't be resolved by a domestic partnership agreement.  What this boils down to is that my partner and I require a larger nest egg than what a married couple would require.

I shudder to think how many more years the lack of a civil union is keeping me in the workforce.   

-helen

 

[laurence]

Helen, what state do you live in? There are a few that are civil union friendly. Vermont? If moving is what is required to retire earlier, it might be worth it. Good luck navigating the waters there.

 

[Marshac]

My brother is gay, so I understand some of the problems you're facing I'll be following this thread with interest (unless it degenerates) so I can pass on any sage advice to him.

I worked for a state university, and they recognized same-sex domestic partners when it came to health-insurance.... which made me feel warm and fuzzy until I found out that "opposite-sex domestic partners" were not covered

 

[Martha]

Helen, I trust you both also have wills/powers of attorney/health care directives?

Also, to try to equalize the assets and minimize estate taxes, if you aren't already, you could be doing regular gifting to your partner. You might even think about whether it makes sense to cut into your estate tax exemption by gifting more than the tax free maximum in order to equalize assets and allow assets to grow. I would talk to your planning attorney about that option.

 

[Helen]

Hi !

We do have wills and power of attyn set up. Also, you hit on a great point, Martha, about equalizing our individual account balances. I do take advantage of the $11k gift tax to fund my partner's after tax account. I realized if we had one joint account, the primary account holder would pay the taxes, so I set up a separate account with her as the primary holder of the joint account to split the tax burden. I am about to set up two Treasury Direct accounts for us to purchase I bonds. We'll use that money to live on when we bail at age 56.

Laurence, we live in Oregon. My partner went to school at UVM, Vermont is a bit too cold for me but a beautiful state ! I wouldn't move for a State only civil union, they really don't offer enough to make it worth while. To be effective, it has to be handled at the Federal level.

My partner's company offers domestic coverage, but I don't trust that they won't change their policy, so I am hanging on to my own coverage. I have to be on my coverage for five consecutive years before retiring to carry it into retirement. With my luck her company will change their policy a few days into my retirement - OMG !!!

Thanks all,

-helen

 

[shiny]

Also, a good idea as far as estate planning is to hold any real property as well as financial accounts as Joint Tenants with Right of Survivorship. Property held this way goes directly to the joint owner without going through probate. (that is once the property is gifted, or new accounts opened or property purchased)

If I'm not mistaken (sorry I didn't practice tax law) income from accounts held this way would be divided equally for tax purposes.

I know that many companies now recognize domestic partners (for benefit purposes), hopefully sometime soon health insurance companies will do the same ~ seems like it would open up a whole new market for them.

 

[Mountain_Mike]

nevermind...

 

[bosco]

I shudder to think how many more years the lack of a civil union is keeping me in the workforce.

-helen

Emigrate to Canada where you will be treated by the government like a human being. At your age, you can still qualify if you have a reasonable level of education and work history. It will also solve your medical coverage issues in retirement.

 

[Marshac]

Emigrate to Canada where you will be treated by the government like a human being.  At your age, you can still qualify if you have a reasonable level of education and work history.  It will also solve your medical coverage issues in retirement.

Of if you have enough cash on hand, you could go up as an 'investor' rather than a 'skilled worker'

As an investor, you must make a prescribed investment of CDN $400,000. This investment is placed with the Receiver General of Canada.

Participating provinces then use your investment to create jobs and help their economies grow. Citizenship and Immigration Canada (CIC) will return your investment to you, without interest, in approximately five years after you become a permanent resident.

Who knows, with the tanking of the USD on the forex, you might actually preserve your purchasing power by placing it in CADs rather than USDs for five years