Im­pli­ca­tions of same-sex de­ci­sion for older cou­ples

Texarkana Gazette - - MONEY MONDAY - By Janet Kidd Stewart

Cau­tion was the watch­word fi­nan­cial plan­ners had for same-sex cou­ples con­tem­plat­ing mar­riage in the wake of the Supreme Court de­ci­sion mak­ing those unions le­gal na­tion­wide.

“We say to peo­ple, ‘Walk, don’t run, down the aisle,’” said Steve Bran­ton, se­nior fi­nan­cial plan­ner with Mo­saic Fi­nan­cial Part­ners Inc. in San Fran­cisco, re­fer­ring to the maze of tax and re­tire­ment im­pli­ca­tions that ac­com­pany mar­riage.

And, just as of­ten hap­pens in the straight world, many cou­ples promptly ig­nored that ad­vice and started run­ning—or at least bik­ing.

Thrilled by news of the de­ci­sion while on an ex­tended va­ca­tion in Ore­gon, Au­drey Block and Carol Farr, who live in Ari­zona, jumped on a cou­ple of bikes and rode straight to a county li­cens­ing bureau.

“There’s a three-day wait­ing pe­riod, but our mar­riage li­cense will have to­day’s date on it,” said Block, 63.

It wasn’t ex­actly an im­promptu, Ve­gas-style wed­ding. The cou­ple has been to­gether for 21 years.

Like­wise, long­time part­ners Graham McReynolds and Clay France sent out wed­ding in­vi­ta­tions in April for an early July wed­ding on the hope that it would be right af­ter a fa­vor­able rul­ing. They live in Idaho, where a same-sex mar­riage ban had al­ready been struck down, but they were wait­ing for as­sur­ance from the high court.

Both cou­ples ac­knowl­edged they’ll have some fi­nan­cial is­sues to sort out along the way, but those are the cart, not the horse.

“We’ll end up pay­ing more in taxes, and we talked about that,” said McReynolds, 55, a semire­tired non­profit ex­ec­u­tive who is now farm­ing or­ganic al­falfa and bar­ley in Idaho with France, 50.

Their largest as­set is their 900-acre farm, McReynolds said, so hav­ing sur­vivor­ship rights to the prop­erty is more im­por­tant than any po­ten­tial dings from the so-called mar­riage penalty, un­der which some cou­ples pay higher in­come taxes than they would as sin­gles.

Recog­ni­tion on other es­tate-plan­ning doc­u­ments was also es­sen­tial, he said.

“Many years ago, Clay was hit by a car, and I wasn’t al­lowed in the emer­gency room,” McReynolds said, an ex­pe­ri­ence that left them crav­ing a sense of se­cu­rity about le­gal and fi­nan­cial mat­ters. “It’s im­por­tant that we know with­out any wor­ries that we have shared as­sets.”

With many cou­ples to­day de­cid­ing not to marry later in life be­cause of com­plex fi­nan­cial lives, the sen­ti­ment is worth not­ing. Ex­perts also say they’ll be watch­ing for a po­ten­tial scal­ing back of ben­e­fits com­monly af­forded to un­mar­ried cou­ples now that ev­ery­one has the le­gal right to marry.

Here are a few is­sues that ex­perts said older cou­ples should dis­cuss:


Means-test­ing rules for Medi­care could mean higher premi­ums for some same-sex cou­ples on two lev­els, said Mer­rill Matthews, res­i­dent scholar with the In­sti­tute for Pol­icy In­no­va­tion in Dal­las. Fewer same-sex cou­ples have a stay-at-home spouse, so as a group they tend to­ward higher in­comes, mean­ing more may be caught up in means test­ing, Matthews said. (Higher premi­ums for Parts B and D kick in at $85,000 for in­di­vid­u­als and $170,000 for cou­ples).

And in cou­ples with sub­stan­tially dif­fer­ent in­come lev­els, the lower-earn­ing spouse who might oth­er­wise not be sub­ject to higher rates could be pulled into that cat­e­gory, ex­perts said.


Even cou­ples with sub­stan­tially sim­i­lar pro­jected ben­e­fits (mean­ing their ben­e­fits on their own work record would be higher than any po­ten­tial spousal ben­e­fit) should re­view their So­cial Se­cu­rity claim­ing strate­gies. Some­times, it makes sense for one spouse to file for ben­e­fits and then sus­pend them to earn de­layed cred­its up to age 70, while the other spouse claims re­duced ben­e­fits.

Also keep in mind that re­mar­riage can ter­mi­nate spousal ben­e­fits for some di­vorced re­cip­i­ents.


Mar­ry­ing into a part­ner’s past debt is ob­vi­ously some­thing for dis­cus­sion, but so are fu­ture debts. Fig­ure out how you’ll han­dle a lengthy nurs­ing home stay, for ex­am­ple.


Wid­ows and wid­ow­ers can roll their de­ceased spouses’ IRAs di­rectly into their own, al­low­ing the money to con­tinue to grow in­side the ac­counts, notes Holly Han­son, founder of Har­mony Fi­nan­cial Strate­gies in Los An­ge­les.


In ad­di­tion to sur­vivor­ship is­sues on prop­erty trans­fers, the abil­ity for cou­ples to care for their spouses as they age is crit­i­cal, even putting the fi­nan­cial cart be­fore the horse, said Stu­art Armstrong, a fi­nan­cial plan­ner in Need­ham Heights, Mass.

“I have one client cou­ple in their 70s who had no in­ten­tion of get­ting mar­ried un­til (the re­cent rul­ing),” he said. “They’re do­ing it now not only for the un­lim­ited mar­i­tal de­duc­tion but also be­cause one of them is po­ten­tially fac­ing some de­clin­ing mem­ory is­sues.”

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