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Understanding Exactly What’s at Risk

Staff Writers

A function of Social Security is to be an old age pension plan supplement.  It also offers survivor benefits for a physician’s spouse and children.  The benefit is not paid to a live-in companion, however. 

Social Security also offers a disability payment for those unable to work.  This benefit will be available to those who qualify, but calculated at a single individual’s rate for those unmarried. 

One area where a bonus may be earned is the old age pension program. This will be paid to every qualifying individual.

In other words, if both you and your significant other qualify for maximum benefits, these will be received for your lifetime.  You will not be subject to a reduced survivor benefit.

Medicare pays health insurance benefits based upon the individual.  These benefits will be affected by a non-traditional relationship.  Yet, the family pieces of this puzzle are missing under current Medicaid guidelines.

Marriage Benefits 

The federal and state governments, as well as corporate America, confer many benefits, protections and obligations to married couples, among them: 

• Assumption of spouse pension
• Automatic housing lease transfer
• Automatic inheritance
• Bereavement leave
• Burial determination
• Child custody
• Confidentiality of conversations
• Crime victim’s recovery benefits
• Divorce and domestic violence protection
• Exemption on property tax upon partner’s death
• Family leave to care for sick partner
• Immunity from testimony against spouse
• Insurance benefits and breaks
• Joint adoption, foster care and custody
• Joint bankruptcy
• Joint parenting to care for partner
• Medical decisions on behalf of partner
• Property rights
• Reduced rate membership
• Social security benefits
• Tax advantages
• Visitation of partner’s children
• Visitation of partner in hospital or prison
• Wrongful death benefits

The Estate Tax Penalty 

Estate law is unforgiving and its penalties are truly gender and relationship blind.

As an example, the powerful first tool in a well-written estate plan, the unlimited marital deduction, is not possible.   This is a fact which must be recognized and dealt with in a proactive manner. 

Do not be misled by your local or state law that may recognize a relationship involving a significant other. The federal estate tax code simply does not exist for such a relationship. 

Have you been affected by any of the above?

Filed under: Financial Planning | Tagged: Financial Planning |