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Understanding Domestic Partnership Problems

[By Staff Reporters]

Legal Strangers

In spite of many changes to state laws and with a few exceptions, for all intents and purposes, unmarried physician couples are still considered strangers to one another. The unmarried partner has no right to make health care decisions, no right to Social Security survivor benefits, and no inheritance rights without proper documentation. An unmarried partner generally has no standing to seek damages for the “wrongful death” of a spouse, nor any standing for any other contractual rights.

Tax Treatment

Unmarried couples do not get the same tax treatment—such as the ability to file a joint tax return—as do married couples. While this may not necessarily mean higher taxes for married couples, it can make deductions difficult to determine for unmarried couples. Nor can an unmarried couple use the spousal Individual Retirement Account deductions for a nonworking spouse. An unmarried couple may not use a family partnership for tax purposes.

Non-Tax Benefits

Unmarried partners do not have the benefits that spouses have when a relationship ends or one partner dies. Domestic partners may not receive alimony or child support, except in special cases. A partner may not receive pension rights, and generally will not receive employer benefits, except in certain companies and municipalities. One partner who is forced to quit practice when the other partner is transferred may not receive unemployment benefits, while a spouse can. Unmarried partners may not qualify to get residency status for a non-citizen partner to avoid deportation.

Estates and Gift Problems

Estate tax law allows married couples an unlimited deduction for estate and gift tax purposes. Unmarried couples do not get this benefit, and may be taxed on what would otherwise be a tax-free transfer. If one partner dies intestate (without a will) the couple’s joint property would not necessarily go to the survivor. A married couple can give away $26,000 per recipient each year without gift tax consequences, but an unmarried individual with a high income is limited to $13,000, per recipient per year, even when living with a partner.

Personal Benefits

Domestic partners may be kept from visiting a partner in a prison or in the hospital or any other place restricted to “immediate family” members. Without specific legal permission, such as a durable power of attorney, the blood relatives of the partner who is ill can keep the domestic partner from seeing his or her mate. Except in a few municipalities and companies, domestic partners may not be eligible for bereavement leave when one partner dies.

Conclusion

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Filed under: Accounting, Estate Planning, Ethics, Financial Planning, Insurance Matters, Investing, Portfolio Management, Professional Liability, Recommended Books, Retirement and Benefits, Risk Management, Taxation | Tagged: domestic partnerships, Estate Planning, financial planning gay couples, gay, gay doctors, gay financial network, gay financial planning, gay physician's network, gay physicians, homosexual doctors, IRA, legal stranger, lesbians, non-citizen spouse, spousal benefits, unmarried doctors, unmarried partners, unmarried physicians | 18 Comments »