Small steps have been taken to bring equality to LGBTQ persons. Same-sex marriages are allowed in more states than ever, many favorable changes have been made in the work place, and it is just a matter of time before a challenge to the federal Defense of Marriage Act (DOMA) is brought before the U.S. Supreme Court. However, since the fight is far from over, here are some retirement planning considerations available for LGBTQ individuals and couples:
401(k) beneficiaries
Due to recent changes in federal laws, an employee can now name a non-spouse as a beneficiary of their workplace retirement account. If an employee was hired prior to 2010 and they wish to update their beneficiary, they should talk to their human resources department.
Pension Survivor Benefits
The current federal laws don’t allow LGBTQ couples to receive social security spousal and survivor benefits from their partner. However, if the employee works for a company with a defined benefit pension plan is to list the LGBTQ partner as the survivor. Although you have to purchase insurance for the survivor benefit, the beneficiary’s ability to receive extended lifetime annuity-style income is protected.
Retiree Health Insurance
Some employers will provide access to health insurance for retirees, which you may be able to extend to cover your LGBTQ partner. Another option is coverage through Medicare. If a legally married LGBTQ has accumulated enough work history to qualify for Medicare A without a premium, their spouse will receive the same coverage. If insufficient work history exists, the spouse can still pay the health insurance premium, but it is costly.
Michael Robinson, Estate Planning Attorney
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