Same-sex couples putting future in writing

Louise Young and her partner, Vivienne Armstrong, have been together for 37 years, but the same-sex couple are still two single people in the eyes of Texas law.

Like others in their 60s and approaching retirement, the Dallas women are thinking about the next stage of life and what to do if their health fails. Because they don't enjoy the rights automatically granted to married couples, they've turned to legal advisers to make sure each will have a say in the other's fate.

"We've done everything possible to draft documents that reflect our commitment to each other," Young said.

They've drawn up wills and medical directives, and they've named each other as beneficiaries on their retirement accounts to provide financial security for the surviving partner. Without those measures, most state courts would regard them as strangers.

The two women plan to wed in California this summer to celebrate their life together, now that the California Supreme Court allows same-sex marriage. But the rights they gain by exchanging vows will be left behind when they return home: Texas and several other states ban gay marriage.

"For all the jubilation about the California court decision, same-sex couples in Texas still need to sit down with attorneys and financial planners to protect themselves," said Ken Upton, an attorney for Lambda Legal in Dallas.

Experts say gay and lesbian boomers are showing more interest than earlier generations in estate and retirement planning. That's partly because the overall population is older, but it's also because more of today's same-sex couples are leading open lives and have no qualms about calling on legal and financial advisers.

Without wills, same-sex couples risk having the state pass their belongings on to relatives rather than their partners, said Dallas attorney Rebecca Covell.

A common reason for gay and lesbian couples to seek legal counsel, Covell said, is to protect their homes. With married couples, a home's ownership can pass automatically to the surviving spouse upon death. But it's not so simple for gay couples. In the worst cases, the surviving partner may lose the house.

Covell suggests joint ownership with right of survivorship. That way, both partners own the home together rather than each holding a share of it. If one dies, the other owns the entire property.

Estate plans cost several hundred to several thousand dollars. A carefully prepared will and supporting documents are worth the investment because the estates of gay and lesbian people are more likely to encounter challenges from family members, said Lara Schwartz, legal director for the Human Rights Campaign.

Covell urges gay clients to consult a financial planner experienced in this niche of the market, since same-sex couples face complications in planning for retirement.

Gay and lesbian couples can't draw the Social Security survivor benefits available to married couples. Likewise, few traditional defined-benefit pension plans allow surviving partners of same-sex couples to continue receiving their deceased partner's benefits, said Gary Brownfield, a certified financial planner with GB Financial Services in Plano, Texas.

Same-sex couples also are likely to face higher costs for long-term care, since they may not be able to call on children as caregivers, said Carol Meyer, first vice president of investments for the Merrill Lynch Private Client Group in Dallas.

"Gay boomers are starting to ask, 'Who's going to take care of me?' I recommend that they sock away savings in their 401(k)s and buy long-term care insurance or an annuity, because they'll probably need more money for care," she said.

Same-sex couples got a break, however, when Congress approved the Pension Protection Act of 2006. Nonspouse beneficiaries of retirement plans can now roll inherited funds directly into a tax-deferred individual retirement account. Before the law, they had to withdraw the money as a lump sum, which often meant taking a big tax hit.