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DW_a_mom
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06 Aug 2010, 5:54 pm

Just FYI, I haven't read carefully enough to be sure if this has already been brought up, but marriage creates an effect in the State of California (the state at issue when discussing prop 8 ) that cannot be duplicated through legal documents, and that is what happens to the tax basis of property legally held as community property (which can only be done if the couple is married) when one member of the community (ie the couple) dies. Under the US tax laws, even though only the deceased spouse's half of the property is potentially subject to estate tax, both halves will adjust to fair market value. Thus, when my father passed away, a home that was purchased for $30,000 acquired a federal income tax basis of $1,000,000 comletely automatically with no adverse estate tax consequences. My mother can now sell the home at any time without worrying about the $485,000 appreciation that happened on her half during their life time together. All because the home was held in the official title of community property.

Any married couple living in a community property state who still holds title on appreciated property as joint tenants rush over to the recorder's office and quit claim a title change - I've just saved you a ton of money. Although, this is just a message board post and not official legal or tax advice.


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zer0netgain
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06 Aug 2010, 8:24 pm

visagrunt wrote:
I am not talking about the proceeds of insurance policies, I am talking about a surving spouse's entitlement to a continuation of a deceased spouse's income from an annuity or a pension.

For example, my father receives superannuation pension income. If he predeceases my mother, she will continue to receive 50% of his pension payments until her death. If my parents were not married, however, she would not be entitled to it. There is no way for individual workers to require their pension plans to provide survivor benefits outside the class of persons who are designated to receive them.


That is an interesting concern. However, I think it is going to be moot in the long term.

1. Companies wanting qualified people will adapt their pension plans to be more inclusive.

2. At the rate things are going, and the legal way they can redefine pension plans even after you retire, nobody is going to be getting a benefit from employers is a couple of decades.

Heck my grandmother got shafted out of her husband's pension benefits because the company got him to agree to stay on a couple of extra months to transition a replacement. He died a couple of weeks later. He never submitted the paperwork so she got NOTHING. Thankfully, he had the foresight to not just rely on that pension and had a substantial amount saved up elsewhere.

This was back in the 1970s....nothing new.

So, I suppose I don't see this as being a critical issue. How many people out there (gays/lesbians) are in a position to get such a benefit from their "pensions?" How many really think they will get anything by the time they retire with the rate things are changing (just look up AARP articles on this topic)? Anyone with any sensibility should be pouring their retirement plan into something THEY control, and if you're gay/lesbian, something YOU determine who gets the benefit if you die.

Plans as you discuss are passing away very quickly.



visagrunt
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09 Aug 2010, 11:25 am

zer0netgain wrote:
That is an interesting concern. However, I think it is going to be moot in the long term.

1. Companies wanting qualified people will adapt their pension plans to be more inclusive.


Companies may be unlikely to vest new benefits that have not previously been provided for in the actuarial assumptions. An extended annuity obligation tomorrow, based on pension contributions made yesterday creates a significant deficit today.

Companies are only likely to do this voluntarily in respect of pension contributions made from the point of the change forward.

Quote:
2. At the rate things are going, and the legal way they can redefine pension plans even after you retire, nobody is going to be getting a benefit from employers is a couple of decades.

Heck my grandmother got shafted out of her husband's pension benefits because the company got him to agree to stay on a couple of extra months to transition a replacement. He died a couple of weeks later. He never submitted the paperwork so she got NOTHING. Thankfully, he had the foresight to not just rely on that pension and had a substantial amount saved up elsewhere.

This was back in the 1970s....nothing new.


Potential mootness does not mitigate the issue. If nobody is going to be getting a benefit from employers in a couple of decades, then why not just admit that social security is going to have to carry the whole bag, and start paying for it now? Because that's lousy public policy, that's why.

If you have a retirement savings system, then make sure it works. Don't plan for failure.

Quote:
So, I suppose I don't see this as being a critical issue. How many people out there (gays/lesbians) are in a position to get such a benefit from their "pensions?" How many really think they will get anything by the time they retire with the rate things are changing (just look up AARP articles on this topic)? Anyone with any sensibility should be pouring their retirement plan into something THEY control, and if you're gay/lesbian, something YOU determine who gets the benefit if you die.

Plans as you discuss are passing away very quickly.


Well, for one thing, look at the entire public sector. The public sector represents the largest group of supperannuation plan members, for whom participation is, generally, mandatory. (And, for whom the survivorship issue is most clearly no amenable to private contracting!)


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