Planning Benefits for Domestic Partners

The legal wrangling over gay marriage in California in recent weeks has gotten a lot of attention for potentially expanding or limiting the rights of gay couples.

But aside from the cultural benefits that are at stake and the precedent that will be set by the ultimate decision, relatively few stand to receive any financial benefits. Of the more than six million unmarried-partner households, just under 780,000 are gay, according to the Census Bureau. Of those, only 3% are in Massachusetts - the sole state where gay marriage is legal - and 14% are in California, where there's a good potential it will be legal soon.

"We kinda hear this stuff on the news and think these people are getting the same rights as married people, but that's so not the case," says Harlan Levinson, a Los Angeles-based accountant who warns that gay married couples can face a higher tax bill today than if they had remained single. "These people still need to have a living will, power of attorney and to sit down with an attorney or financial planner."

By and large, gay couples - and domestic partners in general - need to protect themselves proactively when it comes to their fiscal health. At the very least, a will, power of attorney and medical power of attorney should be in place, says Loreine Smith, a financial planner with Dallas-based firm Life Plan Strategies.

She also suggests couples make sure assets are titled properly and that arrangements are made for medical issues, retirement, child custody and estate planning. "It becomes very important in case one pre-deceases the other or in case they split up," says Smith. "If it's after the fact, there isn't a whole lot they can do."