Pump Up Your Portfolio

Whether you’re looking to secure your own financial footing or simply want to create a stable future for your partner and family, the path to success starts with a solid plan. And while the future is as impossible to predict as Washington’s next sex scandal, we know it’s coming and should be ready for it.

Contrary to popular opinion, the size of your portfolio is not nearly as important as what you do with it. “There are things that apply to people who have $10 million that don’t apply to people who have $100,000,” says Jason McDonald, accredited domestic partnership adviser and vice president-investment officer at Wells Fargo. “Regardless of how much money you have, you need to make a plan, speak to a legal professional and get your healthcare power of attorney.”

Why is the power of attorney so important? Because state and federal laws can dictate everything from hospital visitation rights to how your will is executed when you die. And for gay and lesbian couples, even those legally married in the states where they can be, the federal Defense of Marriage Act (DOMA) complicates things and strips away most of the rights and privileges for gay couples that are automatically afforded to their straight counterparts.

“Marriage is the term we want the state governments to adopt,” McDonald says. “But to me, that’s the scariest term out there right now. It makes people believe their marriage is looked at the same as a heterosexual couple’s. That’s just not the case, and it’s creating a lot of confusion.” One thing that is not confusing, at least for couples like Brant Adamczyk, 37, and Steve Turkovich, 35, of Buffalo, New York, is the fact that they are being taxed on the exact same family health insurance plan most heterosexual couples and their families enjoy tax free.

Turkovich is a pediatrician at a local hospital, while Adamczyk recently left his career in information technology to stay at home and raise the couple’s two young children. It was a decision the couple weighed carefully.

“We had multiple conversations about what would be best for our kids,” Adamczyk says. “We didn’t want to adopt children just to put them in day care and have them raised by someone else. So we looked at our salaries to determine if either of us could step into the role of a stay-at-home dad. We decided we could. It came down to the fact that Steve spent a lot more time becoming a doctor than I did becoming an IT manager, but it was a very difficult decision to make.”

Their decision meant the whole family would go on Turkovich’s health insurance plan. And though their home state of New York recognizes them as a married couple, all is not equal when it comes to contributions. “The amount of money my employer contributes to the plan is deemed imputed income, and I’m taxed for it,” Turkovich says. “Those are taxes straight married couples simply aren’t paying.”

According to McDonald and other financial experts, the taxes gay and lesbian couples face represent just one reason why financial planning, both for single and coupled individuals, is critically important. “Gay-friendly is no longer sufficient,” he says. “You need someone who is an expert. This is such a tricky area right now. A financial planner and an attorney who are familiar with laws as they apply to same-sex couples is paramount.”

And this blossoming Buffalo family certainly agrees.

“We really had to jump through hoops to prove to New York State that we were married and domestic partners,” Adamczyk says. “There were a lot of things we were required to do that we wouldn’t have to if we were a heterosexual couple.”

Treading through government bureaucracy while navigating state and federal laws often left the couple with more questions than answers about their financial and legal future. “I think the biggest fear is that we may make an assumption that something is legal or recognized because we’re married in New York,” Turkovich says. “They say there are 1,300 rights or privileges afforded to married couples. I’ve never seen a list. Someday something could happen and we could think we’re protected and our kids are going to get what they deserve, but then realize because of some federal statute it’s going to be different. Maybe we didn’t prepare for that.”

Across the country, gay couples feel similar fears, irrespective of whether or not same-sex marriage is legal where they live. “One thing you have to be careful about is that regardless of differences state by state for same-sex couples, there are just plain differences in settling estates between states,” McDonald says. “An attorney in Texas is never going to write a will for a couple in California.”

So with all the differences in laws between states and the federal mandate that states same-sex marriages will not be recognized, what can people do to protect themselves, their partners and their families?

“Talk to an accredited domestic partnership adviser,” says McDonald. “It’s a designation that means a financial planner has taken courses and passed a series of exams to meet the minimum requirements of understanding issues facing domestic partners.” Just as important, he says, is that you do not look for quick fixes or easy answers to important questions about your finances and your future.

“Don’t go to the online, fill-in-the-blank legal or financial services,” he says. “You are not in a fill-in-the-blank situation.”

Even in New York, where same-sex marriage is legal, the proper planning can make all the difference. “I think it’s very important to meet with a financial planner to talk about all your finances and what you plan to do in the future,” Turkovich says. “For us, planning what our goals were with adopting children and figuring what we needed to do to protect our family’s finances were why we needed to talk to somebody who understood the nuances of same-sex couples.”

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