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4 Steps to Financial Security for Lesbian and Gay Couples by Harold L. Lustig

1999; 296 pp. $14, Fawcett Books.

I recommend this book highly. As a financial consultant, I'm adding it to my library, where it will be an excellent resource for my gay and lesbian clients. Chapter 1 ("Twenty-one Myths That Can Make You Poor"), for instance, is right on target, and is followed by excellent chapters on estate, insurance, investment, and retirement problems with which a gay or lesbian couple must contend. The book's sections on use of insurance and planning for death, and its step-by-step instructions for each planning phase, are exceedingly useful. Its overall advice would be beneficial for anyone.

"Myth #9: My partner has domestic partner benefits at work. I will be protected by COBRA if his employment is terminated.

This is incorrect. Spouses in legally recognized marriages are protected, but since federal law does not recognize your relationship, you are not protected in the same way. Should your partner's employment be terminated, you will have no coverage unless the insurance carrier has special provisions.

"Myth #21: There is little or no financial difference when a partner, rather than a married spouse, dies.

Actually, there is a very big difference. This is where the pedal hits the metal, where political disenfranchisement hits the pocketbook. Retirement plan payments may continue if your partner has already retired, but everything can be lost if death occurs before retirement. (For married couples, payments continue.) Social Security doesn't protect the surviving partner. Joint property can be taxed differently for you than for married couples. You need to have documents proving how much each partner actually contributed.

On the other hand, you have a major advantage over straight couples who wrongly assume there is no urgency about doing financial and estate planning: Because you don't have the luxury of making false estate assumptions, you have an opportunity to be better prepared for the future.

"When Ruthie passed away in 1992, she left Louise $80,000 in her 401(k). Louise thought she could transfer the proceeds from the account into an IRA in her own name, let the money grow, and start taking out an income when she retired. No big deal. Certainly made sense to her and her friends. Was she ever wrong!

To say that Louise was surprised when she had to fork over $24,800 out of her own pocket to the IRS for taxes on Ruthie's 401(k) would be an understatement. When she learned later that her sister did not have to pay any extra taxes on her husband's retirement plan when he died, she was outraged.


ISBN: 0449002497

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