For those who think civil unions are just like marriage...

[Lisbeth]

My 401k is the perfect example of how nothing takes the place of marriage.

It was a simple matter, once upon a time, to put my wife's name on the primary beneficiary line and my kids on the contingent beneficiary lines. Now I am forced to make some unsatisfactory choices. I can put my partner as my primary beneficiary or I can put my children. There is no choice for contengent beneficiaries. Or I could designate my estate as the beneficiary and my survivors can fight it out in court. Or I can designate the trustee of my will as beneficiary, in which case they may still end up fighting it out in court. There is no simple, reliable way to say I want my partner as primary and my children as contingent beneficiaries.

Just like marriage... mm hmm.

[lisagurl]

I could designate my estate as the beneficiary and my survivors can fight it out in court

A will can stop that problem.

[Shana A]

Just like marriage... mm hmm.

Yes, just like marriage, with the exception of 1000 + federal benefits, and the benefits that your state grants as well... Not to mention having to put a bunch of stuff in your will that would automatically be given to your spouse without being taxed, which isn't included in a civil union.

Z

[Lisbeth]

I could designate my estate as the beneficiary and my survivors can fight it out in court

A will can stop that problem.

A will can be contested.

[lisagurl]

A will can be contested.

And anyone can sue for any reason. Just because it can be contested there has to be evidence to declare it invalid. Which is very rare that they are changed.

[Lisbeth]

Just because it can be contested there has to be evidence to declare it invalid. Which is very rare that they are changed.

Evidence? Like claiming that the person living with the deceased, who wasn't really their spouse, had an undue influence thereby forcing them to leave their estate to the interloper?

http://wiki.answers.com/Q/How_can_a_last_will_and_testament_be_considered_null_and_void

[lisagurl]

forcing them

With out evidence of forcing them there is no case. Wills are private between the lawyer and client. If the spouse has never had their hands on the will there are no grounds.

[Lisbeth]

The operative words are "undue influence."

[glendagladwitch]

To me, the main problem with naming your estate as beneficiary is that any creditors you may have can go after it.  But if you name a person as beneficiary, it does not ever become property that your creditors can go after.

On my insurance, I just listed my live-in boyfriend of 8 years as primary beneficiary and my sister as contingent beneficiary.  What does being married have to do with it?

[lisagurl]

creditors

The executor is responsible to pay all creditors. Besides death is no excuse not to pay your bills.

[Lisbeth]

To me, the main problem with naming your estate as beneficiary is that any creditors you may have can go after it.  But if you name a person as beneficiary, it does not ever become property that your creditors can go after.

On my insurance, I just listed my live-in boyfriend of 8 years as primary beneficiary and my sister as contingent beneficiary.  What does being married have to do with it?

Oh, I'm doing that for my insurance. But a 401k has different rules. I would kind of like my partner to get my life savings in the 401k when I die, but the federal government seems to have other ideas of how that money should be disposed.

The executor is responsible to pay all creditors. Besides death is no excuse not to pay your bills.

Speaking of bills... If she were my legally married spouse, she could get my property tax-free. As my partner, she has to pay the inheritance tax.

[glendagladwitch]

Good points.

[lisagurl]

As my partner, she has to pay the inheritance tax.

After the first million then there are other options such as trusts and limited partnerships.

[Lisbeth]

I'll let you know if I ever get past the first million... or even close to it. For the rest of us, the reality is the surviving partner often has to sell their home to pay the inheritance tax on it.

[lisagurl]

The first million of inheritance is tax free. After that you need a lawyer to protect from estate taxes. Do you not understand the inheritance tax code? That must be too much McCain and Joe the plumber fantasy.

[DarphBobo]

For the rest of us, the reality is the surviving partner often has to sell their home to pay the inheritance tax on it.

That was the case for a couple in my town.  They owned a home valued under $100 (the rest of the estate was under that amount) but the state inheritance taxes forced the surviving partner to sell the house.  Had they been legally married there'd have been no taxes in that case.

[lisagurl]

Inheritance taxes are separate from estate taxes imposed by the federal government and many states.

The Internal Revenue Service collects the estate tax on all U.S. citizens and residents. The tax is levied on the deceased's estate as a whole, filed on a single estate tax return and paid out of the estate's funds. The U.S. government imposes no inheritance tax.


States, however, may impose an inheritance tax on beneficiaries who receive property from the deceased. These taxes are assessed by states in place of or in addition to state and federal estate taxes. The tax is calculated separately for each beneficiary, and each beneficiary is responsible for paying his or her own inheritance taxes.

Inheritance tax is a state issue not connected to the federal estate tax. Many states have no Inheritance tax. Yes some states have reduced rates for children and spouse. These also can be over come with trusts but it takes years of slow transfer.

[Lisbeth]

You talk like we're all made of the kind of money that can afford to take advantage of tax shelters.

[lisagurl]

You talk like we're all made of the kind of money that can afford to take advantage of tax shelters.

You talk like being aware of simple finance rules are beyond your abilities. Read a $7 book and then go to a bank. Life in the 21 century requires use of knowledge. 30 second sound bites only distract your focus, it takes a focused attention to understand life  and apply knowledge to your advantage. Considering most are not focused it will give your a huge advantage.

[Lisbeth]

Oh, you have so convinced me that not having a legally recognized relationship is to my financial advantage.