Passing on Retirement Benefits
The subject of passing on retirement benefits is extremely difficult for gay men and lesbians. Many company plans expressly provide that the benefits can only be passed to a surviving spouse or natural or legally adopted children. This may, however, vary with the types of benefits. Such self-funded programs as IRAs, 401(k)s, other employer sponsored pre-tax savings plans or Keogh plans allow you to choose any beneficiary you want. For more information, see the article on discrimination in retirement plans.
All gay, lesbian, bisexual and transgender people should also take two crucial steps.
- Make sure your estate planner reviews your company plan, if you have one, to see whether there are any restrictions on who may receive your benefits.
- If your company retirement plan is restricted and you are in a tax and employment situation where you can take advantage of IRAs, or Keogh plans for self-employed people, you may want to set up plans to benefit your life partner or other beneficiaries of your choice.
Retirement plan accounts also can be excellent sources for charitable bequests. Naming charitable beneficiaries in these accounts results not only in no estate taxes, but no income tax, as well..