This morning on TODAY, relationship therapist Argie Allen and I spoke with Willie Geist and Natalie Morales on what financial bullying is, and how to stop it in your relationships. For more information, check out the clip below:
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It is widely expected that this month, the Supreme Court will release a decision regarding the constitutionality of the Defense of Marriage Act (DOMA). It is a decision highly anticipated not just among constitutional scholars, but among the entire LGBT community and supporters of same-sex marriage across the country.
DOMA defines marriage (at the federal level) as a union between a man and a woman; as such, it excludes same-sex spouses from tax, healthcare and estate planning benefits that are given to heterosexual spouses.
“Every aspect of a person’s financial life, legal life, and their rights their benefits — DOMA pervades all of that. It’s everything that’s recognized and not recognized at the federal level,” explained Lisa Siegel, a senior wealth planner for Wells Fargo’s Private Bank. Siegel is also an attorney and has helped many LGBT clients navigate this tricky legal and financial terrain.
Siegel says there is not much a same-sex couple can do in advance of the Supreme Court ruling, but there are many things to start considering and documents to start gathering in case DOMA is repealed. Here are some of the areas that require particular attention:
Tax planning. Siegel had advised her own clients to file an extension for their 2012 taxes, in the event DOMA is upended and a same-sex couple can select “married filing jointly” on their federal tax return. For same-sex spouses who didn’t file an extension, she says it’s easy to go back and file an amendment (the IRS has an FAQ and the amendment form here), and the IRS accepts amendments for the past three years. However, depending on the salaries of the spouses in question, Siegel says that filing jointly might not mean owing less money to the government. “You might owe more because of how much money you earn. You have to then have an accountant run a projection to see,” she said.
Estate planning. Heterosexual spouses have access to the unlimited marital deduction, which means that husbands and wives can transfer assets to and from each other (during life and after death) with little or no tax. Under DOMA, same-sex spouses cannot do this. “If this section of DOMA were to be repealed, this would entirely change their estate planning,” Siegel said. “In many cases, [a repeal] would require them to revise their estate plan.” Siegel recommends consulting an attorney with specific experience in LGBT estate planning, or a financial planner with an Accredited Domestic Partnership Advisor (ADPA) designation.
Beneficiary designations. Siegel noted that the estate plan isn’t the only document that would need to be revised: living wills, healthcare proxies, life insurance policies and retirement plans are among the documents that would need to be updated so that same-sex spouses can list each other as their primary benefactor. “[DOMA] affects spousal rollovers — think about IRAs and 401(k)s,” she said. “On qualified plans, there’s no automatic right for [a same-sex] spouse to receive access.”
Wedding planning. Many of the financial and legal ramifications of a DOMA repeal would primarily affect couples who are already married (in states allowing same-sex marriage), but Siegel noted that couples for whom a favorable DOMA ruling might inspire a wedding have their own set of considerations. Primarily: the assets they’d bring to a marriage. “Because marriage has not been an option and many couples have been together for many, many years, as have been some of my couples, we’re finding that these couples are getting married and have pretty much had a lifetime together. They’re coming into the marriage with significant assets,” she said. For these couples, Siegel recommends a prenuptial agreement. “It could be a potentially unpleasant exercise. But important!”
Finally, if the court rules to uphold DOMA, Siegel emphasized that it is still worth it for same-sex couples to meet with their attorneys and financial advisers to make sure their financial plans — and especially, estate plans — are up to date.
“In general, estate plans should be looked at every few years anyway,” Siegel said. “It’s not a bad idea to go back to advisers and say, now what?”
Is the key to a better economy dads who do more diapers? According to a fascinating new piece by Catherine Rampell in the New York Times Magazine, the answer to that question might be yes. This morning, I went on Morning Joe to talk a little more about this issue. Check out our discussion in the video clip below.
While talking about relationships and money this morning on TODAY, I heard the best soundbite of the day: “The zipper trumps the wallet.” This may be true, but money problems (and worse, money secrets) can still be cause for strife amongst couples. For tips on how to avoid financial disagreements with your partner, check out the video clip below.
I’m sure you’ve heard that the cost of getting married is higher than ever these days. Brides and grooms are spending an average of $27,000 on their weddings. Yikes! The good news is that there are ways to save. I went on the TODAY show to provide our viewers with some tips on how to have a frugal wedding. Hint: get a preowned wedding dress and consider getting your cake from the grocery store. Catch all my tips in the video clip below:
Navigating finances in a second marriage can be tricky, but with a prenup and a solid plan to manage money (a yours, mine and ours system, for example), it can be done — or at least, that’s what I told a viewer who called into Money 911! To hear our discussion, plus tips on annuities and finding affordable health insurance, check out the video clip below.
Did you know? Couples that can accumulate $10,000 in assets are 70 percent less likely to get divorced than couples who can’t do this. This morning on Today, I shared some money rules from my new book that can help save your marriage and relationships. To see why it’s good to declare some financial independence and bad to lend money to relatives, check out the video clip below.
Many of you have been asking me where you can find full episodes of my new show, Cash Call. I’m happy to tell you that you can view a full episode of the show using this link right here. The episode you are about to watch is all about love, marriage and money. Do you tell the truth, the whole truth and nothing but the truth when it comes to money? This episode addresses all the complexities of managing money with a spouse, with help from a very special guest: psychologist and author Gail Saltz. I hope you enjoy it!
This morning on Today‘s Money 911, we heard from a woman whose fiancé has child support obligations, and she wanted to know how this would affect her own assets. To see what we told her — plus for information on auto insurance and rollover IRAs — check out the video clip below.
This morning on Today‘s Money 911, we heard from a woman who wanted to know how to use her $10,000 tax return. Should she: pay off student loans, pay off her credit cards, or boost her emergency savings? To see what we told her, plus tips on taking Social Security, check out the video clip below.