Marriage and Financial Inequality: Why Gay & Lesbian Couples Pay More

“While California may not have same-sex civil marriage, it is unique in that it is one of the few states that allow same-sex couples to adopt,” says Harley, a graphic artist.

The couple, who are currently fostering a baby they plan to adopt, work with a lawyer and financial planner to stay current on the different changes that are taking place in terms of how same sex couples are protected or not protected. The couple purchased their home together in September 2006.

“We are joint tenants in common. We did that to protect ourselves. If we were heterosexuals who married, we wouldn’t have to, because if one of us died the home would automatically go to the surviving spouse,” says Moore. “With same-sex couples, on the other hand, if one partner owns property and later adds his or her spouse to the deed, it creates a gift tax.”

Moore and Harley represent millions of gay and lesbian couples for whom being denied a civil marriage affects their families financially at every stage of life. The impact is often felt in five key areas: taxes, Social Security survivor benefits, medical benefits, pensions, and homeownership and estate planning. Says Crawford, “They are at a disadvantage legally and financially.”

The Battle for Benefits

“Straight married couples have the right to make medical and financial decisions on one another’s behalf, but for a gay or lesbian couple, if someone is hospitalized his or her partner is powerless. To be allowed to even visit that spouse would require a healthcare proxy,” says Taylor.

Getting health insurance is another obstacle. JaChel and Micaela Redmond of Dallas were married last year in the District of Columbia since Texas does not recognize same-sex marriage or domestic partnerships. The 32-year-old couple has one child, JaChel’s 11-year-old daughter, Micaela, who is self-employed, wants to give birth to a second child but her single policy wouldn’t cover maternal care costs, and JaChel’s company doesn’t offer domestic partner benefits. Since they don’t qualify for a family health insurance plan, starting a family is financially out the question.

There’s also the issue of laws that establish both spouses as a child’s parents if the child is born during the marriage; only in states that have marriage equality, civil unions, or domestic partnerships is the non-biological parent in same-sex couples put on the birth certificate, which affects that parent’s ability to put the child on his or her health insurance, enroll the child in school, travel with the child, or make medical decisions for the child. Even in instances where employers offer health insurance to domestic partners, those benefits are federally taxed as an additional income at the employee’s rate. Several firms, including TD Bank, Google, Barclays, Microsoft, and the Gates Foundation, have opted to absorb these extra costs to equalize benefits for their gay and lesbian employees.

Federal benefits present an even bigger challenge for Kaali and LaTasha Cohen. Together nine years, the couple obtained a civil union in New Jersey in 2008. Kaali, 41, was in a severe car accident and was deemed disabled.

“Because I am considered single, I receive less Social Security benefits than I would if I were in a straight marriage. I have a spouse and a daughter [Tasha’s biological child]. But to the government my daughter ceases to exist; my wife ceases to exist. So, where my daughter should be able to get benefits because I am her stepparent, she is not entitled. My wife would not qualify for Social Security survivor benefits,” says Kaali, who is the CEO and founder of REDZONE Solutions Inc., a consulting firm in Pennsauken.