7. Pension Protection
In the summer of 2006, Congress passed the Pension Protection Act,
which contains provisions that are of special interest to same-sex
couples and their families. The Act addresses a number of issues, and
the Human Rights Campaign (HRC) was instrumental in assuring that among
those issues were the following:
The Pension Protection Act now allows holders of 401(k) and similar
accounts upon their death to bequeath their contents to individuals
other than legally-married spouses without tax penalty to those
beneficiaries. In the past, non-spousal beneficiaries, including
domestic partners, were forced to take the contents in a lump-sum
payment that was immediately subject to taxes.
The Act, in addition to allowing individuals to name beneficiaries
other than spouses who may inherit these funds without tax penalty, also
allows the holders of these accounts to tap into them in order to
address certain emergency needs of the beneficiaries themselves. In the
past, account holders could only tap into their accounts for the
emergency needs of their legally-married spouses or dependents, and
domestic partners were not considered either.
People in same-sex relationships should consider examining their
retirement account paperwork to determine whether
beneficiary-designations and other information are current or in need of
updating in light of these changes or
other developments. Individuals should consult with their accountants,
attorneys, or plan administrators before making changes. For more
information, provided by HRC,
click here.
This information is not intended to constitute or replace legal
advice: always consult your attorney before drafting or signing
documents which affect your legal rights. If you need a referral to a
GLBT-friendly attorney in your area, please contact the OutFront
Minnesota Legal Program at 612-822-0127 ext. 230 or .
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