The High Cost of Being Gay
The authors of a widely discussed article published in The New York Times, "The High Price of Being a Gay Couple were the main attraction at a panel discussion at New York's Gay Center on Thursday, Dec. 3, 2009.
Finance reporter Tara Siegel Bernard and colleague Ron Lieber estimated the additional expenses incurred by a hypothetical gay couple with two children over a fifty-year period. A gay couple jointly earning $140,000 annually would pay about nearly half a million dollars over the course of their adult lives as a "penalty." That figure, however, could be as low (relatively) as $41,196 through domestic partner health benefits and other factors.
The article, which was highly praised by mainstream and gay readers, examined every detail of how the lack of legal union and other legal restrictions wreaks secret havoc on our financial well being.
Two months and 900 fictional tax returns later, Siegel Bernard and Lieber emerged with a wide-ranging profile which shattered the myth that gays are more financially robust and advantaged than their heterosexual peers. The two reporters (who are heterosexual), detailed the metholodology of how they crunched the numbers.
Out Professionals, a major organization in the city, sponsored the meeting. Moderating the discussion was Williams Institute senior research fellow Gary Gates, a much-consulted and cited demographer who provided valuable background and advice during the course of Siegel Bernard's research.
The event, attended by approximately 50 LGBTs (most in their 50s or beyond) was an hour-long discussion on everything from estate taxes to health insurance to social security and spousal I.R.A.s to less tangible concerns such as the cost of stress associated with how one's LGBT status impacts the navigation of all aforementioned issues.
Gates began the event by posing a number of questions and concerns to Siegel Bernard. She admitted that conclusions reached in the October 2 Times piece came from a variety of necessary speculations regarding life expectancy, level of education, state of residence, gender, the presence or absence of children and adjustments made for inflation.
That said, Siegel Bernard spoke about a number of less obvious disadvantages to LGBT couples. Besides the often-cited 1,600-1,700 federal benefits associated with marriage, there were other, less well-known, costs.
For example, "Car rental companies don't charge for a second driver if you are married or in a domestic partnership," she noted. While such a savings or expense might seem insignificant during the course of one year, it becomes significant over the 50-year span of her fictitious couples' expenditures. This proved to be the case with so many financial costs.
Other hidden factors were subtle. For example, many couples are forced to move to another state that would allow for adoption.
Of great concern, especially to older audience members, were financial issues arising when one partner passes away and the other survives. At that point, unexpected issues often emerge in areas such as the surviving partner's work benefits and living wills vs. trusts.
Siegel Bernard recommended buying insurance to make up for a lack of spousal benefits. She also strongly suggested that division of wealth and spousal survival matters be discussed with a qualified attorney. She also recommended that LGBTs know the difference between hiring a "gay friendly" and a "gay knowledgeable" consultant.
Debunking the DINK Myth
Gates handily debunked the DINK (Dual Income No Kids) myth of gay wealth. A persistent finding within the course of his own work was that, in fact, gay men earn less than other men.
The myth persists, Gates asserted, "because when two men couple, they still get two male incomes" as opposed to women, who earn less than their male counterparts, gay or straight.
Gates further observed that "Twenty percent of kids raised by same sex couples live in poverty."
One audience member asked both panelists about the presence of gays and lesbians in certain occupations.
Both panelists admitted--to their bemusement--that it seems a disproportionate amount of gay men are, indeed, hairdressers; and a disproportionate amount of lesbians work in construction. But that's only in comparison to their heterosexual peers.
The percentage of gay male hairdressers may dwarf the percentage of heterosexual male hairdressers. But it does not necessarily follow that hairdressing is an overwhelmingly common gay occupation.
Gates did note, however, that even in the most stereotypical occupations, gays and lesbians still earn less than heterosexuals working the same job.
The Right Financial Advisor Is Key
As for how to find those coveted "gay knowledgeable" tax specialists and estate attorneys, Siegel Bernard recommended a Google search for Pride Planners. A member of the audience pointed out that groups like Out Professionals has access to such resources.
One woman in the audience noted she could get her partner of 42 years Social Security Survivor or Spousal Benefits. But she added, discrepancy in such benefits is a crucial civil rights issue.
She wondered why nobody has used the financial statistics gleaned by Gates and Bernard Siegel for courtroom-based constitutional challenges.
Gates speculated that although it "seems to be a classic prima faci case of people being treated differently"; that is, it seems obvious on its face. Unfortunately, those capable of mounting such a challenge "don't believe we can win with this current Supreme Court."
Gates provided the evening with a rare nugget of advice which applied equally to straights and gays: If you want to avoid estate tax altogether, die in 2010. For that year only, there will be no estate tax.
Afterward, the threshold increases from its present amount. That means that, depending upon the total worth of your estate, the federal tax bite could be as high as 55 percent.
The event concluded with the an Out Professionals representative noting that the New York Times first covered the issue of LGBTs being aware of their financial uniqueness over 15 years ago. While the culture and economy have changed greatly since then, many remain unaware of how their sexuality impacts their financial security.
Gates added a final piece of advice for same-sex couples planning for a possible scenario in which one partner survives the other: "Don't assume the process that occurred after your own parents died will happen the same way for you."