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Oct16

Same Sex Families Financial Affairs

Friday, October 16, 2015

Modern Families

 

Almost half a million Australians identify as gay or bisexual, many of whom are in long-term relationships.  Although same-sex marriage hasn't been legislated in Australia , changes to tax and and family laws in 2008 - such as the inclusion of same-sex partners in the definition of 'spouse' - means same-sex couples have almost all the same legal rights as heterosexual couples in a de facto relationships.

The United States might have legalised same-sex marriage, but when it comes to tax and estate planning there are different rules in every US state.  In Australia, these rules are more similar across the states.  So what do same-sex couples need to considering when it comes to tax and estate planning in Australia.

 

 

Putting saving strategies in place

The 2011 census found that people in same-sex relationships were generally better educated, had higher incomes, and were less likely to have children living with them than heterosexual couples.  Consequently, they tend to have stronger cash flow, fewer expenses and more savings - and just as much need for good advice when it comes to managing their money.

 

Making the most of tax and super benefits

Of course, not every same-sex couple will be so well off.  The 2008 laws make a number of benefits available to same-sexed couples, including:

  • the dependent spouse tax offset
  • family tax benefits
  • benefits of Medicare levy calculations if one partner is a low-income earner

If a relationship breaks down, the transfer of assets is also subject to the same tax rules as for de facto heterosexual couples.

Same-sex couples receive the same superannuation entitlements as married or de facto heterosexual couples. including super splitting, after-tax contributions, and tax-fee death benefits.  Whether you're in a same-sex or heterosexual relationship, it's essential to submit binding nomination forms, to guarantee your partner will receive your super when you die.

And be aware - although same-sex couples are entitled to all theses benefits, private and industry super funds are not obligated to offer them.  Check with your fund, and be open to switching to one that recognises your relationship.

 

Planning for parents

With legal issues around parenthood, estate planning might be the most complex part of financial planning for same-sex couples with children.  Children of same-sex parents can only be the biological child of one parent.  If that parent dies, custody of the child could be given to the deceased partner's family, so it is important that the other parent is legally named as the child's guardian.

Similarly, couples could designate new caretakers and draw up an estate plan for their child in the event that both were to die.  Its even more important to ensure guardianship, wills and powers of attorney are all up to date.

Every family is different, and each couple have their own needs and goals.  And it's just as important for same-sex couples to seek profession advice when you're planning ahead for your future.



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