Insurance

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on these requirements, see IRS Publication 501, Exemptions, Standard
Deductions and Filing Information. To get this publication, contact the
IRS at 800-829-1040 or visit its website at www.irs.gov.
The California Franchise Tax Board ruled recently that a lesbian
supporting her partner and their child can file her state income tax return
as a head of household. She had been denied head-of-household filing
status because she was not legally or biologically related to the child,
who was born to her partner through donor insemination during their
relationship. If you are the sole or primary support for your family, check
into whether head-of-household status is appropriate for you.
Resource
If you claim your lover as a dependent and the IRS objects, or you
have a problem with head-of-household status or any other dispute with the IRS,
see Stand Up to the IRS, by Frederick W. Daily (Nolo).
Special Issues
Pay attention to property tax issues. In addition to issues related to
income tax filing, marriage and marriage-like relationships can create confusion
about property and transfer taxes. Many rules are in flux as states try to decide
how to treat marital and marriage-like relationships between same-sex couples.
If you own property and are married, registered as domestic partners, or in a civil
union, you should talk to a lawyer or tax professional before transferring property
to or from your partner.
Insurance
Same-sex couples will have no problem getting many types of insurance
together. As with credit applications, make sure you don’t represent
yourselves as married, because fraudulent applications can lead to a loss of
coverage when you most need it.
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Health Insurance
As discussed in Chapter 1, many public and private employers now offer
health insurance coverage for employees’ domestic partners and children.
For a list of major companies that provide benefits to domestic partners,
visit the Alternatives to Marriage Project website at www.unmarried.com.
Also, you can find a “Corporate Equality Index” at www.hrc.org. Some
companies extend benefits to all cohabitants; others require marriage or
formal registration.
If you don’t have insurance benefits through your employer, you can
buy a private health insurance policy. In some areas, you may be able
to get a family rate for coverage that includes your domestic partner or
children.
Disability Insurance
Disability insurance is intended to provide income if you are unable to
work because of a disability. Some employers provide disability benefits
for their employees, but many people must make do with public benefits
or private plans that they pay for themselves. Where employers provide
disability insurance, coverage generally is offered only to employees, not
to spouses or domestic partners.
Life Insurance
Life insurance is another benefit that employers frequently offer. Even
when coverage is available through work, some couples also purchase
private life insurance policies. If you are in a couple, buying life insurance
makes sense if:
• you have minor children and there would be insufficient money for
them to live on if you die without insurance (remember any Social
Security they might receive)
• life insurance is part of your estate plan—an asset you plan to
leave to your partner that will not have to go through probate. This
especially makes sense if your lover is dependent on you or you
72  |  A Legal guide for Lesbian and Gay Couples
rely heavily on each other’s incomes—for example, you need both
paychecks to make your mortgage payments, or
• you are close to retirement, and insurance serves as a special kind of
savings to help out the partner who outlives the other.
If you have a life insurance policy, you can name your partner as the
beneficiary. When asked the nature of the relationship, you may have
to state “friend” or “business partner,” which is true if you own any
significant property together, or if you share some other financial interest
such as an actual business.
Generally speaking, you cannot buy a policy on your partner’s life and
name yourself as the beneficiary unless you own real estate or a business
together or are married or registered domestic partners. Insurance
companies don’t believe that nonmarried partners have an “insurable
interest” in each other, and limit buying insurance on another person to
spouses, business partners, and joint homeowners. But if you are able to
do so, owning a policy on your partner’s life can save on estate taxes for
higher-asset couples, so be sure to investigate this option.
Homeowner’s Insurance
If you and your partner buy a house together, you’ll have to get home­
owner’s insurance, which insures the house against fire and other acts
of destruction (for floods and earthquakes, you usually need additional
coverage). You shouldn’t have any trouble getting a joint policy. If
only one of you owns the house, you’ll need to get a rider covering the
nonowner or be sure the other partner has renter’s insurance. (Chapter 4
has more information about renter’s insurance.)
Automobile Insurance
In most states, car owners are legally required to carry a minimum
amount of auto insurance. If you and your lover each own a car
separately, you may have trouble getting a single insurance policy for both
cars. Some insurers won’t insure you and your cars as if you were married,
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but rather, will write you each a separate policy, and name the other as
secondary driver. Of course, this costs more.
If you really want one policy and you can’t find an insurer who will
write one, your only option is to change your title slips (you have to call
the motor vehicles department), putting both cars in one person’s name
or both in both partners’ names. Of course, you’ll need a separate written
agreement stating your actual ownership interests if you don’t both own
both cars in their entirety. And be careful not to do anything fraudulent
that the insurance company could use as a basis to deny benefits if you
make a claim.
Special Issues
In states where same-sex couples may marry or legally register, they
must be treated like spouses and insurance companies are no longer permitted to
discriminate against same-sex couples in providing insurance.
Some insurance companies refuse any secondary coverage to unrelated
people who co-own a car. This means that you and your lover would be
insured for accidents that occur when you’re driving or riding in the car
you own, but not while driving or riding in other cars, such as a rental
car, or while you are a pedestrian. And some companies require that
you designate just one person the “primary owner”—the company then
provides secondary insurance for that person only. You may have to talk
with a number of insurance agents before you find a policy that will
provide complete coverage for both you and your lover.
If you have significant assets, you should also buy an umbrella policy,
which provides additional coverage if you get into a major accident and
your policy limits are exhausted. An umbrella policy doesn’t kick in until
you have used up all your other insurance benefits. As an unmarried
couple, you may each have to purchase your own umbrella policy, but you
should push to try to get a joint policy whenever possible.