When the U.S. Supreme Court overturned the Defense of Marriage Act (DOMA) on June 26, that was just the beginning of the story for many wealth managers who serve same-sex couples.
San Francisco-based wealth management firm Aspiriant LLC, for example, has provided a checklist to help its more than 40 financial advisors in seven cities nationwide re-set the clock with clients whose lives will change as a result of DOMA’s repeal.
Reviewing a same-sex couple’s financial plan can reap tremendous benefits for the client, Bragar said.
“In terms of tax benefits, we always found that same-sex couples didn’t get the same tax rights that other married couples get,” she noted. “If your marriage is recognized by the federal government, there is no estate tax. But if somebody in a same-sex partnership died and had an estate of more than $5.25 million, the surviving partner would have to pay tax above that $5.25 million. So for an estate of $10 million, you subtract $5.25 million, and that leaves $4.75 million that’s taxed at 40%, almost $2 million in tax, which is a huge penalty.”
Bragar, a CFP who serves 40 to 45 families, including a few same-sex couples, said Aspiriant has dealt for years with tricky wealth management issues involving same-sex couples, including estate planning, taxes and insurance. Aspiriant, with approximately $7 billion in assets under management, in 2013 was named No. 11 on Forbes’ list of Top 50 wealth managers.
Read Bragar’s 10 wealth planning tips for same-sex couples in a post-DOMA world on the following pages.
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“The implications of the overturn of DOMA on same-sex clients living in states where marriage is legal is HUGE,” writes Bragar, who joined Aspiriant in 1999 and became a firm principal in 2002. She now chairs Aspiriant’s wealth planning committee, and serves on the client service committee.
Bragar counsels advisors and their clients to revisit financial plans to determine the big picture implications on their ability to financially achieve what’s most important.
“For wealthy couples, the estate tax savings alone will be a game changer,” Bragar says. “As part of this exercise, revisit your survivor needs. Maybe you can now self-insure, and don’t need as much life insurance.”
2. Update your estate plan
Trusts, wills, general powers of attorney and healthcare powers likely all need to be re-worked to more efficiently achieve estate transfer objectives, “and to ensure that your spouse can make important financial and healthcare decisions for you if you lose the ability to make them yourself,” Bragar writes.
Married same-sex couples can now execute joint trusts, when appropriate, she adds.
3. Revisit the beneficiary designations for your retirement accounts
“Until DOMA was knocked down, same-sex couples missed out on the ability to enjoy the survivorship rules for IRAs and other qualified retirement plans,” Bragar says.
These rules allow the surviving spouse to roll over the deceased spouse’s retirement account balance to the survivor’s IRA at the deceased spouse’s death without triggering taxes, she writes. “Since this opportunity wasn’t available to same-sex couples, some couples decided to name other beneficiaries (like their trust). Revisit your beneficiary designations to make sure they still make sense.”
4. Take a fresh look at your investment portfolio
Consider these questions: Is the portfolio organized in the manner that you’d like or should you be commingling investment accounts? Do account titles need to be updated? Should you be taking a different overall investment approach now that you can truly invest together without hurdles?
5. Revisit tax planning
“The ability to file joint federal and state income tax returns is a big logistical win,” Bragar reminds advisors to same-sex couples. “All income and expenses can now be captured on one tax return without figuring out how the expenses will be divided between partners’ returns. That said, the marriage tax penalty (i.e., where married couples end up paying more tax than they would if they were two single taxpayers) will now hit high-earning couples in the same-sex community. Make sure you know where you stand, and plan accordingly so you don’t get caught with a big, unexpected tax bill at the end of the year.”
Bragar recommends taking a look at whether amending the 2010-2012 tax returns as a married couple would generate tax savings. Tax returns can be amended up to three years from the tax filing date. “If you filed a gift tax return in the last three years to cover a gift made to your spouse, amend the return(s) to reverse the gift because spouses may make unlimited gifts to each other,” she writes.
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“If you/your spouse’s employer doesn’t already provide you with spousal health insurance benefits, and enrolling for those benefits would improve your family’s overall health insurance program, make the change,” Bragar says.
7. Did your spouse die in the last three years, leaving you the net taxable estate?
Amend the estate tax return and have the taxes refunded. A person has three years from the tax filing date to amend the estate tax return. Also, Bragar recommends investigating Social Security survivor benefits.
8. Social Security
Married couples are eligible for spousal Social Security benefits equal to 50% of the spouse’s full retirement age benefit. “If this benefit is bigger than the benefit you earned (or if you didn’t earn a benefit), switch to the spousal benefit,” Bragar says.
9. Consider the whole family
Estate planning for a mixed-gender married couple also extends to parents who have drawn up estate plans that benefit both their child and the child’s same-sex spouse. “People might want to go back to their estate plan and define the word ‘spouse’ in the plan, to make sure that it includes the same-sex spouse,” she advises.
10. Consider a pre-nup if marriage is in the cards
“Marriage equality isn’t all a bowl of cherries,” Bragar writes. “Asset protection pits are involved, so carefully consider entering into a pre-nuptial agreement.”
Read High Court Bolsters Gay Marriage, but Financial Planning Hurdles Remain at ThinkAdvisor.
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Alamy My birth was meticulously planned. My mother, a teacher, and my father, a businessman, strategized their baby-making agenda around my mother's schedule. I would be born at the end of May, giving her the summer for her maternity leave, during which she wouldn't lose any wages or use any of her sick or personal days, before returning to work. I arrived promptly in the latter part of May and then screwed everything else up. My mother, a fiercely strong and independent woman, made what was, for her, a surprising choice to become a stay-at-home mom to raise me (and the younger sister who showed up later). In another previously unpredicted turn, our family moved overseas, making it even harder for my mother to return to the workforce later. For nearly 21 years, my mother sacrificed her career and her earning potential to raise two daughters. Now, in my mid-20s, I've watched my peers struggle with the question of whether or not to have children. Those who decide to pursue the path to dirty diapers, sleepless nights and unconditional love seem to fall into two groups: those who blindly hope they'll be able to make ends meet; and those who begin crafting idyllic budgets around their fictional child. What Price Motherhood? The decision to have children or not is incredibly personal. While one choice provides a host of obvious emotional and intangible rewards (and the possibility of having someone other than paid staff to care for you in your twilight years), the other has distinct financial advantages. Those financial disadvantages for mothers involve more than just the costs of raising a child -- both parents take those on. But women in particular need to consider the income, retirement savings and Social Security benefits they sacrifice by electing to walk away from the workforce. Even mothers who return to work relatively rapidly tend to suffer financial setbacks often referred to as the "motherhood penalty*." Maternity Leave The monetary losses start from the moment the labor contractions set in. Bringing new life into the world warrants legally mandated paid leave in most developed nations -- except the United States, where employers aren't required to provide it. How much compensation women are entitled to while out on maternity leave varies by country: It could be as little as 50 percent of their normal wages. But that's far more than the disturbing zero required of American companies. "Only about half of all first-time moms in the United States are able to take any paid leave after childbirth; and just a fifth of working women with young children receive leave with full pay," according to WorkingMother.com's evaluation of National Partnership for Women & Families' Census data. Salary Over the years, studies have shown mothers earning less, facing more workplace discrimination and receiving fewer opportunities than women without children. In fact, this issue may be more pressing than that of the general pay gap between men and women. Women who leave the workforce entirely sacrifice their salaries for a job that pays in cuddles, kisses, temper tantrums and heart-melting moments. But you can't pay the bills in a child's laughter, your daughter's first steps or when your teenage son says, "I love you" for no reason. Even though motherly tasks require dedication, multitasking, high-level communication skills, the ability to prioritize and handle expenses, employers still don't see the work as proof of ability. The role of a mother (working or stay-at-home) demands an incredible amount of effort; it's every bit as much of a job as any 9-to-5 occupation, but employers still discriminate against mothers. "Employed mothers are hit with a 5 percent wage penalty per child, on average," according to a study conducted by Cornell University sociologists and published in the American Journal of Sociology. Social Security Benefits It isn't just salary that women walk away from when they leave the workforce to raise children. Their eligibility to earn Social Security benefits suddenly comes to a screeching halt. Women who fail to put in a total of 10 years of work will not be able to collect Social Security retirement benefits, according to the Social Security Administration's 2014 pamphlet on earning credits (though there are some exceptions). But more important than just qualifying for Social Security is how your benefit is calculated. To quote the SSA: 
) was upgraded to “Buy” from “Hold” at Keybanc due to accelerated growth in the commercial aerospace aftermarket. Keybanc has a price target of $68 on Heico, suggesting the HEI’s stock will rise by 24%. HEI has a dividend yield of 0.22%.
In the prosperous years after World War II, governments in rich countries expanded their pension systems. In addition, companies began to offer pensions that paid employees a guaranteed amount each month in retirement -- so-called defined-benefit pensions. It got even better in the 1980s. Many countries began to coax older employees out of the workforce to make way for the young. They did so by reducing the age employees became eligible for full government pension benefits. The age fell from 64.3 years in 1949 to 62.4 years in 1999 in the relatively wealthy countries that belong to the Organization for Economic Cooperation and Development. That created a new, and perhaps unrealistic, "concept of retirement as an extended period of leisure, " Mercer consultant Dreger says. "You'd take long vacations. That was the Golden Age." Then came the 21st century. A System Under Siege As the 2000s dawned, governments -- and companies -- looked at actuarial tables and birth rates and decided they couldn't afford the pensions they'd promised. People were living longer: The average man in 30 countries the OECD surveyed will live 19 years after retirement. That's up from 13 years in 1958, when many countries were devising their generous pension plans. The OECD says the average retirement age would have to reach 66 or 67, from 63 now, to "maintain control of the cost of pensions" from longer lifespans. Compounding the problem is that birth rates are falling just as the bulge of people born in developed countries after World War II retires. Populations are aging rapidly as a result. The higher the percentage of older people, the harder it is for a country to finance its pension system because relatively fewer younger workers are paying taxes. In China, the 65-and-older population will rise from 11 percent of the working-age population in 2010 to 42 percent in 2050. In the United States, this old-age dependency ratio will rise from 20 percent to 35 percent. In response, governments are raising retirement ages and slashing benefits. In 30 OECD countries, the average age at which men can collect full retirement benefits will rise to 64.6 in 2050, from 62.9 in 2010; for women, it will rise from 61.8 to 64.4. Italy is raising the age from 59 to 65. In the wealthy countries it studied, the OECD found that the pension reforms of the 2000s will cut retirement benefits by an average 20 percent. Even France, where government pensions have long been generous, has begun modest reforms to reduce costs. France has raised the number of years people must work before they can receive a full pension from 41.5 to 43. More changes are likely coming. "France is a retirees' paradise now," says Richard Jackson, senior fellow at the Center for Strategic and International Studies. "You're not going to want to retire there in 20 to 25 years." The fate of government pensions is important because they are the cornerstone of retirement income. Across the 34-country OECD, governments provide 59 percent of retiree income, on average. The government's share ranges as high as 86 percent in Hungary. In the United States, the world's largest economy, it's about 38 percent. If rich countries don't cut pension costs even more, says Standard & Poor's, a credit-rating agency, their government debt will more than triple as a percentage of annual economic output by 2050. The debt of most countries would drop to what is commonly called junk status. Many of those facing a financial squeeze in retirement can look to themselves for part of the blame. They spent many years before the Great Recession borrowing and spending instead of setting money aside for old age. In the U.S., households took on an additional $5.4 trillion in debt -- an increase of 75 percent -- from the start of 2003 until mid-2008, according to the Federal Reserve Bank of New York. The savings rate fell from nearly 13 percent of after-tax income in the early 1980s to 2 percent in 2005. The National Institute on Retirement Security estimates that Americans are at least $6.8 trillion short of what they need to have saved for a comfortable retirement. For those 55 to 64, the shortfall comes to $113,000 per household. "People are going to be shocked at how little they have," says Alicia Munnell, director of Boston College's Center for Retirement Research. "For some middle-income people, it will mean canceling the RV" -- the recreational vehicle that has become a symbol of retiree life in America. For those worse off, she says, it could mean an old age in poverty. After the Financial Crisis, a Long-Term Problem As if demographics weren't burden enough, the outlook became worse when the global banking system went into a panic in 2008 and tipped the world into the worst recession since the 1930s. Government budget deficits -- the gap between what governments spend each year and what they collect in taxes -- swelled in Europe and the United States. Tax revenue shrank, and governments pumped money into rescuing their banks and financing unemployment benefits and other welfare programs. That escalated pressure on governments to reduce spending on pensions or raise revenue. Hungary took one of the most draconian steps: It demanded that its citizens surrender their private retirement accounts to the government or give up their government pensions. Poland seized a portion of private retirement accounts. Ireland imposed an annual tax on retirement accounts. The Great Recession threw tens of millions of people out of work worldwide. For many who kept their jobs, pay has stagnated the past five years, even as living costs have risen, making it tougher to save for retirement. In addition, government retirement benefits are based on lifetime earnings, and they'll now be lower. The Urban Institute, a think tank in Washington, estimates that lost wages and pay raises will shrink the typical American worker's income at age 70 by 4 percent -- an average of $2,300 a year. Leslie Lynch, 52, of Glastonbury, Conn., had $30,000 in her 401(k) retirement account when she lost her $65,000-a-year job last year at an insurance company. She'd worked there 28 years. She has depleted her retirement savings trying to stay afloat. "I don't believe that I will ever retire now," she says. She also worries about her children, all in their 20s: "I don't think my three sons will ever retire" because pay raises have been so weak for so long. Less money from a government pension isn't the only factor weighing on future retirees. When the financial crisis struck five years ago, the world's central banks cut interest rates to record lows to stop the economic free-fall. That also punished people with much of their money in investments that pay interest. "The low-interest rate environment has been brutal," says Catherine Collinson, president of the Transamerica Center for Retirement Studies. She points out that $500,000 in savings would yield $25,000 a year at an interest rate of 5 percent, just $2,500 at 0.5 percent. The crisis also frightened many away from the stock market. Stocks can be riskier than other investments, but they yield more long term. Many investors have shunned stocks while the world's stock markets have soared. In the United States, the Dow Jones industrial average has risen nearly 150 percent since March 2009. Japan's Nikkei index is up 56 percent just this year. The past five years have been so tumultuous that some people have been reluctant to invest at all. Olivia Mitchell, who studies retirement at the University of Pennsylvania's Wharton School, says her grown daughters rebuffed her when she urged them to save more for retirement. Stocks, they said, are too risky. And bonds don't yield enough interest to be worth the bother. The Asia Challenge In Asia, workers are facing a different retirement worry, a byproduct of their astonishing economic growth. Traditionally, Chinese and Koreans could expect their grown children to care for them as they aged. But newly prosperous young people increasingly want to live on their own. They also are more likely to move to distant cities to take jobs, leaving parents behind. Countries like China and South Korea are at an "awkward" stage, says Jackson at the Center for Strategic and International Studies: The old ways are vanishing, but new systems of caring for the aged aren't yet in place. Yoo Tae-we, 47, a South Korean manager at a trading company that imports semiconductor components, doesn't expect his son to support him as he and his siblings did their parents. "We have to prepare for our own futures rather than depending on our children," he says. South Korean public pensions pay an average of just $744 a month. South Korea has the rich world's highest poverty rate for the elderly. It has one of the world's highest suicide rates for the aged, too. China, too, will struggle to finance retirement. China pays generous pensions to civil servants and to urban workers who toiled in inefficient state-owned factories. These workers can retire early with full benefits -- at 60 for men and 50 or 55 for women, depending on their job. Their pensions will prove to be a burden as China ages and each retiree is supported by contributions from fewer workers. The elderly are rapidly becoming a bigger share of China's population because of a policy begun in 1979 and only recently relaxed that limited couples to one child. The World Bank says the cost of those pensions could eventually reach twice the size of China's annual gross domestic product. That would put the bill at more than $16 trillion. China is considering raising its retirement ages. But the government would likely meet resistance. "I heard that the authorities might postpone the age of the retirement, but I sure hope not, since I've already worked for almost 42 years," says Dong Linhua, 59, a former Shanghai factory worker and now a real estate investor, who owns three apartments and two small shop spaces. China also tightly regulates investing, limiting access to assets that are more likely to generate the returns workers need to build a healthy retirement account. "Things that you and I take for granted, like being able to invest in mutual funds or being able to buy stocks and bonds, are in their infancy in China," says Josef Pilger, leader of Ernst & Young's Asia-Pacific pension practice in Sydney, Australia. "The biggest fear the Chinese regulators have is: What if we relax investment restrictions and we have a financial crisis? People will be on the street, saying: 'You let me play with fire, and I burned my fingers.' " The End of Traditional Pensions Governments aren't alone in cutting pensions. Corporations are, too. The traditional defined-benefit pensions they long had provided are vanishing. Companies don't want to bear the risks and costs of guaranteeing employees' pensions. They've moved instead to so-called defined-contribution plans, such as 401(k)s in the U.S., which shift responsibility for retirement savings to employees. The problem with these plans is that people have proved terrible at taking advantage of and managing them. They don't always enroll. They don't contribute enough. They dip into the accounts when they need money. They also make bad investment choices; often buying stocks when times are good and share prices are high and bailing when prices are low. Investment returns from defined-contribution plans are typically 0.76 percentage points lower than returns on defined-benefit plans, according to the consulting firm Towers Watson. That difference adds up: At a 5 percent annual return, $100,000 becomes $432,000 after 30 years. At 5.76 percent, it's 24 percent higher -- $537,000. Many have raided their retirement accounts to pay bills. In the United States, 26 percent of workers with 401(k) and other defined-contribution plans take loans or make hardship withdrawals before they reach retirement, according to a study by HelloWallet, which offers online services that help people with their finances. Working Americans withdraw $70 billion annually from retirement accounts -- an amount that's 40 percent of the $175 billion put in. Employers add an additional $118 billion. Retirement specialist Teresa Ghilarducci of the New School for Social Research in New York says the voluntary plans "work for a robot with an Excel spreadsheet," not for people trying to pay bills and care for children who aren't thinking decades ahead to retirement. Nudging Workers to Save Several countries are trying to force -- or nudge -- workers to save more for retirement. Australia went the furthest, the soonest. It passed a law in 1993 that makes retirement savings mandatory. Employers must contribute the equivalent of 9.25 percent of workers' wages to 401(k)-style retirement accounts. (The required contributions will rise to 12 percent by 2020.) Australians can't withdraw money from their accounts before retirement. When politicians were debating the plan, only about half of Australians supported it. Within six months, approval rose to 85 percent. The difference: Workers started receiving statements that showed retirement savings piling up, says Nick Sherry, who helped design the program as a cabinet minister. In October 2012, Britain required employers to start automatically enrolling most employees in a pension plan. At the start, contributions must equal at least 2 percent of earnings, half provided by employers. By 2018, contributions must rise to 8 percent, of which 3 percentage points will come from employers. In 2006, the United States encouraged companies to require employees to opt out of a 401(k) instead of choosing to opt in. That means they start saving for retirement automatically if they make no decision. Easing the Pain Rebounding stock prices around the world and a slow rise in housing prices are helping households recover their net worth. In the U.S., retirement accounts -- defined-contribution and defined-benefit plans combined -- hit a record $12.5 trillion the first three months of 2013, according to the Urban Institute. They've gone higher since. However, net worth is merely climbing toward a level considered inadequate at its peak in 2007. Boston College's Center for Retirement Research says the recovery in housing and stock prices still leaves 50 percent of American households at risk of being unable to maintain their standard of living in retirement. That's down from 53 percent in 2010 but up from 44 percent before the Great Recession hit in 2007. Only half of all Japanese say they've even thought about how to finance their retirement. And 63 percent are counting on getting most of their income from a government pension system that's going broke. When they look into the future, retirement experts see more changes in government pensions and longer careers than many workers had expected: • Pension cuts are likely to hit most retirees but should fall hardest on the wealthy. Governments are likely to spend more on the poorest among the elderly, as well as the oldest, who will be in danger of outliving their savings. • Those planning to work past 65 can take some comfort knowing they'll be healthier, overall, than older workers in years past. They'll also be doing jobs that aren't as physically demanding. In addition, life expectancy at 65 now stretches well into the 80s for people in the 34 OECD countries, an increase of about five years since the late 1950s. "My parents retired during the Golden Age of retirement," says Mercer consultant Dreger, 37. "My dad, who is 72, retired at 57. That's not going to happen to somebody in my generation." 
Richard Drew/AP SAN FRANCISCO -- Retired schoolteacher Donald Hovasse signed up for Twitter about a year ago at the urging of his daughter. He lost interest after trying the service a few times and finding lots of celebrities but few of his friends using the online social network. "I didn't really get the point of it at all," said the Las Vegas resident. "Most of them were people I wasn't interested in hearing what they had to say anyway." He said, however, that he does check Facebook everyday to see what his friends are up to. Hovasse's experience highlights a risk for investors as Twitter marches towards this year's most anticipated initial public offering in the United States, expected to begin trading on the New York Stock Exchange in mid-November. According to a Reuters/Ipsos poll, 36 percent of 1,067 people who have joined Twitter say they don't use it, and 7 percent say they have shut their account. The online survey, conducted Oct. 11-18, has a credibility interval, a measure of its accuracy, of plus or minus 3.4 percentage points. In comparison, only 7 percent of 2,449 Facebook members report not using the online social network, and 5 percent say they have shut down their account. The results have a credibility interval of 2.3 percent. People who have given up on Twitter cite a variety of reasons, from lack of friends on the service to difficulty understanding how to use it. Twitter declined to comment for this story, saying it is in a quiet period ahead of its IPO. Twitter's attrition rate highlights a challenge that has dogged the online messaging site over the years: while it has managed to enlist many high-profile and avid users, from the pope to President Barack Obama, Twitter has yet to go truly mainstream in the way Facebook (FB) has. Convincing ordinary people to think of Twitter as an indispensable part of their lives is key to the company's ability to attract advertisers and generate a profit. Twitter reported it had 232 million "active" users -- people who access the service at least once a month -- at the end of September, up 6.1 percent from the end of June. Twitter's quarter-over-quarter growth in active users hasn't exceeded 11 percent since June 2012. When Facebook was a similar size, its active users were increasing by more than 20 percent every quarter, and it wasn't until the social network neared the half-a-billion member mark that its user growth decelerated to 12 percent. "Twitter is a great service, it's still got growth in front of it. But in my opinion, I would say the opportunities are less than that of Facebook, and it has to be valued appropriately," said Dan Niles, chief investment officer of tech-focused hedge fund firm AlphaOne Capital Partners. "The data would seem to imply that the ultimate revenue potential for this company is less than for Facebook," Niles said, referring to Twitter's number of active users. Twitter's revenue in the third quarter more than doubled from the year before to $168.6 million, while its net loss tripled to $64.6 million. Analysts expect Facebook, which is due to report its third-quarter results later this month, to bring in $1.9 billion in quarterly revenue. Quitters Twitter aims to become the "fabric of every communication in the world" and to eventually reach every person on the planet, Chief Executive Officer Dick Costolo has said. Still, Twitter acknowledged in its IPO prospectus that "new users may initially find our product confusing." The company prides itself on staying true to its roots: it lets people send 140-character messages and doesn't pack in scads of extraneous functions. Since its inception, Twitter has resisted overtly manipulating how people use its platform, instead preferring conventions to be formed organically. As a result, new users often find it initially difficult to grasp how discussions ebb and flow, complaining that features such as the "hashtags" that group Tweets by topic, abbreviations for basic functions (for instance, RT for retweet) and shortened Web links, are geared towards a technologically savvy crowd. "The average person that's coming on here, they're still baffled by it," said Larry Cornett, a former executive at Yahoo (YHOO) and designer at Apple (AAPL), who now runs product strategy and design consulting firm Brilliant Forge. "If they want the mass adoption and that daily engagement, they have to make it really easy for people to consume." According to the Reuters/Ipsos poll, 38 percent of 2,217 people who don't use Twitter said they didn't find it that interesting or useful. Thirteen percent said they don't understand what to use Twitter for. The results have a credibility interval of 2.4 percent. Twitter has taken steps to help new members. In December 2011, it introduced a new "Discover" section to highlight the most popular discussion topics based on a person's location and interests. The company also simplified some features and rolled out new tools that embed photos and videos directly in a person's tweet stream, making for a richer and easier-to-use experience. These changes may mean that Twitter's retention rate for the past several months is better than its overall retention rate, which includes people who joined years ago, say analysts. Brian Wieser, an analyst with Pivotal Research Group, said Twitter's current user base is already big enough to be valuable to advertisers. Investors need to get more comfortable with the idea that Twitter isn't for everyone, he said. "The practical matter is that this is a niche medium," he said. "Their appeal, they will never be as broad as Facebook."