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2011 may be a very taxing year for same-sex couples, regardless of marital status

Onerous federal estate tax set to return

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Congratulations, you assembled your friends and family and got married in Washington DC. Now it is recognized in both DC and Maryland. It’s the moment of a lifetime and a moment you’ve been waiting for.

Well, guess what? The IRS doesn’t care! That’s right, to the IRS, you are still strangers according the law. If your estate and retirement plans include leaving your partner your estate, next year may well prove to be a expensive year to die regardless of marital status!

Thanks to the Defense of Marriage Act, even though same-sex couples can now get married in Washington DC and have it recognized in the state of Maryland, the IRS still does not recognize the validity of that marriage. As a result, unlike heterosexual married couples who can pass an unlimited amount of assets between spouses at death, same-sex couples can be hit with the Federal estate tax, regardless of marriage status. Understanding how the Federal estate tax rules work and following a couple of action items could significantly reduce or entirely eliminate this tax.

The Federal estate tax is due when a person leaves assets above a certain dollar amount to someone other than a heterosexual married spouse. Straight married couples get a free pass called the unlimited martial deduction. In 2010 only, there is an unlimited exemption. But, you may owe capital gains tax on any appreciation. Each estate can exempt $1.3 million of gains from the carryover basis rule. Another $3 million exemption applies to assets inherited from a spouse.

In 2011, however, unless Congress acts, Federal estate tax rules change. As a result, same-sex couples could witness a significant tax bite if a partner dies next year. Straight married couples won’t have this problem since the IRS continues to give them a free pass with the unlimited martial deduction.

Next year, at the death of a partner, the value of any estate above $1 million will be taxed at 55%.

Think you don’t have a $1 million, well think again!

How the IRS calculates your gross estate for Federal estate tax purposes probably includes some items you likely wouldn’t count. It also means that many more gay and lesbian couples will feel this tax bite, if you don’t plan properly. The largest impact will likely be felt by older gay and lesbian couples, who are nearing retirement and have built up retirement assets over the course of their life. This becomes an issue as they rely on their partner’s asset to maintain financial independence.

How the IRS calculates the Federal Estate Tax:

To determine whether an estate is hit by the Federal estate tax, it is important to understand how the IRS calculates the Federal Estate Tax. For the purposes of the estate tax calculation, the IRS includes almost everything. Yep, add up all the assets, including personal assets, cars, collections, art, etc. The biggest ticket items usually include the following:

• savings and checking accounts, CDs;
• brokerage or investment accounts;
• retirements accounts like IRAs, Roth IRAs, 401(k)s, 403(b)s or TSP plan assets;
• personal property such as boats, paintings, collections, etc.;
• real estate titled in the decedent’s own name or the percentage portion that is titled • as tenants in common;
• the gross value of life insurance proceeds in the decedent’s own name;
• property that is titled as joint tenants with rights of survivorship (which allows the property to pass automatically to a partner at death, the way many gay and lesbian couples have their homes titled).

The last two bullets are important and frequently overlooked. Most people know that life insurance passes INCOME tax free, but if it is owned by the person who dies, the IRS includes the entire amount of the life insurance proceeds in the total amount of the ESTATE tax calculation. As a result, if you own a $500,000 life insurance policy in your name and have your partner as the beneficiary, your estate increases by $500,000

The IRS also includes the gross value, less any mortgages on property titled as Joint Tenants with Rights of Survivorship (JWROS) in the estate of the first person to die UNLESS payments or contributions can be proven.

Let’s take a look at a hypothetical example: Mark age 55 and Max age 60 are looking to retire in 5 years. They own a $550,000 home with a $50,000 mortgage titled as joint tenants with rights of survivorship. Max has been paying the mortgage, while Mark has been paying all the living expenses. Max also owns two life insurance policies: one from work which is worth $250,000 and a personal policy worth also $250,000. His 401(k) has taken a hit with the market but is still valued at $425,000 and he has a rollover IRA with $25,000. He also has a brokerage account worth $25,000 and a $25,000 CD.

While drinking a martini in Rehoboth, Max accidently chokes on an olive and dies. Unless Congress acts, here’s how the IRS will calculate the estate in 2010 versus 2011.

Note that because Max made all the contributions, the IRS adds the home to his estate, even though it is titled jointly. Mark could not show that he contributed to the mortgage payments. He was paying for the utilities, car payments, etc.

In 2011, Mark has to pay $275,000 in Federal estate taxes. Again, straight married couples pay zilch, zero, nada! Mark still walks away with a cool $1,225,000, right?

Well, not exactly. Because Mark will continue to live in the home that part of the estate is not liquid or immediately accessible. If the value of the house is removed, the actual cash amount that he receives from the estate is reduced to $725,000 or ($1,500,000 less $500,000 (the value of the home) less $275,000 (the estate taxes)).

Mark, like any heterosexual married beneficiary, is going to have to pay legal/probate fees. In addition, Mark will also have to pay Federal income taxes on the 401(k) and IRA money when he starts taking distribution. In the worse case scenario, if he pulled out all those funds in a lump sum, the tax could be taxed up to 35%.

The question then becomes will Mark, who has a life expectancy of an additional 24.37 years according to Social Security table, have enough assets to live at least that long without running out of money.

The estate tax is often considered a voluntary tax because with proper advanced planning, Max and Mark could have significantly reduced their overall estate tax burden. By re-structuring some of their assets today, they could reduce their estate size to potentially pay zero Federal estate taxes. That’s right, zero, zilch, nada!

The question then becomes, where is a good place to spend the $275,000 that would otherwise have gone to estate taxes, a problem we would all like to have!

What to do:

• Calculate the gross estate including all your assets. Be sure to calculate it the way the IRS does.
• Review your estate planning documents and beneficiary designations.
• Review the titling of all your assets to determine in to whose estate the asset falls.
• Review the ownership of your life insurance including both your personal and work. The current ownership structure of the life insurance could simply be increasing the amount you will be paying to the IRS. By retitling the ownership of the life insurance to either a trust or putting it in your partner’s name you may be able to remove it from your estate. Use caution, however, because retitling assets incorrectly could trigger a costly current gift tax if not done correctly.
• Review how your home is titled and who is making payments on the mortgage. It is common for one partner to pay the mortgage while the other pays for other expenses. This could cause an estate trap because it may be difficult to substantiate payments into a jointly owned home. Retitling your home incorrectly could trigger a costly current gift tax of 55% if not done correctly. In some jurisdictions, even if it is done correctly, it may trigger a local transfer tax.
• Consult a professional to determine what is the best way to structure your estate and minimize your estate taxes.

The information provided is for general information. It is not intended to be all-inclusive on estate taxes.

Nicholas Burkholder and Joseph Kapp ([email protected]) are registered representatives and investment advisor representatives with Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor, offering insurance through Lincoln affiliates and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a legal or tax advisor regarding this material as it relates to your personal circumstances. The content of this material was provided to you by Lincoln Financial Advisors for its representatives and their clients. CRN201004-2040969

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Commentary

The boy they refused to forget

Jonathan David Muir Burgos released from Cuban prison after participating in protest

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Jonathan David Muir Burgos (Graphic by Ignacio Estrada Cepero)

When the Washington Blade first reported the story of Jonathan David Muir Burgos, the news centered on a 16-year-old Cuban teenager who had been sent to prison after taking part in a public protest in Morón, Ciego de Ávila. At the time, the facts were straightforward. A minor had lost his freedom, and his case was beginning to attract attention beyond Cuba’s borders.

Today there is another fact that deserves to be recorded with the same rigor.

Jonathan is no longer in prison.

His release, confirmed by multiple news organizations, closes one chapter of a story that, for months, was followed by journalists, human rights organizations, religious communities, and countless individuals who refused to let his name disappear from public view. Each of them became part of a much larger effort to ensure that the imprisonment of a Cuban teenager would not fade into silence as the news cycle moved on.

That collective attention does not explain every decision that ultimately led to Jonathan’s release, and it would be irresponsible to suggest otherwise. Judicial processes are rarely shaped by a single factor. What can be said with certainty is that Jonathan’s story never disappeared. It continued to be documented, discussed and followed long after the initial headlines were published.

Behind every widely reported case there is a family living a reality that rarely appears in the news. In Jonathan’s case, there was a father who also serves as a Protestant pastor and who spent months speaking publicly about his son while asking others not to forget him. There was a mother enduring the uncertainty familiar to any parent separated from a child. There were classmates, friends, and neighbors waiting for the day when Jonathan would no longer be known as the teenager behind bars, but simply as the young man returning home.

The image of a prison gate opening often marks the end of a news story. In reality, it marks the beginning of something far more difficult. A teenager must resume an interrupted education, reconnect with friends, rebuild ordinary routines, and recover a sense of normalcy after months in confinement. Those experiences seldom become headlines, yet they are part of the true cost of imprisonment.

Jonathan’s release is therefore more than an update to a story previously reported. It is a reminder that public attention has value. Journalism matters because it documents. Human rights organizations matter because they investigate. Communities matter because they refuse indifference. Families matter because they continue to wait, even when the waiting becomes unbearable. None of these efforts should be viewed in isolation. Together they ensure that a person’s story does not disappear simply because time has passed.

Many people leave prison after being forgotten.

Jonathan David Muir Burgos walked out of prison knowing that, throughout those months, thousands of people had continued to speak his name, follow his case and hope for the day when this story could be told differently.

Today, that day has arrived.

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Religion, spirituality, and humanity: finding meaning in a complex world

LGBTQ refugees find hope in faith, common humanity

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A UNHCR-affiliated community center for refugees in Kraków, Poland, on April 5, 2024. LGBTQ refugees around the world often find hope in religion and their shared humanity. (Washington Blade photo by Michael K. Lavers)

Religion and spirituality continue to shape the lives of billions of people around the world. Whether expressed through organized faith traditions, personal beliefs, cultural practices, or philosophical reflection, they remain powerful influences on how people understand themselves, others, and the world around them.

As a displaced person, I have seen firsthand how religion and spirituality affect people’s lives during times of uncertainty, hardship, and hope. In communities facing displacement, poverty, illness, conflict, and long waits for resettlement opportunities, questions about meaning, purpose, resilience, and belonging are not abstract concepts. They are part of everyday survival.

Religion and spirituality are often discussed together, yet they are not identical. Religion generally involves organized systems of belief, sacred texts, rituals, and communities. Spirituality is often more personal and may involve an individual’s search for meaning, connection, and inner peace without necessarily belonging to a specific faith tradition.

Despite their differences, both seek to answer some of humanity’s oldest questions: Why are we here? How should we live? How do we cope with suffering? What gives life meaning?

A search shared across cultures

Human beings have always searched for answers to the mysteries of existence. Across continents and throughout history, people have developed different ways of understanding life, death, nature, and the universe.

Christians may turn to the Bible. Muslims may seek guidance from the Quran. Jews may draw wisdom from the Torah. Hindus, Buddhists, Sikhs, Indigenous peoples, and many others have their own spiritual traditions and teachings.

Recently, an Australian reader, Eveline Goy, shared a thoughtful reflection after reading one of my earlier articles. She noted that while some people may speak of “false prophets” based on their religious beliefs, others may find truth and wisdom in entirely different traditions. She also highlighted the rich spiritual heritage of Australia’s First Nations peoples, whose stories of the Rainbow Serpent continue to shape cultural identity and understanding of creation.

Her reflection reminded me that while beliefs vary widely, the desire to understand our place in the universe appears to be deeply human.

Religion, love, and LGBTQ people

For many LGBTQI+ people, religion can be both a source of comfort and a source of pain.

Throughout history, faith communities have offered people hope, belonging, and moral guidance. Yet many LGBTQI+ individuals have also experienced rejection, exclusion, or condemnation from religious institutions because of their sexual orientation or gender identity.

As a queer refugee, I know how deeply these experiences can affect a person’s sense of self-worth and belonging. Many LGBTQI+ refugees I work with were not only rejected by society but also by families and faith communities they once trusted. Some were told they were sinful, broken, or unworthy of love. Others were forced to hide their identities in order to remain accepted.

Yet this is not the whole story.

Across the world, there are also religious leaders, churches, mosques, synagogues, temples, and faith communities that embrace LGBTQI+ people and affirm their dignity. Many believers interpret their faith through the values of compassion, justice, mercy, and love rather than exclusion.

At its heart, love is one of the most universal values found across spiritual traditions. Whether expressed through faith, friendship, family, or community, love has the power to heal wounds, build bridges, and restore dignity.

For many LGBTQI+ people, the challenge is not choosing between faith and identity but finding spaces where both can coexist.

Religion and spirituality in difficult times

We live in a world facing numerous challenges. Wars continue across several regions. Climate change affects communities through droughts, floods, and extreme weather events. Economic uncertainty impacts millions of families. Refugees and displaced people face uncertain futures.

In such circumstances, many people turn to religion or spirituality for comfort and guidance.

Here in Gorom Refugee Settlement Camp, I see this every day. Some gather for prayer. Others find strength in sacred texts. Some find comfort in collective worship, while others seek peace through personal reflection and meditation.

For many, faith provides hope when circumstances seem hopeless.

Yet I have also observed something equally important. Not everyone draws strength from religion. Some find resilience through friendship, mutual support, activism, creativity, and the determination to keep moving forward despite adversity.

This reminds us that while religion and spirituality can be sources of strength, so too can our shared humanity.

The human values that unite us

One of the most remarkable aspects of religion and spirituality is that despite their differences, many traditions promote similar values: Compassion, kindness, forgiveness, generosity, honesty, and respect for others.

These values are not exclusive to any single religion or philosophy. They appear across cultures, faiths, and secular worldviews.

Living in a refugee community has reinforced this lesson. Some of the most generous people I have met are deeply religious. Others are not religious at all. What matters most is not necessarily what people believe, but how they treat one another.

When someone shares food with a hungry neighbor, that is compassion.

When a person comforts a frightened child, that is humanity.

When communities stand together despite differences, that is solidarity.

These actions often speak louder than doctrine.

Building bridges in a diverse world

Religion and spirituality have inspired extraordinary acts of kindness throughout history. Yet they have also contributed to division when people become convinced that only their own beliefs are valid.

In today’s interconnected world, we encounter a greater diversity of perspectives than ever before. This diversity can enrich societies, but it also requires humility, curiosity, and respect.

No individual, community, or tradition possesses all the answers to life’s mysteries.

The challenge is not to eliminate differences but to learn how to coexist peacefully despite them.

For LGBTQI+ people, refugees, people of faith, and those without religious beliefs, dialogue and mutual respect remain essential. We all benefit when societies create space for people to live authentically while respecting the dignity of others.

Religion and spirituality continue to play important roles in human life. They help many people find meaning, resilience, comfort, and community during difficult times.

At the same time, the values that often matter most compassion, dignity, kindness, justice, and love are not confined to any single religion or belief system.

My experiences as a queer refugee have shown me that hope can emerge from many places. Some find it in prayer. Some find it in philosophy. Some find it in activism. Some find it in human connection.

Perhaps what ultimately matters is not which path we follow, but whether that path encourages us to become more compassionate, understanding, and caring human beings.

In an uncertain world marked by division and conflict, our shared humanity may be the strongest foundation upon which we can build a more peaceful, inclusive, and loving future for LGBTQI+ people, for people of faith, and for all humanity.

Aby lives in the Gorom Refugee Settlement Camp in South Sudan.

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IDAHOBiT a reminder we all must stand up against transphobia

Trans rights remain under attack in U.S., around the world

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Máxima Mauricio Rodas, a transgender Latina activist and sex worker, participates in the Gender Liberation March that took place in D.C. on Sept. 14, 2024. The International Day Against Homophobia, Transphobia, and Biphobia is a reminder that we all must challenge transphobia. (Washington Blade photo by Erkki Forster)

May 17 is the International Day Against Homophobia, Transphobia, and Biphobia. 

In 2026, transphobia is the biggest issue out there: all the stereotypes that were used against the LGBTQ community in general in the past are now used to attack the rights of transgender people and to create a moral panic against them. As a person who understood that they were not a girl — despite being assigned female at birth — since they were four, and who in their 30s had to wait in line for a gender clinic, I am obviously worried about this situation. Trans people continue to be seen less as people and more as part of an “agenda,” and there is a greater risk that the international trend of attacks on trans rights is just a first step in a broader attack on the LGBTQ community, and that soon bi, gay, and lesbian people will lose part of their hard-won rights to have the same protections and opportunities as heterosexual people.

When, in U.S. states such as Kansas, trans people face escalating legal and political restrictions on recognition that affect their everyday lives — for example, requiring their driving licenses to match the gender assigned at birth even after transition — while trans people in the U.S. are banned from military service and federal funding is stopped for gender-affirming care for trans youth, it is obvious to everyone that the problem is real. It is also global.

For example, there have been significant attacks on trans rights in the UK in recent years, especially against trans youth, many of whom have been denied gender-affirming care. The day when I finally found the energy to write this story was the day of the local British elections, when surprisingly many seats in city and town councils were won by the queerphobic populist Reform Party, creating some new Reform-dominated councils. Reform Party leader Nigel Farage has praised U.S. President Donald Trump and expressed admiration for Russian dictator Vladimir Putin — both of whom are known for endangering the lives of their trans citizens and rejecting trans identity as something that should be accepted.

So, who can challenge it? The general public often takes cues from public figures. Celebrities play a significant role in shaping public opinion and framing how different social issues are understood.

We need trans celebrities to speak up against transphobia when “anti-trans” celebrities like JK Rowling oppose our rights. It seemed that when conservatives around the globe stood up together to support each other, the trans community should unite, and trans celebrities should protect their trans siblings, while the broader LGB community should recognize the threat and unite around trans rights.

But not everything is so simple. Surprisingly, at a time of the greatest attack on trans rights in this century, many lesbian, gay, bi and even trans celebrities and influencers openly support transphobic policies and ideologies.

One of the clearest examples is Caitlyn Marie Jenner, a retired Olympic gold medal–winning decathlete and public figure known for her participation in the reality show “Keeping Up with the Kardashians.” She is one of the most famous trans people in the world.

From 2015 to 2016, she starred in the reality television series “I Am Cait”on E!, which focused on her gender transition and on telling a story to inspire the younger generation of trans people. In the first episode, Jenner also visited the mother of Kyler Prescott, a 14-year-old trans child who died by suicide earlier that year, and spoke openly about using her privilege to fight for awareness, equality, and dignity for trans people. The idea of supporting trans youth was one of the core themes of her TV series. 

That was then.

Jenner’s perspective on trans rights became more and more transphobic. For example, in 2021 she opposed trans girls participating in girls’ school sports. In 2023, she launched a PAC campaign attacking trans youth rights. She also expressed support for Donald Trump and said about herself that she would never be a “real woman.”

Another famous example is transmasculine sex educator and activist Buck Angel, a former adult film actor. He was seen as a modern and progressive person in the 2000s and early 2010s, praised for increasing visibility for trans men through sex education, documentaries, public speaking, and media work. But later he started calling himself “transsexual” rather than “transgender,” following a more transphobic and rigid view of trans identity, and openly showed support for Trump and MAGA.

Of course, there are plenty of trans celebrities who continue to fight for trans rights — the most obvious example is Lana and Lilly Wachowski, notable film directors who gave us “The Matrix” films and the “Sense8” TV series. But the Wachowski sisters were known for being politically left-wing and progressive even before their transition. They are part of a progressive movement, not just a “famous trans person” like Jenner was.

So, why is this happening? Why have more mainstream and conservative trans celebrities, as well as some LGBTQ groups, turned away from trans rights? And what do we need to do?

One of the reasons is fear. 

Popular and privileged people — whether they are socialites, actors or leaders of big organizations — are not used to being outcasts, and so they follow dominant trends. For them, the fear of not fitting in, being rejected by the audience and losing their position in society became bigger than their sense of justice. This is probably one of the reasons why some LGBTQ groups, such as the Log Cabin Republicans in the U.S., became more transphobic, or why the LGB Alliance in the UK became more popular.

Another reason is the polarization of society. 

Some LGBTQ activists may hate me for saying this, but it is partly our fault. Mainstream trans communities sometimes make trans identity look like a “trend” or part of an ideology. The media — especially tabloids — are even more to blame for this stereotype than the trans community itself. When uninformed people hear about trans people today, many of them imagine left-wing, maybe even socialist, non-religious young supporters of Palestine who are good at understanding ecological issues and worried about global warming. Of course, many trans people are like that. But many are not. And those who are not often feel excluded and become more prone to public self-hatred.

It created a cycle in which people who did not feel part of the community started searching for an alternative that rejected them for being trans and encouraged them to accept transphobic rhetoric, betraying themselves and their trans siblings. This led to greater polarization and hatred against conservative trans people, pushing them even further away.

The International Day Against Homophobia, Transphobia, and Biphobia needs to be a day when we stand up against all transphobia, including the kind expressed by trans people, while at the same time supporting all trans people, no matter how uncomfortable their views may be for us.

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