401(k) Plans and Same-Sex Couples

CFP® Certificants in the News

Financial planning for same-sex couples is as important as planning for opposite-sex couples according to CFP Board.  For context, the Supreme Court’s 2015 decision in Obergefell gave same-sex couples the right to marry and, once married, to enjoy the same rights as opposite-sex married couples.  However, the new rights generally apply only to married couples, not unmarried ones. This article will raise awareness of these protections and highlight potential alternative strategies for 401(k) plans for both unmarried and married same-sex couples.

401(k) Plan—Legal Protections for Same-Sex Married Couples

401(k) plans are one of the most popular tax-deferred savings strategies in America.  What’s not to love, right?  When you combine pre-tax (or Roth) deferrals, potential employer matching contributions, and almost unassailable creditor protection, the 401(k) plan is a premier retirement accumulation strategy. But how did Obergefell help the participant’s same-sex spouse?  The answer to that question is best illustrated by two examples.

Example 1: Participant dies—Haden and Blake are married, Hayden does not work outside of the home, and Blake’s 401(k) plan has a $500,000 balance.  If Blake dies, Haden receives 100% of Blake’s 401(k) plan balance—unless Hayden previously agreed to waive that right.  Let’s be clear, Hayden cannot be forced to waive those rights.

Example 2: Participant Lives—Now let’s give Blake a reprieve from the Grim Reaper. As long as Blake is alive, Blake can take distributions from the 401(k) plan without Hayden’s permission.

But here’s a question—what rights do individuals in an unmarried same-sex relationship have in their partner’s 401(k) plan?  The short answer is none unless each partner names the other as the beneficiary of the 401(k) account. Even then, beneficiary designations can generally be changed at the account owner’s discretion.

Here’s your takeaway—Unmarried same-sex couples do not have Obergefell protections and additional financial planning is vital.


The information presented herein is provided purely for educational purposes and to raise awareness of these issues; it is not meant to provide and should not be used to provide legal, identity theft protection, investment, income tax, risk management, retirement, estate, or financial planning advice of any kind. An experienced and credentialed expert should be consulted before making decisions relating to the topics covered herein. There are variations, alternatives, and exceptions to this material that could not be covered within the scope of this blog.