Throughout Pride month, I have been giving presentations about the unique aspects of financial planning and investment advice for LGBTQ+ individuals. Other advisors often tell me, “I don’t discriminate. I treat everyone the same.” That sentiment, while well intentioned, misses the mark and all but signals a lack of understanding of key differences between heterosexual and LGBTQ+ individuals. They are important differences that should be planned for both by LGBTQ+ people and those professionals working with them.
There is a growing demand for financial planners and other professionals with expertise in addressing the particular needs of LGBTQ+ clients. Those who best fit the bill realize that equity doesn’t always mean treating everyone the same or having a cookie-cutter approach. Here are some of the key issues.
Marriage rights have only existed for about six years in Florida and at the federal level. This historical change conferred over 1,000 rights to legally married same-sex couples. Older LGBTQ+ couples may never have thought they would get married, and so they made decisions that never planned for a spouse.
One common example: people who chose a single-life pension payout instead of planning for a surviving spouse. It is an irreversible decision.
In one case, I inquired with a Fortune 500 company when the marriage laws changed to see whether a client of mine could add his husband as beneficiary, and after some research, the company came back and told me, “no.” The pension will stop upon the retiree’s passing, and the surviving spouse gets nothing.
This may also be true of Social Security benefits. Many couples never planned for spousal or survivor’s benefits, so they didn’t maximize their planning. Even couples that were together for more than 10 years and separated but never had the chance to get married may miss out on divorced spouse benefits.
Many LGBTQ people have hostile family members who refuse to recognize their relative’s same-sex partner, married or not. Those relatives are often all too ready to step in and interfere in a medical emergency or upon someone’s passing. It is crucial for LGBTQ people in this situation to have their legal documents — such as a power of attorney or a living will — written properly and have them readily available, especially if they decide not to get legally married.
I had one situation where a family had the water turned off on a man’s home after his same-sex partner passed away, and the house was not properly titled to protect the survivor. I took the surviving partner to an estate attorney, who told us that this was not even a case of an eviction, but an “ejection.” He had no legal right to stay in his own home. This is far more likely to occur with same-sex couples.
Many older LGBTQ+ folks never had children and are more likely to risk aging alone. It is well documented that these folks often go back into the closet because they feel vulnerable. Other older adults may be less open to LGBTQ+ people, and many caregivers are from socially conservative and religious backgrounds that are also less welcoming. This can create a feeling of intimidation and isolation. These situations also require more specialized planning, especially regarding long-term care and senior housing.
I have LGBTQ+ individuals who are HIV+. For them, even something as common as life insurance, long-term care insurance or choosing a Medicare plan becomes more complicated. Many insurance companies now are offering specialized products for HIV+ people so that they can be approved and get the coverage they need and want, but this is another example of specialized planning.
YOUNGER LGBTQ+ COUPLES
Just as many older gay and lesbian couples might never have thought about having children, the opposite is true of younger couples. Many are looking toward adoption, surrogacy, in-vitro fertilization and other options. These can be expensive and legally fraught situations that most opposite sex couples don’t face. This also requires specialized advice and planning.
These are just some of the significant differences, but the good news is that most of these issues can be planned for. The first step is to realize these issues exist and not assume that one size fits all.
David Treece, AIF® is Founder of Treece Financial Group in Miami, and is associated with Cetera Advisors. He can be reached at 305-751-8855 or email@example.com.
HOW TO FIND A PLANNER
Here are a few ways for LGBTQ+ individuals to find a financial planner that fits their needs:
▪ Seek out providers and advisors who demonstrate their expertise in addressing your specific needs. Search their online profile and website for their relevant experience, customized services and any LGBTQ+ resources.
▪ Tap into digital communities to find the businesses that are aligned to your financial needs.
▪ Get recommendations from friends and colleagues in similar circumstances. Word of mouth is one of the best ways to find the right financial planner for you.
▪ Check with your local Chamber of Commerce for any LGBTQ+ specific groups or services that can point you in the right direction, including LGBTQ+ Chambers of Commerce.
▪ Attend local events and workshops to get a sense of a financial planner’s expertise to meet your needs.
▪ Ask a financial planner about their experience with LGBTQ+ clients on issues such as family estate situations, senior housing, caregiver discrimination, and Social Security benefits for same-sex couples.