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As millions get ready to mark World Pride 2019 and the 50th anniversary of the Stonewall Uprising, it is remarkable for me to think back 25 years, when I was a recently out lesbian, who was also a financial planner and investment adviser. I discovered through my own experience that planning required many more steps for those of us in the LGBTQ community.
While the progress has been dizzying (my mother now likes my partner more than she likes me, which – believe me – is progress!), there is still some confusion about certain aspects of the financial planning process for the community. Here are five financial questions for my LGBTQ brethren and their families.
1. Does Marriage Equality Solve Everything?
The Supreme Court decision in Obergefell vs. Hodges (2015) recognized that same-sex couples had the fundamental right to marry, effectively legalizing marriage for LGBT couples and opening up the doors to all of the benefits that marriage provides, including spousal tax advantages in life and death, the sharing of workplace benefits and adoption.
But, laws vary from state to state, which means depending on where you live, hate crime and anti-discrimination laws may not protect you or your family in the ways that you might assume. Varying laws may impact things such as employment, housing, and adoption, so before you pack up your U-Haul, check out the database from Lambda Legal, a non-profit legal organization focused on the civil rights for the LGBTQ community, which outlines each state’s laws that may be of concern to LGBTQ people and their families.
2. Should we really get married?
You do not have to do anything you don’t want to do—really! While marriage provides many rights for same-sex couples, it’s not for everyone. In fact, some couples may find that marriage would cause them to see an increase in taxes. Similarly, for those who are about to file financial aid and student grant applications for college, it may be advantageous to report one income instead of two. As an alternative to marriage, some states and municipalities allow domestic partnerships, which can provide more benefits compared to same-sex couples who aren’t married.
3. We have/want kids…now what?
Whether you have children from a previous relationship, plan to adopt or have them yourselves, you will need to discuss the challenges of becoming a parent. For many LGBTQ couples, the financial impact of that decision could start well before the child arrives, which means that you may need to save money for the process. And if neither of you is the biological parent – aka you’re adopting – there could be other financial implications to consider. Here again, it is important to understand your state laws when it comes to parental rights, co-guardianship/co-parenting agreements and adoption.
4. We’re married so do we need a will?
Nice try, but estate planning is still on your to-do list, whether or not you choose to marry. You might want to consider a will, which is a legal document that details where your assets go after you pass away; a power of attorney, in which you designate someone to make certain legal and financial decisions for you; and a health care proxy, which names someone to make health care decisions on your behalf. Just like I advise straight couples, it is also important to make clear your intentions for burial in a letter of instruction, especially if you are going against the custom of your family of origin. While there are many online options for creating these documents, I recommend engaging an estate-planning attorney to assist.
5. Is financial planning different for LGBTQ folks?
Everyone – I mean EVERYONE – needs financial planning, which encompasses goal setting, debt management, cash flow analysis, retirement, insurance and estate planning, and education funding among others. Lambda Legal has a free “Take the Power” toolkit, which features financial and legal planning advice for the LGBT community. While any qualified financial planner should be able to assist you, you may seek a professional who has specific expertise in the topic. As you interview potential candidates, ask them about their experience with LGBTQ clients.