Is estate planning that different for people from the LGBTQI community? It can be, even though many people in this group are legally married, they can still face discrimination, including by their relatives. Many may have had less time to build shared wealth with a spouse or partner, if they have one. People in the community are less likely to have children, and as many as 50% report feelings of isolation. And lack of familiarity with the law can keep them from receiving what they may be entitled to.
If you’re a member of the LGBTQI community, you deserve an estate plan that truly reflects your needs and goals. You deserve to leave the legacy you want. That requires a financial plan and an estate plan that work to maximize your assets and protect you from financial abuse.
Your financial plan should include a detailed understanding of your assets and how they will serve you over time. You should budget for today and plan for tomorrow, including retirement. Your estate plan directs your assets toward the beneficiaries you choose, whether that is to your spouse, a family of choice, or a beloved school or charity.
If you die without a will or estate plan, your assets will be passed down to your spouse and closest biological relatives. If you want to leave your estate to anyone else, you will need to document that in an estate plan.
Unfortunately, as financial advisor Maureen Ayral pointed out in a recent article, LGBTQI individuals need to be especially vigilant with their estate plans. Far too often, adult children and other family members reject the validity of an LGBTQI relationship or of a chosen family. Therefore, you should keep any documentation of your legal union with your estate plan.
A good estate plan often includes a will, a revocable or irrevocable trust, a durable power of attorney for finances and a document allowing you to choose what care you should receive if you become incapacitated. This might be a living will, an advance directive or a healthcare power of attorney.
When you set up your estate plan, it’s a good idea to take into account any assets you have that don’t go through probate, as well. These include things like life insurance, retirement accounts and jointly-owned property. Understanding how all of your assets will pass to your beneficiaries will help you direct probatable assets to the right people or institutions.
Married couples may be entitled to Social Security spousal benefits
Now that same-sex marriage is legal, your marriage is legally the same as a heterosexual marriage. If you have been married for 10 years or longer, you have a claim on your spouse’s Social Security. Once your spouse reaches full retirement age or accepts their Social Security benefits early, you may be entitled to spousal benefits. That could allow you to defer accepting your own Social Security retirement income, which could increase the amount you ultimately receive.
Long-term care considerations
One thing to think about is that women live, on average, five years longer than men. That could mean that lesbian couples will need to stretch their money over a long retirement. It also increases the chance that you will need long-term care insurance. No one wants to be a burden on their family, and some LGBTQI folks may not have the option of relying on family for their care.
There are a number of issues in the LGBTQI community that may affect your estate plan. Be sure to bring them up when working with your estate planning attorney.