Financial planning for LGBTQ+ families

Canada Life - Jun 01, 2022
From financial planning to estate planning, there are many aspects to financial wellness that are unique to LGBTQ+ individuals, partnerships and families. Here are some considerations for your individual LGBTQ+ financial planning

While it’s no secret that the last few years have brought stressors to our lives, the uncertainty has not affected everyone equally. A recent survey reported that more than half of LGBTQ+ people are feeling higher stress levels—higher than levels reported by those outside the LGBTQ+ community.  The same survey showed LGBTQ+ people are also feeling more vulnerable at their job. But if you’re in one or both of these situations, the good news is that there are actions you can take to regain a feeling of control over your finances and your future. Having a plan is the first step to alleviate stress and uncertainty.

How do finances differ for LGBTQ+ relationships and families?

Although same-sex marriage was legalized in Canada in 2005, the right to marry doesn’t mean all things are equal. In Canada, LGBTQ+ couples are more likely to be living in a common-law relationship than their cisgender counterparts. Whether married or in a common-law relationship there are disadvantages typically centred around distribution of property and finances in the event of a breakdown in the relationship or in case of the death of one of the partners. From financial planning to estate planning, there are many aspects to financial wellness that are unique to LGBTQ+ individuals, partnerships and families. Here are some considerations for your individual LGBTQ+ financial planning.

Tips for LGBTQ+ financial planning—How you can protect your future

Hatch a plan 

The first step is to communicate with your partner and both of your extended families to have your wishes known. This is particularly important for LGBTQ+ families; in the case of your death, outside decision-makers could make assumptions that are not aligned with your wishes. Once you and your partner are on the same page with your plan, it’s time to take the next step.

Check what you already have

It’s important to check the fine print on your bank accounts, existing investments and benefits packages through your employer. Ensure the listed beneficiaries are who you want them to be. Some benefit packages offer discounted rates on life, disability or critical illness insurance. This may offer additional security for you or your partner.

The papers you do need 

Common-law couples often view legal marriage as an unnecessary “a piece of paper”. If you and your partner have decided the right decision is not to get that piece of paper, it’s important to have other types of paperwork to both document your plan and ensure your financial wishes can be implemented. Solidifying your wishes with legal documents is the best way to ensure your plans will be implemented. These wishes include establishing a Power of Attorney for both your personal care and your property, in case you become unable to make decisions for yourself. Once you have these documents notarized, it’s a wise idea to let a trusted friend or family member know where they are stored.

Care of children

If you have children, it’s especially important to keep paperwork in order. Canadian law recognizes biological parents by default, and it’s often the case in LGBTQ+ families that only one parent is biologically related to the child. This could mean being diligent with birth certificates or formalizing the parentage through adoption, depending on the law in your province or territory. This not only protects your partner and children, but this can also provide financial security for you in the event of your partner’s death.

Invest in your interests

It’s important to feel good about the values of the companies in which you invest. You may want an investment portfolio including companies who are LGBTQ+-run or LGBTQ+ allies. One of many choices is an index of LGBTQ+-friendly stocks. Your financial security advisor can tell you about more options based on your individual preferences.

LGBTQ+ retirement planning  

Once you have the basics (as listed above) in order, you’ll likely want to think about estate planning and the legacy you want to leave. You may want to leave a portion of your estate to loved ones, a charity that supports LGBTQ+ rights or both.

Choose a trusted advisor

This may mean working with an LGBTQ+ financial planner but could also mean working with an LGBTQ+ ally. Knowledge is power—in financial planning and in life. While there are helpful and informative podcasts, blogs and YouTube channels devoted to LGBTQ+ financial planning, you’ll need to make choices for your unique situation. The right financial security advisor for you is knowledgeable, respectful and will support you in ensuring you have a plan in place for your future.

Contact me today to discuss your needs.