Happy Pride from Satovsky Asset Management! This month, as we celebrate diversity, love, and inclusion, we would like to highlight how members of the LGBTQ+ community can achieve their goals and ensure their legacy through financial planning. The following are topics that may require more financial planning, policy review, and partner discussion than they traditionally would for heterosexual people. The four areas to be aware of are healthcare, family planning, retirement, and estate management. Having discussions with a financial advisor and taking the time to thoroughly go over these topics will provide you with a sense of financial security for the long term.
With a range of potential coverages, or the possibility of not having coverage at all, barriers may arise in finding affordable healthcare and medical services. It is important to know if your health insurance will cover all your potential needs, whether that be for gender-affirming medication and procedures, fertility treatments, or any other number of health necessities. It also pays to have savings set aside for any expected or unexpected medical treatment. Without having something set aside for that possibility, medical debt could easily accumulate and leave you in dire financial straits. Reviewing policies and insurance providers to find the best fit for your needs will allow for familiarity and peace of mind in a field that can be stressful and financially draining. Having a firm grasp of your healthcare policy and benefits will alleviate any concerns over potential costs and debts, and allow you to financially prepare for other areas in your life.
There are many questions to ask when it comes to family planning and how that will affect your long-term finances. Will you and your partner get married? If you plan on having children, will you need to save for adoption, IVF, or surrogacy? How will you budget for an expanding family? These questions can cost tens of thousands of dollars, and may take years to adequately plan for. Discussing these points thoroughly with a financial planner can help you prepare for any unexpected costs that may arise, and put you in a position to thrive financially as you plan for your future. Thinking long-term about how family planning and financial planning go hand in hand will give you flexibility when it comes to things like child care, parental leave, and how your wealth will be passed on to the next generation. Another factor to consider is whether you and your partner will get married. Looking at partner benefit eligibility, adoption law, and overall budget are important discussions to have when it comes to this type of financial planning, so make sure you and your partner are on the same page.
One of the more daunting areas of financial planning is retirement, and retirement for those in the LGBTQ+ community may look different. Preparation for this period should start early no matter how you identify, but there may be additional questions to ask about how to best plan for retirement. Make sure to review your social security benefits, keeping in mind which of those your partner may be eligible for. Taking stock of income sources, savings, and budget is imperative in order to be effectively prepared for this stage of life. Another major factor to consider is where you want to retire. Will you be relocating or downsizing? Is your neighborhood inclusive? Are there care facilities nearby? These factors could affect your finances and how you will need to structure your retirement funding, so doing research early on what you want your retirement to look like will allow you to successfully plan for any lifestyle changes that may come.
Estate planning is another area where a number of questions may arise for those in the LGBTQ+ community. A big question to ask yourself is “Who is going to receive your assets?”. If you and your partner are unmarried, your assets may not go to your partner without a well-defined estate plan. This also applies to children that are not natural heirs, which is sometimes the situation with same-sex parents. In both of these cases, and for those without children or a surviving partner, estate planning allows you to ensure that all assets will be passed on to those you wish to receive them. The current estate system isn’t set up for LGBTQ+ families, so make sure to check the legal systems in your state and meet with a financial planner to confirm that all of your financials are in order. Review your records on an annual basis, and make sure you have an estate plan in place so that your assets will be transferred to your designated beneficiaries. A useful tool to keep in mind when planning is a revocable living trust. These trusts can be changed while you are alive, and provide an additional layer of protection that wills do not, as they become irrevocable upon death and are more difficult to be challenged or contested.
While this all may seem daunting, connecting with a financial planner and starting to prepare now will give you peace of mind for any financial hurdles you may encounter in the future. One of the most important things to remember regarding these categories is to consistently review your policies, beneficiaries, and estate plan. You don’t want to be caught in a situation where your assets go to an estranged family member, or find that you don’t have the right healthcare coverage because plans were never updated. When in doubt, consult a financial planner and remember to prepare, review, and save. Happy Pride!