The Supreme Court’s Obergefell decision in 2015 marked a historic legal and societal change by legalizing same-sex marriage nationwide. However, members of the LGBTQ+ community continue to face unique challenges with retirement and estate planning. It’s important that LGBTQ+ individuals are aware of these challenges and the steps they can take to help overcome some of them.
Here are a few considerations for LGBTQ+ individuals to keep in mind and discuss with their attorney as they think about their future retirement and estate planning:
Unique aging challenges of the LGBTQ+ community
LGBTQ+ individuals face some significant challenges as they age. This includes unique health problems, privately held biases and social stigma and family structures that might differ from their heterosexual peers and can impact caregiving.
More than a decade of published research indicates that LGBTQ+ seniors consistently report more mental and physical health problems compared to their non-LGBTQ+ counterparts. LGBTQ+ individuals should consider the probability of increased health care and caregiving costs and factor this into their long-term planning.
Establishing a ‘family of choice’
Family structures can be different for LGBTQ+ individuals compared to their heterosexual counterparts, which can make caregiving more complicated. Older LGBTQ+ persons are twice as likely to live alone in their senior years and four times less likely to have adult children to help with caregiving.
Many LGBTQ+ individuals create a “family of choice,” a collection of friends and supportive family members. Individuals can create legal authority for their “family of choice” members to act on their behalf, such as financial and health care powers of attorney. It’s important to consult with a legal professional about these options. LGBTQ+ individuals can also name “family of choice” members as “trusted contacts” with their financial institutions, so the institution has someone to treat as a “financial emergency contact” where there are concerns about wellbeing or abuse.
‘Bulletproofing’ estate planning documents
LGBTQ+ individuals may need to take extra care to create appropriate estate planning documents, even if legally married. It’s crucial to consult with the appropriate legal and tax professionals throughout the estate planning process and to carefully review beneficiary designations and estate planning documents on a regular basis, as well as concerns that may be more applicable to the LGBTQ+ community.
Some individuals may want to consider “bulletproofing” estate planning documents from the attacks of hostile family members. In the absence of valid and enforceable estate planning documents, an unsupportive relative could be deemed a default decision-maker of their estate after their passing.
Act sooner rather than later
It’s a good idea to start planning sooner rather than later. Consider speaking with an estate planning attorney, tax professional and other advisors about your priorities and concerns for the future. You can start taking steps today to help plan for yourself and your loved ones in the years to come.
Stacia Kerlin-Welch is a private client advisor at J.P. Morgan Wealth Management in Ohio.
