Written by: Finity Group
June 28th is the 55th Anniversary of the Stonewall Riots, the event that has been given credit for the start of the gay liberation movement. Fifty-five years later, LGBTQ+ have come a long way and marriage equality is now the law of the land.
When it comes to marriage, there are many financial items to have in mind to ensure that you are organized and that your financial future is protected. Below are a few steps you can take to help your financial wellbeing as a family.
Pull Together Your Team of Professionals
That list should include any service provider that you may need to help you with your financial security and health care. Most of us should enlist the services of:
- Financial Advisor
- Estate Planning Attorney
- CPA/Accountant
- Property & Casualty Insurance Agent
- Life Insurance Agent
- Investment Advisor
- Banker
- Real Estate Agent
- Mortgage Broker
- Healthcare provider
- Any other professional that may be needed for your specific situation. For example, if you or your spouse is a Resident Alien or are here on a visa, you may want to find an immigration attorney.
If you do not know where to find people to fill your list, ask a good friend, family member or another service professional for a recommendation. Usually, I have found that if you or your likeminded friend have a great working relationship with one professional, they will know other professionals that will be a good match. They might even be able to help you find good people to complete your entire team!
If you are looking to have an initial conversation with a financial advisor, reach out to us and we would be glad to schedule a free initial consultation.
Sit down with each of the professionals on the list above and interview them to make sure they are a good fit. If they are not, then look for another recommendation. Once you have your list together, ask to meet with each one to discuss your needs and concerns.
If you already have existing accounts or policies with any of the professionals listed, be sure to ask them how your marriage may change how these should be structured moving forward.
Have Your Estate Planning Attorney Draw Up Your Will and Advance Healthcare Directives
A will helps to make sure your assets are passed to those you choose when you die and may help prevent your loved ones having to wade through the challenges of probate.
Healthcare directives (also called living wills, healthcare proxy) is a legal document in which a person specifies what actions should be taken if they are no longer able to make decisions for themselves because of illness or incapacity.
These documents are essential if you want to authorize your spouse or a trusted companion to make decisions on your behalf. Many married couples assume that because they are married, they do not need to have these documents, but that is not the case and, unfortunately, same sex couples and couples with different last names sometimes have a tough time convincing health care providers that they have the right to act on their spouse or partner’s behalf.
If you would like more information on the importance of estate planning for families, we have a recent blog post dedicated to this topic.
Audit your Beneficiaries
First, beneficiaries are individuals that are listed by yourself to inherit proceeds from your investment accounts, insurance policies, etc., once you pass away. It is important to constantly review and update your beneficiaries throughout your life, especially once you are married to ensure that these proceeds are going to the people that you want it to go to.
With insurance, there is a concept called “insurable interest.” A person has an insurable interest when a loss would cause that person or their beneficiary to suffer a loss. In the case of life insurance, spouses and family members have an insurable interest in the life of the policy holder. Insurable interest must be present when the policy is first placed in force (purchased) but does not have to be in place when a claim is initiated. So, if, by chance, gay marriage is reversed, if your spouse is listed as the beneficiary, they will receive the death benefit if you die. Likewise, if you have not gotten married yet or met that right person, you can get the policy and have the beneficiary be a family member when you apply. Then, after the policy is placed in force, you can change the beneficiary to your partner.
Likewise, you will want to add or change the beneficiaries for your annuities, retirement accounts (both personal and employer, i.e. 401(k)/403(b), IRA’s, Roth IRA’s, SEP’s). In Washington state and many other states, your spouse must be the beneficiary for your retirement accounts unless they sign away that right. For non-qualified or nonretirement accounts, designating a beneficiary will establish a transfer on death registration (TOD) which allows to account to be transferred to your beneficiary upon your death.
If you or your spouse have a pension, you will want to meet with an advisor to discuss what will happen to the benefits if you and/or your spouse die or become disabled. Most pension plans only pay out to “legal” spouses and challenging that can be a very tedious process.
Make Sure Both of You Can Access Your Accounts
For your property & casualty (home, auto, liability & even pet insurance), make sure both of your names are on the account so that you can both initiate a claim or be covered if you are in an accident. It is best if you personally know and trust your agent so they can help service your account and initiate claims. Likewise, you will want to have your spouse’s name listed on of your utilities and services so that both of you can make changes or call to have the account serviced or canceled.
It is also best to work directly with an agent for your life, disability and long-term care insurance. You will want to introduce your spouse, partner and family to this agent, so they do not wait until there is a claim to meet them. If you are not working with the agent or advisor who sold you the policy, make sure your agent is appointed to service your policy. You may have to fill out a form or send a letter to change the agent. This will allow your agent to contact the insurance company on your behalf or work with you or your family to initiate a claim.
Summary
This list is not exhaustive and it not exclusive to the LGBTQ+. In fact, these tips should be shared with your family and friends and anyone of us who wants to protect their family’s financial future.
We are living in some uncertain times so let’s focus our energy on the things we can do rather than worry about what will happen. One thing we can do is make sure we take care of ourselves and do the things that work for our future regardless of what happens with the changes in the laws.
If you would like to connect to discuss your financial picture in more detail, reach out to us to schedule an initial financial planning meeting.
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