LGBTQ couples face unique financial challenges related to family planning, healthcare, estate planning and more. It is important to have a financial plan in place to help you successfully navigate these challenges and achieve financial freedom. As you work to establish a strong financial foundation, consider implementing the following strategies.
#1 – Family planning
A survey conducted by the Family Equity Council found that 63% of LGBTQ couples plan to use assisted reproductive technology, foster care or adoption to become parents.1 Some of these reproductive methods can cost hundreds of thousands of dollars. For example, the average cost of using a surrogate is between $150,000 to $250,000.2
If you hope to have children, it is important to start planning early. Consider establishing a separate investment or savings account specifically dedicated to saving for family building expenses. A great way to effortlessly build your savings over time is by setting up automatic, direct transfers from your checking account to your savings account. Doing so can help you stay on track with your savings goals over time.
#2 – Estate planning
Proper estate planning is vital for everyone, but it can be even more important for LGBTQ couples — especially those that are not legally married. Not only does an estate plan help ensure your assets are passed along to your designated heirs but it also allows you to authorize trusted individuals to make financial and healthcare decisions on your behalf, should you become incapacitated and unable to make those decisions on your own. A properly executed estate plan can also protect your loved ones’ privacy and minimize their tax exposure.
#3 – Healthcare planning
As an LGBTQ couple, it is important to take additional steps to grant legal authority to make healthcare-related decisions and access medical records on each other’s behalf. A report done by KFF, formerly known as the Kaiser Family Foundation, found that LGBTQ adults are twice as likely to have negative healthcare experiences than their non-LGBTQ counterparts. Given the increased risk for potential mistreatment and discrimination, it is wise to establish the following legal documents:3
- Healthcare power of attorney – This authorizes your partner to make medical decisions on your behalf should you become incapacitated and unable to communicate your preferences.
- Living will – A living will allows you to specify your end-of-life wishes, including what life-sustaining treatments you wish to undergo. Having this document in place can help avoid conflicts among family members.
- HIPAA authorization – The Health Insurance Portability and Accountability Act (HIPAA) established national standards for the protection and privacy of individuals’ health information. While these are important privacy protections, they can make it difficult to access information about a loved one’s medical status. A HIPAA authorization allows you to grant permission for certain individuals to access your medical data.
#4 – Insurance
It is important to take steps to protect and preserve your assets and loved ones from unexpected emergencies. The following insurance policies can help:
- Life insurance –Life insurance can provide an important safety net for any family, and it offers an extra level of protection for LGBTQ couples in cases where legal protections are limited.
- Long-term care insurance – It is important to consider whether it makes sense to implement a long-term care insurance policy, which can help pay for the costs of long-term care regardless of your marital status.
- Health insurance – Under provisions of the Affordable Care Act (ACA), married same-sex couples have the same rights to spousal health insurance coverage as opposite-sex couples. And insurance companies are prohibited from denying coverage or charging higher premiums based on an individual’s sexual orientation or gender identity.
If you are a member of the LGBTQ community who could use some help implementing these financial planning strategies, we would love to have a conversation. To learn more, please contact us.
- https://familyequality.org/wp-content/uploads/2019/02/LGBTQ-Family-Building-Study_Jan2019-1.pdf
- https://www.cnbc.com/2023/06/23/gay-male-couples-face-more-challenges-higher-costs-to-start-a-family.html
- https://www.nbcnews.com/nbc-out/out-health-and-wellness/1-3-lgbtq-adults-say-ve-treated-unfairly-health-care-provider-rcna146310
