As a result of the June 26, 2015 landmark decision by the U.S. Supreme Court, same-sex marriage is now legal nationwide and financial planners everywhere are wondering what this historical decision means to the financial planning industry.
The legalization of gay marriage in the U.S. encompasses sweeping social change. However, from a fundamental financial planning perspective, there is now little separating a married homosexual couple and a married heterosexual couple. Financial advisors know to guide all married clients through the relevant tax, retirement and estate planning topics – and this will vary from client to client. But that variance comes from financial standing and goals, not gender, race or sexual preference.
Financial advisors should not look at married same-sex couples as a “niche market.” In theory, they now have all the legal rights of any married couple. The greatest financial planning considerations are estate, retirement and tax concerns for newly recognized married LGBT couples and different ways to replace those protective actions for unmarried same-sex couples (think alternative family design planning).
Instead, advisors need to focus on demonstrating sensitivity when advising same-sex couples. Advisors need to be aware of laws that are not currently in place to protect their LGBT clients – married or not – while having the sensitivity to realize that they have likely experienced social biases and have struggled to be recognized as a couple.
According to a recent Pew Research poll, support for same-sex marriage has risen from 37% in 2009 to 57% in May 2015. However, in the 14 states where same-sex marriage is being “imposed,” same-sex couples may continue to struggle to be recognized and to be treated fairly.
Today, there are 31 states that lack clear, non-discrimination protections for LGBT individuals. The lack of specific legislation aimed at actively protecting same-sex couples from discrimination in the areas of employment, private health care, housing and so on could be detrimental to LGBT clients, in particular those who have recently married in one of those 31 states. In addition to added risk planning, financial advisors should continue to stress important financial and estate planning rights such as spousal benefits, healthcare directives and powers of attorney, and approach with clarity.
The best thing an advisor can do for their LGBT clients – and every client for that matter – is help them understand the individual financial planning responsibilities they must put in place to protect themselves and their families.
Elizabeth Liechty is senior partner and founder of Charter Financial Group, Inc. and a registered representative of Lincoln Financial Advisors Corp., a broker-dealer (Member SIPC) and registered investment advisor. Elizabeth holds the professional designation of Accredited Domestic Partnership AdvisorSM (ADPA®), and has been advising same-sex and unmarried couples for 16 years
