Critical Financial Considerations for LGBT Couples at One‐Year Anniversary of Marriage Equality
One year ago, the Supreme Court ruled in favor of marriage equality for same‐sex couples in Obergefell vs. Hodges. The ruling did more than simply give same‐sex couples the ability to pay a visit to City Hall or plan a celebration with family and friends. It has had profound implications for LGBT couples and their ability to care for and protect both themselves and their loved ones. The fight for marriage equality has certainly had a profound impact on my own life.
I came out as a member of the LGBT community as a sophomore at The Ohio State University nearly 21 years ago. I met the man I would later marry during my senior year (although he claims to have forgotten this first encounter). We officially reacquainted in 2006 at a fundraiser for Equality Ohio – an organization created after voters passed a constitutional amendment prohibiting same sex marriage and civil unions. We married in Boston in 2010, and our marriage is now legally recognized in our home state of Ohio. I could never have fathomed this 21 years ago – and certainly never predicted I would one day be married myself, with a legal spouse who’s future I value as much as, if not more than, my own.
BEYOND WEDDING BELLS
Although legal recognition of marriage is a momentous step in enabling a healthy financial partnership, it is critical for LGBT individuals and couples to understand, and regularly reassess, the impact of these regulatory changes. Beyond just an agreement to take out the trash every Tuesday night, marriage comes with legal, insurance and tax implications.
- Powers of Attorney: Are your and your spouse’s wishes known and documented? Although it’s unpleasant to think about, you need to plan ahead for your possible incapacity and death. Generally, it is a good idea to execute both a general durable power of attorney and a durable power of attorney for healthcare, also called a healthcare proxy. A general durable power of attorney will authorize a named individual to act for you in most financial transactions as your agent. A healthcare proxy authorizes the named individual to act on your behalf in all medical and personal need‐type situations.
- Wills & Trusts: Have you updated your will and trust to include your spouse? Whether adults are procrastinating, think it isn’t urgent, or don’t want to think about the inevitable, only 37 percent of LGBTQ Baby Boomers have a will according to a 2010 study on LGBT Baby Boomers. Without a will, assets might be distributed against your wishes. Make sure your will answers the “who” and the “how.” Furthermore, a trust can allow you greater control over how your assets and property are distributed and also to “who” and “when”.
- Saving for Retirement: Are you and your spouse regularly putting money away for retirement? While it might seem far away, it’s crucial to begin saving for retirement as early as possible. Years from now, you and your spouse want to feel financially secure and confident that you’ve saved enough money to maintain your lifestyle in retirement. Look into spousal IRAs, aim to max out your 401k, and work with a financial advisor to identify your retirement goals and craft a path to pursue these with your spouse.
TAKE ADVANTAGE OF THE RIGHTS WE’VE EARNED
I feel incredibly lucky to be a part of the LGBT community. Although there is always more work to be done, we’ve made great progress to demand equality in the workplace, in the military – and of course, in marriage. Beyond the symbolism of marriage, we must also bear in mind the legal advantages that come with this hard‐won right that so many individuals and organizations have fought for. Whether marriage is same‐sex, or between a man and a woman, it is critical to consider the fiduciary privileges a legally recognized marriage affords, so you and your spouse can be prepared for whatever the future may bring.
Things change over time – relationships, family dynamics, priorities, (not to mention marriage laws!) – and financial plans must keep pace. A lot has changed since I married my husband in Massachusetts in 2010. We’ve worked longer, accumulated more wealth and become more charitable, and our financial plans and documents have been adjusted to reflect those changes.
Take the one‐year anniversary of this momentous ruling to check in with your financial professional and attorney – not to mention your spouse or partner – and determine if your financial and estate plans meet your current wishes. We’ve fought so hard to achieve equality, so let’s do all we can to make the most of the benefits.
The TIAA group of companies, including Teachers Insurance and Annuity Association of America, and its employees do not provide legal or tax advice. Please consult your tax or legal advisor to address your specific circumstances