The Importance of Comprehensive Wealth Management for Domestic Partners
For gay, lesbian, bisexual, and transgendered individuals, reaching financial goals frequently present unique challenges. You may be aware of some of the issues that can affect you and your loved ones’ financial well being – others may come as a surprise. One thing is clear: when it comes to managing your wealth, it is critical that you understand your options and opportunities – as well as potential obstacles.
If you are in a relationship, the first step is to include your partner. Because many domestic partners maintain separate bank accounts, they feel as though they should plan for the future as individuals. I ask my clients: Do you own your home together? Would you like to pass on a portion of your estate to your partner? If your partner became disabled, would you provide financial support? If the answer to any of these questions is yes, then you may want to evaluate your financial future as a couple.
Disparities in age present another hurdle for domestic partners. Frequently, partners may have a difference of 5, 10, 15 or more years between them. Age affects the way we perceive risk with our investments and how we prepare for retirement. Younger investors are more likely to accept ups and downs in the market as they have a longer time horizon. Additionally, they have more time to accumulate funds for their retirement years. For those who find themselves rapidly approaching retirement or who have already retired, the focus shifts from building for retirement to protecting those assets they have accumulated. Balancing the need to grow with the need to protect can be a daunting task.
Other areas of concern include insurance and estate planning. You should ask yourself several questions: When I pass away, will my partner be entitled to my pension benefits? How can I best protect my partner and myself while I am alive and after I have passed away? As we know, family members do not always look favorably on the relationship and may desire to have your assets for themselves.
Believe it or not, the Tax Code has produced some benefits for domestic partners. Due to the government viewing same-sex couples as individuals, many higher income partners find that they can contribute more to their Roth IRA’s, pay taxes at a lower rate, and have more deductions available to them than a married couple with a similar combined income. Work with your financial planner and your tax advisor to identify each of the areas from which you could benefit.
As many look to grow and protect their wealth, they are turning to comprehensive financial planners. Comprehensive financial planners separate themselves from traditional stockbrokers by providing their clients with thorough investment, retirement, tax, and estate planning strategies while developing a long-term relationship. If you are in the market for a comprehensive financial planner, you will want to work with someone who understands your needs, respects your relationship, and, most importantly, someone you can trust.
This article is for informational purposes only and is not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.
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