Financial planning is a crucial aspect of building a secure future for everyone. For members of the LGBTQ+ community, navigating financial decisions often involves unique challenges and considerations that sometimes require specialized planning strategies.
From legal complexities and institutional discrimination to the costs of family building and ensuring healthcare access, proactive planning is key to achieving financial stability and protecting yourself and your loved ones.
As a local LGBTQ-owned financial planning company, we are committed to helping all individuals and couples achieve their financial goals. This guide explores some essential financial strategies tailored to the unique landscape faced by LGBTQ+ individuals and families to help secure their financial future.
While financial planning is universally important, LGBTQ+ individuals often encounter distinct obstacles.
Studies indicate that LGBTQ+ individuals tend to have lower retirement savings and lower rates of homeownership, relative to the general population. This can be influenced by factors such as wage gaps, workplace discrimination impacting income and career advancement, and sometimes a lack of family support or inheritance.
Shifting policies and laws around marriage, gender identity, and parental rights make careful estate planning a necessity.
The path to starting or growing a family can involve significant expenses for same-sex couples relative to straight couples. If the vision of your life includes becoming a parent, you will need to think through financial planning for adoption, surrogacy, or fertility treatments.
Access to necessary healthcare, including gender-affirming care and HIV-related treatments, and challenges with employer-provided healthcare benefits require special attention for LGBTQ+ people.
Proper estate planning is essential for financial security and for protecting LGBTQ+ families from legal uncertainties — even for couples who are legally married. Without a proper estate plan, state laws — rather than your stated wishes — may determine several crucial aspects of your life — from who actually inherits your property and assets to who can visit you at the hospital if you fall ill.
To help strengthen your estate plan and make sure it aligns with your wishes, consider these key documents and topics:
Your Last Will & Testament and associated trust documents (if applicable) dictate how your assets and property are distributed and controlled after your death. Having these documents in place helps protect your loved ones and avoid potential legal disputes.
Trusts can help protect estates from probate. Prior to the legalization of gay marriage, revocable living trusts were historically used to recreate some legal marriage protections. Your Last Will & Testament will also name guardianship for any of your minor children.
Beneficiary designations on your financial accounts — such as retirement and investment accounts — and your life insurance policies specify who will receive assets and/or benefit payouts when you pass away. We help all our clients establish, review, and update their beneficiaries on a regular basis to ensure they reflect their current wishes.
Establishing a durable power of attorney gives you the ability to designate trusted individuals to make financial decisions on your behalf if you become incapacitated. This is especially important for unmarried couples. Consider a specific power of attorney to dispose of remains, as this ability typically goes to a spouse, which could be an issue if a relationship isn't legally recognized.
An Advance Healthcare Directive (sometimes referred to as a Living Will) is a legal document that outlines your wishes regarding medical treatment, and designates someone to make medical decisions (such as "do not resuscitate" orders) if you become incapacitated. This gives you the power to name this person — rather than it defaulting to a biological relative.
A Hospital Visitation Authorization Form is a document specifying who is allowed to visit you in the hospital and is incredibly important, especially for unmarried partners or while traveling internationally to a country where your spousal relationship may not be legally recognized.
Ensure legal parentage is established through legal confirmed adoptions, a court judgment of parentage, pre-birth/post-birth orders, or other appropriate guardianship documents.
Here are some additional considerations to explore to help make your estate plan more airtight:
Some attorneys recommend avoiding the term "spouse" in legal documents in case marriage recognition changes. As an alternative, consider using specific names to clearly identify beneficiaries or decision-makers.
Finally, it’s important to remember that LGBTQ+ individuals often define family more broadly, including close friends. Ensure your estate plan reflects your wishes regarding your chosen family. Documenting caregiving arrangements with non-family members is vital.
LGBTQ+ individuals without children or other specific beneficiaries might explore tax-advantaged strategies benefiting charities. Many LGBTQ+ adults feel a deep commitment to giving back to the community and often include charitable giving and bequests to chosen family (friends) in their estate plans.
Ultimately, your specific estate planning needs will depend upon your financial situation and your personal values and wishes. We recommend working with a trusted estate attorney when formulating your legal estate plan.
Lastly, an estate plan is only as good as it is current. We recommend regularly reviewing your complete estate plan to make sure your documents, beneficiaries, and other important items are up to date and reflect your current situation and wishes.
While same-sex marriage is legally recognized across the U.S. today, many LGBTQ+ couples choose to maintain domestic partnerships rather than marriage. And even though legal marriage offers some protections, it isn’t the right fit for everyone’s relationship.
If you are in a committed relationship but not legally married, there are some additional steps you may consider to protect your partner.
Starting a family is a deeply cherished goal for many LGBTQ+ individuals and couples. There are different pathways to parenthood, and the costs associated with family-building methods can vary widely. These costs are typically much greater than those faced by most heterosexual couples, creating a unique financial burden for LGBTQ+ people that could impact long-term wealth building and retirement planning.
Here are some of the most common pathways to family building for LGBTQ+ individuals and the estimated costs of each.
Costs for adoption can range from minimal (foster care adoption) to substantial, such as private agency adoption ($30,000 - $60,000+) and international adoption ($20,000 - $50,000+).
Working with an egg donor and/or third-party gestational carrier can be the most expensive pathway to parenthood, potentially ranging from $80,000 to over $200,000. Some of the most significant costs include medical treatment and procedures, egg donor compensation, surrogate compensation, agency fees, and legal fees.
Intrauterine Insemination (IUI) may cost $250–$4,000 per cycle, while In Vitro Fertilization (IVF) and Reciprocal IVF can range from $13,500 to $23,000. Multiple rounds are often required, which can significantly increase and complicate costs.
As you can see, the costs for family planning can be significant. Many people don’t have the means to save the full amount on their own prior to starting their journey to parenthood. The good news is that there are some financing options available. The right one for you will depend on your specific situation, but some common ones to consider include:
Legal planning is crucial when building an LGBTQ+ family. Documents like confirmatory adoptions or second-parent adoptions are highly recommended to establish parental rights legally, as being listed on a birth certificate alone may not be sufficient in a shifting legal and political climate. Pre-birth orders and post-birth guardianship documents can also be beneficial.
Most reputable surrogacy agencies will help you identify the right legal counsel to ensure all the legal documentation is considered and organized based on your jurisdiction. If you decide to navigate your journey without a surrogacy agency (potentially to save on costs!), do your due diligence to find a trusted legal partner who specializes in your preferred pathway to parenthood.
Insurance planning for LGBTQ+ individuals may present unique challenges, particularly regarding health, life, and long-term care coverage.
Healthcare can be particularly expensive and challenging for LGBTQ+ individuals. Carefully check plan formularies for coverage of gender-affirming care, HIV medications, and other necessary, LGBTQ-friendly treatments.
Costs for medications, especially for HIV, can be very high without adequate coverage. Using manufacturer coupons can also help reduce costs for name-brand drugs.
Life insurance helps ensure financial protection for loved ones who rely on your income in the event of your premature passing and is something everyone should consider as part of their long-term financial and estate plan.
Often, life insurance can be more difficult and challenging to navigate for people living with HIV. It is possible to obtain term life policies if you have an undetectable viral load, although premiums may be higher. Group life insurance through employers or professional associations can also be an option to consider. It is important for those living with HIV to ensure existing coverage does not lapse, as it may be difficult to replace.
Planning for potential long-term care needs is especially important for LGBTQ+ individuals who choose not to have children. Finding supportive and non-discriminatory long-term care settings requires careful research and vetting. Individuals and couples who do not have children should ensure their wishes regarding long-term care are laid out in their estate documents. In addition, long-term care insurance policies should be evaluated to ensure that care at a quality facility remains within reach.
Transgender individuals face specific financial and legal obstacles that must be carefully considered and navigated, including:
Securing your future through retirement planning is vital for everyone, and LGBTQ+ individuals should be particularly diligent due to the potential for lower savings. Here are some different things to consider when saving for and mapping out your retirement.
If you have an employer-sponsored retirement account, such as a 401(k), make sure you’re contributing enough to get the full employer match. Otherwise, you’re leaving “free” money on the table. Take the extra step to ensure your spouse or partner is named as a beneficiary for pensions and retirement accounts, if that aligns with your wishes.
Social Security can be somewhat of a maze to navigate, especially when it comes to spousal and survivor benefits. Take the time to understand how Social Security benefits apply to your relationship, especially if you were in a domestic partnership before marriage equality. Married LGBTQ+ couples now generally have full access to spousal and survivor benefits.
Planning for potential long-term care needs is critical, especially for those without adult children to either provide or help identify proper caregiving support. We recommend actively researching and vetting long-term care facilities for non-discrimination policies well before the need arises.
The complexities of financial planning for the LGBTQ+ community underscore the importance of selecting a financial advisory team that is not only competent but also deeply understanding and supportive of LGBTQ+ issues. Finding a financial advisor who is both knowledgeable and affirming is essential.
If you’re an LGBTQ+ person or couple looking for a financial advisor, we recommend that you:
Navigating financial planning as an LGBTQ+ individual or couple requires a thoughtful, holistic, and proactive approach. By understanding the unique challenges and opportunities you face, you can take control of your financial well-being.
LGBTQ+ financial and estate planning is about more than just money—it’s about protecting your rights, your relationships, and your future. Financial planning for LGBTQ+ people requires a deep understanding of many interconnected factors, including legal, social, and economic factors.
Developing specialized strategies for family planning costs, comprehensive estate planning, appropriate insurance coverages, and retirement savings will provide peace of mind and help you build a secure and fulfilling financial future.
You don’t have to navigate this alone. Partnering with a trusted advisor who is experienced and understands the unique challenges faced by LGBTQ+ people can make a significant difference in achieving your desired financial outcomes.
At Fully, we work thoughtfully and diligently to create a welcoming, inclusive, safe, and nonjudgmental environment for our clients. As a proudly LGBTQ-owned and operated financial planning firm, we understand firsthand the unique considerations our community faces, and we are here to support you in all areas of your financial life and celebrate you throughout your journey.
If you're looking for a trusted financial partner and would like to discuss your specific situation with our team, we hope you’ll reach out and connect with us or schedule an introductory consultation with our team.
Fully Financial is a registered investment advisor offering advisory services in the State of Georgia, the State of Louisiana, and in other jurisdictions where exempt. This article is provided for educational, general information, and illustration purposes only and does not constitute specific investment advice. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. We encourage you to consult a professional financial planner, accountant, and/or legal counsel for advice specific to your situation.
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