Staying Financially Secure

With the deadline for filing income taxes just around the corner, it’s a good time for people to look at their finances. For LGBT families, last year’s Supreme Court rulings on the Defense of Marriage Act (DOMA) have brought about a number of changes they should take into careful consideration. For legally married same-sex couples, particularly those living in states that recognize same-sex marriages, they’re now eligible for the same federal benefits and protections that other married couples have enjoyed for years.

Before you get too excited, though, keep in mind that it’s not that easy just yet for same-sex couples. Government agencies are in the process of reviewing and modifying their rules and regulations. Private employers, meanwhile, will also need to review – and potentially revise – their policies, benefits and paperwork.

So what can you do to help protect your financial interests? We checked with Jeremy Reese from Mitman, Reese, and Associates, an Ameriprise Financial Services wealth management practice based in Atlanta, for their advice, and they offered a number of tips. Jeremy specializes in LGBT financial planning, navigating around common challenges faced within the community.

First, know your state’s laws. For our local readers, that means knowing more than the fact that Georgia doesn’t recognize same-sex marriages.

Next, get professional advice. That can include a financial advisor, an estate planning attorney, a Certified Public Accountant, and possibly a family law attorney. Make sure that whoever you hire specializes in the needs of LGBT couples and families – these are complex issues, so you want someone who knows what they’re doing for you.

Once you have professional advice, build a plan that works with your state’s laws. Keep this in mind, particularly if you’re moving – what works in one state may not be effective in another.

So what should you include in your plan? You have a number of things to consider, including estate planning and end-of-life issues. This is where an estate-planning expert comes in to help. For your estate, you’ll want to make sure that your beneficiary information is kept up-to-date so any insurance proceeds, bank accounts and retirement accounts can go to your surviving partner. You’ll also want to make sure any other property is property set up to pass through a trust or held in joint tenancy with rights of survivorship. Your will should be constructed properly to avoid any estate planning disputes. Powers of attorney and healthcare directives should also be set up to let your partner make the appropriate legal, financial and healthcare-related decisions if you can’t. Finally, bring in a family law specialist if children are a part of your family – they can help set up parental rights documentation.

You’ll also want to check on both life and health insurance. Life insurance can help cover costs for a partner in the event of one’s death. Meanwhile, health insurance rates may be better under a combined plan than each partner carrying a separate policy. But in both cases, make sure to check all of the costs, including anything that could be counted as taxable income.

Finally, start putting as much into your retirement savings accounts as possible. Consider diversifying your retirement savings through multiple types of accounts to enjoy the tax benefits later in life. For example, if your workplace 401(k) plan offers a designated Roth account option, you may want to take advantage of it. If not, consider opening a Roth IRA, which offers tax-free income in retirement.

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