Weathering retirement and estate planning headwinds facing LGBTQ+ people

Unfortunately, even today, members of LGBTQ+ communities face some significant challenges regarding retirement and estate planning that are not shared by their heterosexual peers. However, there are things members of the communities can do to help ensure their wishes are honored. We break it down.

The background

In 2015, the landmark Supreme Court decision in Obergefell v. Hodges legalized same-sex marriage throughout the United States. While momentous, the decision was not a panacea for the unique and often complex challenges LGBTQ+ individuals face legally, socially and financially.

There are several areas in which especially thoughtful preparation may be helpful for ensuring the wishes of LGBTQ+ persons are honored and that they receive quality care if and when the need arises.

Caregiving

LGBTQ+ individuals are less likely than the general population to have adult children or a significant other who can provide care. Many LGBTQ+ persons rely more heavily on a “family of choice,” which does not offer legal advantages and protections.

What can be done? LGBTQ+ persons should communicate early with their family of choice about their concerns. They should also take advantage of the legal options that are available to them, including financial and health care powers of attorney and HIPAA.

Health care

Receiving quality health care can be challenging for the LGBTQ+ communities without proper planning. Members of the LGBTQ+ community experience higher rates of discrimination in health care settings and mental and physical health complications like depression, cardiovascular disease and HIV. Not only can these factors result in increased health care costs, but they can also lower life expectancy.

What can be done? LGBTQ+ persons should account for significantly increased health care costs in retirement. Additionally, they should start early on building a network of supportive, quality health care providers.

Long-term care may be due

60% of older LBGTQ+ persons are concerned about how they will be treated in long-term care settings. This is likely due to the fact that, unfortunately, public settings such as long-term care facilities typically do not offer nondiscrimination protections for LGBTQ+ persons. This may create additional challenges when seeking potential facilities that will be supportive.

What can be done? Start research early. Begin calling and visiting facilities well before they are needed to ensure there are options handy that will offer a safe, welcoming environment for LGBTQ+ persons.

Estate

Creating a robust, “bulletproof” estate plan can be an important measure for LGBTQ+ persons, as they can experience an added risk of unsupportive family who try to deviate from their plan.

What can be done? Reach out to your legal professionals to create comprehensive documents. For example, include details like “no contest” clauses, medical opinion letters certifying the state of mind of the drafter, and clear beneficiary designations. There is also a range of options available for members of the LGBTQ+ communities without children. Charitable remainder trusts, charitable gift annuities and converting retirement assets into high-quality lifetime annuities are all possibilities.

Currently, there is no comprehensive nondiscrimination federal legislation that protects LGBTQ+ individuals. Further, less than half of U.S. states have such protections in place. With anti-LGBTQ+ activities tripling from 2021 to 2022, it is important for LGBTQ+ people to take precaution when possible to protect themselves, their loved ones and their assets.

Delve deeper (PDF) into how LGBTQ+ people can plan for the important health and financial changes that come with aging.

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