Proudly Plan – Explore Big Sky


Around the world, June is recognized as LGBTQ + (Lesbian, Gay, Bisexual, Transgender and Queer) Pride Month to commemorate a turning point in the history of LGBTQ +. The Stonewall riot occurred in Manhattan, New York, in June 1969 and lasted six days when police clashed with LGBTQ + demonstrators. More recently, on June 26, 2015, the Obergefell Supreme Court decision v. Hodges granted Americans universal matrimonial law, and on June 15, 2020, the Supreme Court granted equal employment protection to the gay and transgender community. So June is obviously a special month for our LBGTQ + family, friends and fellow citizens!

Unfortunately, recent positive decisions have not eliminated all financial planning complications for LGBTQ + couples. While there are now some federal safeguards in place, there are still many states that haven’t introduced benefit equalization or anti-discrimination laws that affect health care, housing, and access to credit. In addition, America has different rules regarding parental rights, adoption, and other family financial planning options.

In addition, more LGBTQ + Americans are nearing retirement. There will be an estimated 6 million LGBTQ + seniors in the US by 2030, and like any other couple, financial and estate planning is essential to ensure this growing community is happy, healthy, and financially prepared for the years to come.

Unmarried LGBTQ + couples should consider a living will or medical order. Those who are not legally married are not given “next-of-kin” status for each other and can even be treated as legally strangers in the event of a medical emergency. If you are unable to work it could mean your significant other being bypassed the hospital and calling a relative instead. In financial matters, a partner could not immediately intervene and manage your money in an emergency without a court order if they did not have a properly issued power of attorney.

Of course, a will is crucial. The absence of such a document can trigger your state’s “standard” distribution plan, which usually directs assets to a legal spouse or, if one does not exist, to your blood heirs. A will is therefore particularly important if you are unmarried and have a personal residence where your partner is to continue to live after your death, or if you have assets without an assignable beneficiary that you would like to leave to a partner.

Bringing assets into a trust can help heirs avoid inheritance and specifically address personal and death tax issues. Designations of beneficiaries on certain assets (e.g. life insurance, pension accounts, etc.) have priority over wills or other instructions. This is why it is so important to carefully examine these beneficiary designations. Always make sure that the title of your assets is correct. For example, a house titled “Community Tenant with Survivor Rights” passes directly to the surviving owner when an owner dies, rather than through your will.

It is important to consider custody issues as state laws regarding parental rights for LGBTQ + couples and access to services vary widely. Some states may require additional adoption procedures if one parent is the birth parent of a child and the other is not. Finally, partnership or partnership agreements and separation plans can help outline financial expectations during the partnership and the division of assets upon termination of the relationship.

One of the advantages of getting married is the avoidance of the so-called “marriage tax penalty”, in which couples who register together pay more than single people at certain higher income levels. Gifts of more than $ 15,000 per year to non-spouses will affect the giver’s lifetime, while married couples have unlimited gifts to one another. Married couples are also guaranteed spouse and surviving dependents’ social insurance benefits, which also apply if you divorce after at least 10 years of marriage. Legal spouses can be covered by their spouse’s employer’s health insurance and other health benefits such as HAS accounts and childcare.

Retirement savings accounts like 401 (k) plans require the spouse to be the beneficiary unless they provide written consent to designate another person. An inheriting spouse can transfer inherited assets to their own IRA and defer required minimum distributions until they are 72 years old. Generally, the SECURE Act requires a non-spouse to inherit an IRA to withdraw all funds within 10 years of the death of the IRA owner.

Military LGBTQ + spouses can be some of the greatest financial beneficiaries of marriage equality, as a legal spouse is entitled to a wide range of military benefits, from survivor pensions to health care to housing. Perhaps the most financially impactful change, however, is the ease of estate planning that allows same-sex married couples to transfer wealth to each other tax-free.

Regardless of your lifestyle choices, race, religion, or socio-economic position, to protect your loved ones and your finances, the best thing to do is to come up with a plan that sets out your desires and names the people you trust to carry them out. You should always turn to legal, accounting, and finance professionals to assist and advise you with your plans. Summer has arrived in southwest Montana so get out there and enjoy the ride!

Scott L. Brown is Co-Founder and Managing Principal of Shore to Summit Wealth Management. His career as an asset manager has spanned more than 25 years and he currently works and lives in Bozeman, MT with his wife and two sons.

Wells Fargo Advisors Financial Network was not involved in the preparation of this report and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the authors and not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. The material has been prepared or distributed for informational purposes only and does not constitute a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Wells Fargo Advisors Financial Network and Shore to Summit Wealth Management are not legal or tax advisors. You should consult your attorney, accountant, and / or estate planner before taking any action.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), a member of the SIPC. Shore to Summit Wealth Management is a separate entity from WFAFN. Shore to Summit Wealth Management is located at 105 E. Oak Street, Unit 1A Bozeman, MT 59715 # 406-219-2900.

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