Financial planners aiming to serve more LGBTQ clients should understand their particular challenges in retirement benefits, estate planning and mental health, an expert said.
Industry professionals and their LGBTQ clients can confront those issues using resources like a presentation last month by Laura LaTourette, the founder of Dahlonega, Georgia-based Family Wealth Management Group, for the Foundation for Financial Planning, a pro bono planning organization. Questions about family status, and government and employee benefits loom large for clients who have only gained the right to marriage and the collection of spousal Social Security benefits in recent years, she noted.
“What I’m seeing is there are quite a few of you that really do want to learn more. So thank you so much for joining us. I do appreciate it,” LaTourette said. “The LGBTQ+ community is growing rapidly, and there’s a significant portion of us approaching retirement age.”
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At least 3 million Americans over 50 identify as LGBTQ today, and the number will expand to about 7 million aged 65 or older by the end of the decade, according to SAGE, an advocacy and service provider group for older LGBTQ adults that runs the National Resource Center on LGBTQ+ Aging. Older LGBTQ people are twice as likely than straight elders to live alone and four times less likely to have children.
They’re among “the oldest folks in our community” as members of the silent generation navigating the fact that it was “illegal to love the one that you love,” LaTourette said. That caused trauma and other mental health problems, as well as “a lot of secrecy and privacy” that continues to the present day, she noted.
Laura LaTourette
“They don’t have children. They were also estranged from families, so they often lived apart from their families. And so they’ve created what we would call formal families, just to make sure that they had some support,” LaTourette said. “They age, the peers all age and then we get into some real disparity. Who’s going to take care of me? Where do I have assisted living to go into? Are they friendly? Do I have to go back in the closet? So there are a lot of issues with our elders in this area when it comes to senior centers, assisted living and long-term care facilities. Isolation is a real problem for us, and isolation causes more mental health issues and financial stress. So some things change and some things don’t.”
In that vein, nearly a decade after the legalization of same-sex marriage, advisors and other wealth management professionals “need to be really sensitive” about the fact that some LGBTQ elders “are still trapped in fear and secrecy” while highlighting the importance of their formal relationship status to their financial well-being, according to LaTourette.
“Many of them don’t understand that there could be Social Security benefits, that there’s definitely a benefit to wealth transfer strategies,” she said. “There’s benefit preferences and how you leave beneficiary money to your significant other if you’re not married. And of course, there are government and corporate benefits. So you really need to talk about this with your clients. You really need to talk about it with the people that you know in our community and make sure that they understand some of those choices and some of those reasons why it might be beneficial to get married. They can do it quietly. If they don’t want a big public event, that’s OK. But also if you understand what some of the issues are and you understand why it would be important, then you would better support them.”
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In terms of claiming decisions for Social Security, the website of the Social Security Administration now gives beneficiaries the ability to use unspecified gender categories and displays information for same-sex couples and transgender Americans.
“So this is really important, I think, to understand why this would be important for one of your clients, if they see themselves in this way,” LaTourette said. “They have some things that we can see are going to be helpful to you to give to your clients. … If you were not able to get married and you were wanting to claim some benefits because you were not able to get married before 2015 and you lived in a state that did not have same-sex marriage benefits, then you could also be able to claim that those now.”
