Financial planning for 2SLGBTQI+ families
Canada Life - May 24, 2023
From financial planning to estate planning, there are many aspects to financial wellness that are unique to 2SLGBTQI+ individuals, partnerships and families. Here are some considerations for your individual 2SLGBTQI+ financial planning
While it’s no secret that the last few years have brought stressors to our lives, the uncertainty has not affected everyone equally. A recent survey reported that more than half of 2SLGBTQI+ people are feeling higher stress levels — higher than levels reported by those outside the 2SLGBTQI+ community. The same survey showed 2SLGBTQI+ people are also feeling more vulnerable at their job. But if you’re in one or both of these situations, the good news is that there are actions you can take to regain a feeling of control over your finances and your future. Having a plan is the first step to alleviate stress and uncertainty.
How do finances differ for 2SLGBTQI+ relationships and families?
Although same-sex marriage was legalized in Canada in 2005, the right to marry doesn’t mean all things are equal. In Canada, 2SLGBTQI+ couples are more likely to be living in a common-law relationship than their cisgender counterparts. Whether married or in a common-law relationship there are disadvantages typically centred around distribution of property and finances in the event of a breakdown in the relationship or in case of the death of one of the partners. From financial planning to estate planning, there are many aspects to financial wellness that are unique to 2SLGBTQI+ individuals, partnerships and families. Here are some considerations for your individual 2SLGBTQI+ financial planning.
Tips for 2SLGBTQI+ financial planning — How you can protect your future
Hatch a plan
The first step is to communicate with your partner and both of your extended families to have your wishes known. This is particularly important for 2SLGBTQI+ families; in the case of your death, outside decision-makers could make assumptions that are not aligned with your wishes. Once you and your partner are on the same page with your plan, it’s time to take the next step.
Check what you already have
It’s important to check the fine print on your bank accounts, existing investments and benefits packages through your employer. Ensure the listed beneficiaries are who you want them to be. Some benefit packages offer discounted rates on life, disability or critical illness insurance. This may offer additional security for you or your partner.
The papers you do need
Common-law couples often view legal marriage as an unnecessary “a piece of paper”. If you and your partner have decided the right decision is not to get that piece of paper, it’s important to have other types of paperwork to both document your plan and ensure your financial wishes can be implemented. Solidifying your wishes with legal documents is the best way to ensure your plans will be implemented. These wishes include establishing a Power of Attorney for both your personal care and your property, in case you become unable to make decisions for yourself. Once you have these documents notarized, it’s a wise idea to let a trusted friend or family member know where they are stored.
Care of children
If you have children, it’s especially important to keep paperwork in order. Canadian law recognizes biological parents by default, and it’s often the case in 2SLGBTQI+ families that only one parent is biologically related to the child. This could mean being diligent with birth certificates or formalizing the parentage through adoption, depending on the law in your province or territory. This not only protects your partner and children, but this can also provide financial security for you in the event of your partner’s death.
Invest in your interests
It’s important to feel good about the values of the companies in which you invest. You may want an investment portfolio including companies who are 2SLGBTQI+-run or 2SLGBTQI+ allies. One of many choices is an index of 2SLGBTQI+-friendly stocks. Your financial security advisor can tell you about more options based on your individual preferences.
2SLGBTQI+ retirement planning
Once you have the basics (as listed above) in order, you’ll likely want to think about estate planning and the legacy you want to leave. You may want to leave a portion of your estate to loved ones, a charity that supports 2SLGBTQI+ rights or both.
Choose a trusted advisor
This may mean working with an 2SLGBTQI+ financial planner but could also mean working with an 2SLGBTQI+ ally. Knowledge is power—in financial planning and in life. While there are helpful and informative podcasts, blogs and YouTube channels devoted to 2SLGBTQI+ financial planning, you’ll need to make choices for your unique situation. The right financial security advisor for you is knowledgeable, respectful and will support you in ensuring you have a plan in place for your future.
Contact me today to discuss your needs.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.