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Piggy bank with LGBTQ flag
When asked “what is financial planning?” Northwestern Mutual (NWM) financial advisor Gina Pagan has a simple answer, “Financial planning, at its core, is having a plan around whatever life what might throw at you for the financial foundation, managing risk and taking advantage of opportunities.” That may seem cut and dried for most, but Pagan also mentioned a hitch. While some of the basics of financial planning, such as creating a budget, maintaining a saving account or an emergency fund, are true and universal for everyone, for LGBTQ planning there are nuances.
The unfortunate reality is that LGBTQ people have experienced the pitfalls of not having legal protections for their estates. The early years of the HIV/AIDS pandemic proved just how necessary those protections are. Many of those who died were in the prime of life when a financial plan seemed a matter of concern for senior citizens, not for the young and healthy. However, as AIDS deaths mounted, without any legal documentation to direct inheritance of estates, long estranged parents and siblings swept in and seized homes and assets. In their wake, they ignored the deceased’s intentions for the dispersal of their wealth and property, often leaving their long-term companions homeless and destitute even if the couple’s finances were intertwined.
The lesson now learned, the logical recourse was to create legally binding documentation, like powers-of-attorney and wills, to ensure assets were protected. Eventually, marriage equality would provide the same financial structures for LGBTQ couples as for everyone else. Still, for unmarried couples and individuals, or even those in marriages, the threat of interventions by outsiders and long probate cases remains a scary reality. Through living wills, health care directives and other financial plan provides protection when facing such a threat, making sure estates go to partners or intended beneficiaries and avoiding going to probate.
Marriage Equality Threatened?
Besides, given the state of the nation’s politics and the very real possibility the Supreme Court could rescind the its 2015 Obergefell ruling that paved the way for nationally recognized marriage equality. Such a decision would turn the matter back over to individual states, some of which, like Wisconsin, have a constitutional definition of marriage as being between one man and one woman. It is also possible that under a future Republican majority Congress the right of same sex couples to marry might be outlawed altogether. In that case, consequential financial planning becomes the Plan B to preserve LGBTQ couples estates.
Long on the forefront of LGBTQ inclusion, NWM has doubled down on initiatives addressing these community’s specific needs. A community member herself, Pagan notes the positive benefits of LGBTQ specific financial planning beyond the worst-case scenarios. She notes the value of finding someone within the community to work with. “The most important thing is to interview the person to see if they value and appreciate you. This is important stuff. It’s emotional. The conversation must be with someone who hears you. Who understands and appreciates the challenges. It’s helpful if they identify as LGBTQ. Society is moving in the right the direction, but an LGBTQ advisor is someone with whom you can feel safe,” Pagan said.
Beyond the basics, she also notes other needs specific to LGBTQ families and, in particular, the trans community. Pagan mentioned her experience with NWM, “our financial advisors are members of the community and understand the nuances and challenges of LGBTQ estate planning. “That equips us with the tools and to have conversations safe and heard. Sitting down with clients to talk about children in an adoption process, top surgery costs, especially when there is no biological family to lean on, we can provide them the sensitivity and awareness that is necessary, especially with the community that has otherwise had negative experiences,” Pagan said.
But whether with NWM or another financial planner Pagan reiterates the need for cultural competency as key. For example, a financial planner who simply indicates pronoun preference in their signature indicates their awareness of LGBTQ sensitivities. “Find an advisor you feel safe with, someone who shares your values. People forget you can test various advisors and find the fit and comfort level for you. Navigating the comfort level is personal, but the right person is out there for everyone,” Pagan said, adding, “there are resources on-line for broker information and credentials to confirm their fiduciary responsibility and that they are bound to act in their client’s best interest. “
Asked when one should begin to plan financially, Pagan mentioned her college aged clients, replying “As early as possible—sooner rather than later. The important thing is having a plan, whatever life stage you’re in. Older clients find themselves playing catch up. As goals change, and life changes, the conversation is different. You don’t have to be rich. Everyone deserves a financial plan.”
Of course, there are costs involved. These depend on the type of service rendered. “There are different models. Some are fee based or subscription. Others are compensated by commission based on investment strategies according to the planner’s recommendations. There’s a model for everyone. The initial consultation is usually at no cost,” Pagan said.
Visit NWM’s website, northwesternmutual./financial-planning/ for information and hit “Schedule an appointment” to meet a financial advisor. Gina Pagan may be contacted at ginapagan.nm.com.
