Protecting Your Legacy: Estate Planning Essentials for LGBTQ+ Individuals

TPIR Ep 102 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 102 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker 2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the Lgbtq+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of. A retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker 1:
Hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Thanks so much for being a part of the show. As always, I really do appreciate it. This is the show where we talk about Lgbtq+ retirement issues, helping you get to and through retirement with confidence and with pride, of course. I mean, it's in the name of the show after all. Um, I really appreciate you joining me. As I said, whether you're joining me on the podcast and you can get us, yeah, wherever you listen to podcasts or if you're watching us on YouTube, hello there in YouTube land. Appreciate you as well. Uh, we got a lot to get to here on the show. This time around, we're going to talk about protecting your legacy and automating your future. This is kind of part of our sort of spring cleaning, uh, series, little mini series, I guess, here that we're doing in these past couple of episodes because, um, you know, if you caught our last episode, you're already finding your, your path toward optimizing your retirement accounts. That's what we talked about last time. You know, making sure that asset allocation is updated, making sure all of those ducks are in a row, etc.. But this time around, we're going to talk more about that legacy piece and also automating as much as you possibly can. Um, and that's such a great thing that I like to take advantage of.

Speaker 1:
The less I have to think about something, the less brainpower it takes up. Oh boy. Uh, that's, that's great for me because, uh, you know, I don't have a lot to, to use anyway. So. So there you go. Um, do me a favor, if you will like this video, subscribe if you're watching on YouTube. Uh, sign up for notifications. Really would appreciate that. Send the video link out to your friends, your family, your loved ones, your chosen family, whomever is in your life that you could think of that might be, uh, someone who can use this, uh, this information. I really would appreciate that. And that will help really get the word out about all the great things that we are doing with take pride in retirement. The goal here is to start a movement of people really getting ready for their retirement, with pride, controlling the things that they can control, right? So do that. Subscribe wherever you get your podcasts as well. Leave us some nice comments and positive ratings there and also go online to the website. It's take pride in retirement.com. Take pride in retirement.com and you can schedule a free consultation there. We can do it online via Zoom. If you happen to be in the Metro Atlanta area, I've got a couple of offices in metro Atlanta. We can meet in person as well, or you can also go there and get your free copy of an ebook as well.

Speaker 1:
If you click on Get your Plan, there's an ebook called The Smart Retirement Plan. I wrote the afterword for that, and I'm very proud to have been able to do that and been asked to do that, proud and humbled at the same time. And so yeah, that that is another great thing for you to do there on take pride in retirement.com. If you want to give me a call too, you can do that (855) 246-9217. Again (855) 246-9211. Is that number all right. So um I do want to thank by the way, everybody who's reached out who's listened to the show as well. Um, listeners, uh, I think really connected to that last episode, it seems like, uh, talking about 401 S those lost 401 S um, I love helping people, uh, you know, find those and really uncover some money that they may have forgotten about some investments that are literally meant for their retirement that they may have forgotten about. So if you want to do that, if that's something that you would like to, um, you know, to help me, help me help you track down, then do that as well. Take pride in retirement.com. Now today's focus, as I mentioned, estate planning and automation. These two topics really are critical for Lgbtq+ individuals and couples as well, often in ways that, you know, straight folks and cis folks don't have to worry about a lot of the time.

Speaker 1:
So let's, uh, let's get into it here. And a sobering fact, despite the 2015 Supreme Court decision on marriage equality, 62% of Lgbtq+ respondents say that their gender identity or sexual orientation caused them to experience financial challenges. This is from a study, uh, by Mesirow Financial, and many of those challenges relate to estate planning and legal protections. And so today we're going to cover why estate planning is so essential. It's kind of a non-negotiable really, for Lgbtq+ individuals, couples, families of all shapes and sizes. The danger of outdated beneficiary designations. I can't stress that enough. Make sure your beneficiary designations are up to date. Legal protections that every Lgbtq+ person needs, and how to automate your finances for a stress free life, and then a stress free retirement as well. So as we get into the estate planning piece, I want to emphasize again, it's not optional. It's like it's a requirement. It's a mandate for Lgbtq+ folks. Everybody needs estate planning. But I feel like for us, we face unique vulnerabilities when it comes to estate planning. One is, you know, kind of just the legal landscape, the reality of the legal landscape, uh, in, in general, you know, marriage equality is not, um, as, as we've seen from comments from certain Supreme Court justices over the last, uh, you know, year or 2 or 3, not guaranteed in perpetuity. Um, and that is kind of a sobering reality there Many states still allow housing discrimination. Um, 21 states.

Speaker 1:
As a matter of fact, according to sage, uh, USA, biological family members may contest wills. They may contest medical decisions. I've actually seen that happen, um, to, unfortunately to a friend of ours who he, uh, passed and family sort of, you know, contested his wishes and, um, it was not a pretty thing. So that's just, uh, you don't want that to happen. So estate planning, proper estate planning, really, really important unmarried partners, by the way, also have no automatic legal rights. Now, again, I'm going to say, and I've said on previous episodes when we've sort of mentioned estate planning and topics related to that, I'm not an estate planning attorney. Um, I am not offering legal advice here. Um, everything's based on your individual situation. And of course, you should seek the advice of a qualified estate planning attorney. For all of these things, we can actually help you connect with, um, some services that we use and recommend to our clients if you would like. Uh, but unmarried partners do not have automatic legal rights if you're married. Different story. But again, as I said, marriage equality, not a guarantee in perpetuity. Gender identity may not be recognized by all institutions as we have seen that change in the last, uh, you know, a couple of years here. And the numbers really do tell the story. Only 15% of Lgbtq+ individuals say that they have worked with a financial professional who actually understood their specific needs.

Speaker 1:
Investment news reports that. And it's just staggering to me. Only 15% say they've worked with a financial professional who actually understood their specific needs as a member of the Lgbtq+ community. That is the main reason that I do what I do because of that gap that exists, that gap between the number of LGBTQ plus people there who just, you know, flat out exist in in this country and the number of people who've actually gotten help, the help that they need from someone who understands their situation. 62% of Lgbtq+ individuals report experiencing financial discrimination. That's from that same investment news source. And then one third of LGBTQ plus elders live at or below 200% of the federal poverty level, according to sage. Those numbers should be eye opening to all of us. You know, two thirds of the community report financial discrimination, having experienced that one third of elders who are LGBTQ plus are at or close to twice the poverty level. And so there are some essential things that you need to do to make sure that whatever your financial situation. You know, when you you say something like estate planning, obviously people might say, oh, well, I don't have an estate if you like this, if you own this pen that I'm holding in my hand right now, that is your part of your estate. It's something that you own, right? And so that you don't have to own a lot of things to have an estate.

Speaker 1:
If you own anything, you got an estate. Um, so you don't have to be a millionaire or billionaire to have an estate, but there are some essential estate planning documents that you need to have and need to be familiar with. Number one is a will, but not just any will, an updated will, making sure that it's not your life situation hasn't changed since that will had been, uh, you know, put into place making making sure that that is explicitly names your partner in, in that will and or your chosen family in that will. And that can override any sort of default next of kin assumptions there. But you've got to make sure, as I say, life changes, circumstances change. And so you've got to review that every 3 to 5 years or after any major life events, you know, the, uh, if you move, if you get a new job, if, um, there is a death or there is, um, you know, a marriage or anything like that, a child, all of those things, major life events you need to review that will after those types of things. Now trusts are something else that you could think about having as well. You know, if your assets exceed, you know, $100,000 or more than that, you could, uh, look into trusts. There are different kinds. They're revocable, they're irrevocable trusts. Um, and what is right for you, uh, you know, it could be that one is right and one is not.

Speaker 1:
But the main thing with a trust is that it will avoid the probate process because your wishes are set forth in that trust and the assets are, uh, some are transferred, you know, to the trust. And so the trust itself as a legal entity then will, can distribute the assets according to whatever the rules are that you set forth. And that could also, uh, you know, particular different kinds of trusts can keep your affairs private instead of having something, you know, published in the newspaper. And there's a whole probate court process that's taking place and all that stuff that has to be part of the public record. This can help keep your affairs private, and it can't be easily challenged by any family that might be disapproving of you. There are also, um, you know, maybe things like durable power of attorney for your finances that names who can handle your money if you are incapacitated. And that's critical if you're unmarried, especially if you are partnered but not married. You know, hospitals and banks won't recognize a partner automatically. Um, because, you know, maybe you have well, you would usually have a different last name. You would. All of these things. And so that's automatically proof that durable power of attorney for your finances, automatically proof that this person is authorized by you to handle those finances, health care, power of attorney. That's another one. It's sort of like a living will or an advanced directive, which is related to that.

Speaker 1:
But it's a healthcare power of attorney that names somebody who makes medical decisions for you, and it can prevent your biological family or any disapproving family. As I said a moment ago, from overriding your partner's wishes. And it should include HIPAA authorization as well. So that that person who is in charge, who is that power of attorney who holds that power of attorney is, um, you know, authorized to see your medical records and, and all of that stuff. And then, you know, a living will or advance directive, as I mentioned a moment ago, very similar. It states your, um, end of life wishes, those things that would happen if you become incapacitated, become, uh, terminally ill and it removes that burden from your loved one during a crisis. And so think about this, you know, imagine you're in a serious accident, you're unmarried or you're in a state that doesn't recognize your marriage, you go in to this situation without proper documentation. Your estranged parents could come in and start making medical decisions on your behalf, overriding the decisions of your partner. If you're not married to that person, your partner could be barred from your hospital room. Your assets could go to family members who rejected you as part of the probate process, which is a court process. If you don't have, um, you know, all these documents in place, then something happens to you that could go to probate and a judge then decides who gets what.

Speaker 1:
And it's usually based on the blood relations. A lot of the time. And so you don't want family members who rejected you getting those assets. Your partner of 20 years may have no legal standing if that's the case. And it's not, you know, this is not fear mongering. This is these are real life situations that happen regularly in our community. I remember before marriage equality, even though my husband and I were married in the state of New York, we had moved to Florida and he had a kidney stone. It was in terrible, terrible pain. Thankfully, he was conscious when we got to the hospital, otherwise he wouldn't have been able to sign the authorization for me to be able to come back into the emergency room with him. Had he been unconscious, I would have just been banned out to the waiting room and had to wait and see because I wasn't recognized legally as next of kin. And these kinds of things can still happen, especially if you are unmarried. And so you got to have these directives, these wills, the trusts, if that applies to you in your situation, all that in place, we can help you with that. Get you in touch with estate planning attorneys who are reputable, who do not charge you an arm and a leg for these services because you deserve not only a retirement that you can take pride in, but you deserve a legacy that you can take pride in as well.

Speaker 1:
I go to take pride in retirement. That's take pride in retirement. Dot com or call 855246 9211 to get started along that road. And I would encourage you to do that. All right. So beneficiary designations are another big thing. This is also when we're talking about like sort of spring cleaning for your finances, you want to make sure that you take the opportunity to make sure that your beneficiary designations are up to date. And this is something that kind of keeps me up at night as a financial advisor. Beneficiary designations on retirement accounts and life insurance policies will override your will. You know, they say where there's a will, there's a way. Well, where there is a will, there could be a beneficiary designation that if it differs from what is written in the will on a life insurance policy, for example, or on a retirement account that would transfer on death or whatever the situation might be. An investment account could be the same thing. You could have that beneficiary designation. That could be outdated. And that says somebody else. Let's say you were you were partnered or married to someone else years ago, and you just never updated a beneficiary designation on a life insurance policy. Well, what happens if something were to happen to you, even though your will says that your current partner gets or your current spouse gets X, Y, z dollars from the life insurance policy or 100% beneficiary and that kind of thing.

Speaker 1:
The probate court or whomever is going to look at that and say, huh, that doesn't matter, because the life insurance policy itself overrides whatever's in the will, and the insurance policy says something completely different, and you don't want that to happen. So make sure that those beneficiary designations are taken care of and and are updated old beneficiaries, maybe even before your you're coming out. You came out, let's say. You know, you came out long after you got your life insurance policy. And maybe your life insurance policy named those some of those family members as beneficiaries who later rejected you after you came out, but then you've never gotten around to updating those beneficiaries. Well, then something happens to you. They could get that money. It's another scenario naming a trust without proper setup. You know, some people name a trust as a beneficiary, but then they don't actually create the trust sometimes. And so the account will then go to probate. And that just defeats the whole purpose of the trust to begin with. Again, forget about ex-partners. That could be something that, uh, you've forgotten to update over time. Not considering tax implications. I mean, unmarried partners pay estate taxes that married couples don't. And so you've got to have some strategic planning here to avoid that and minimize any, you know, fees and taxes that you might be able to pay or might be forced to pay otherwise.

Speaker 1:
So review these beneficiaries. I mean, pull out every financial statement that you've got. 401 S IRAs, life insurance, bank accounts that are payable on death payable on death designation. Look for that wording. Investment accounts, pension plans, all those things. Verify the current beneficiary on each account. And you've got to look not just at the primary beneficiary but make sure that you look for contingent beneficiaries as well because that can be something that if you're just looking okay, primary beneficiary, here's the person. Okay, yeah, that name looks fine, but they're contingent beneficiaries on there. They could get if the primary beneficiary, uh, has passed or can't be located or, you know, whatever the case might be, that could then pass those contingent beneficiaries. And that could be a big issue. If it's not someone that you want that money to go to, especially, um, and then, you know, those percentages gotta add up to 100% as well. That should go without saying, but I wanted to emphasize that. Update that as needed. As I said earlier on, after a marriage, after a partnership change, after having kids, divorce, separation, the death of a beneficiary, or every 3 to 5 years. As a general rule, just take a look and make sure that everything is nice and up to date. Keep copies of that in a safe place and you and your partner should know where these are. Tell the executor or the trustee where to find them in case something does happen.

Speaker 1:
And if you're unmarried by choice or by circumstance, some some special considerations here don't get you don't get that unlimited marital deduction for estate taxes. So that's that that estate tax piece that I was talking about earlier. And again, I gotta say, you got to work with an estate planner on gifting strategies and life insurance to offset any potential taxes that work with an estate planner, estate planning attorney. And again, we can connect you with those go to take pride in retirement.com take pride in retirement.com. You can schedule a free consultation. It's free of any cost, any obligation or call 85524692118552469211. All right, one more thing to share with you here in the last few minutes before we go, my and I think I maybe I said this in the last episode, I've said it recently. Um, one of my mantras in life work smarter, not harder. And so, you know, after a lifetime of working harder to overcome systemic barriers, uh, in, in life and in finances, retirement should be easier on you. That's kind of the whole goal. And that is also where automation comes in. I love this because first of all, when I the last episode, and if you haven't listened to that, please go back and listen to it because there's a lot of good stuff in there, if I do say so myself. But one of the big things is that you can, if you don't have this, uh, you know, spring cleaning for your finances that that you do.

Speaker 1:
Uh, you could be overly complicating things. Maybe you've got too many accounts spread around and all that kind of stuff and, and all of that. It takes a lot of mental power. It also takes a lot of stress to keep up with it all and all those things. So make sure that everything's organized and all of that. And one of the things that you can do to help with that, automate your bills and your financial accounts to help reduce the stress, reduce the cognitive load, and that frees up time and energy to just enjoy your retirement. I've got, you know, a lot of things automated in my life right now. I have it set where my the mortgage payment is automated each and every month. And so that's one of the things. And just one of them that gets automated. Now you can overdo it. You know, if you've got 14,000 streaming services like most of us do these days, don't you love it that we all we all cut the cord in order to save money? And years ago, because our cable bills are so high. And now that we've cut the cord. Um, I'm almost asking for the cord back because it's like I'm spending more money now on all these different streaming services because those prices have gone up and now I have to watch a certain show. I got to have this service and to watch another one, I got to have this one.

Speaker 1:
It's kind of crazy. So don't overdo it with all the streaming services. Make sure that you're aware of what you have and what you're spending. But you can, you know, those can automate, can be turned on auto pay, utilities, insurance as well as those streaming services. Um, and you know, if you have ongoing things like healthcare costs with hormone therapy and, and all of that kind of thing as an LGBTQ plus person, you know, automate that as well. So that that is taken care of. Sign up for alerts maybe. Um, for any sort of large or unusual changes in those amounts, obviously kind of some of those bills, especially the streaming services and stuff may incrementally go up, but say if something is three times what it was the previous month, make sure you get alerted about that. Also, automate those retirement contributions. Now you've got to keep in mind that there are limits to what you can contribute to your IRA, your 401 K, and that IRA limit applies to both the Roth IRA and a traditional IRA combined. Right? You can do only that amount that combined amount to a traditional or a Roth IRA. And one of this is one of those things that you can kind of set and forget. Like you don't, you can't spend what you don't see. So make sure that those contributions are going out before you even see it in your, in your accounts, write in your checking account or whatever.

Speaker 1:
More than half of LGBTQ plus folks. According to Mercer, more than half of LGBTQ plus folks have less than $10,000 in personal savings. And so if you want to set up something that is like super easy to help build that savings, automate it, automate the contributions to what should be like, you know, your emergency fund, for example, 50 bucks, 100 bucks per paycheck. And that builds up over time. And then you aim for that 6 to 12 months of expenses that we recommend rebalancing those investment accounts. A lot of the, those investment accounts can say, hey, we're going to rebalance on an automatic basis every so often every six months, every year, whatever the case might be. And that keeps your portfolio aligned with your goals without having to go in and actually rebalance yourself. Work with a trusted advisor to help you do this. And this guy right here can help you. Take pride in retirement. Split those bills with your partners. Um, you know, you use apps like maybe split wise or have joint accounts and make sure you've got a clear agreement. Okay. This is where paying this 5050, we're paying that 50, you know, whatever the case might be. And that's especially important for unmarried couples for, you know, just fairness and for record keeping and all of that kind of thing. And simplify your account structure as well.

Speaker 1:
This is one of those things I talked about briefly in the past previous episode. I will briefly mention it here as well. Consolidate accounts into ones that you actively monitor because that not only reduces administrative hassles, like multiple logins and all that kind of thing, and multiple statements that you might get in your email or in the snail mail, all that stuff, but it also makes it easier to see your bigger financial picture. It takes a lot of the stress. Eliminate as much of the stress as you possibly can. I'm all about eliminating the risk that you are taking in your retirement accounts. I'm all about eliminating a lot of the fees as many of the fees as possible. Just minimizing those and the taxes that you are going to have to pay in the future can help you out with tax planning and all of that. I'm also super, super into reducing your stress. So if you want to reduce your stress, give me a call 85524692178552469211 or go to take pride in retirement.com. Well that is going to do it for this time around here on the show. But thank you so much for being a part of things. I really do appreciate it. As always. I will say it every time because I mean it every time. I wouldn't be here without you. So thank you, thank you, thank you from the bottom of my heart. Until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker 2:
Thanks for listening. To Take pride in retirement. Members of the LGBTQ plus community deserve to work with the fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement.com. Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM but are offered in, sold through individually licensed and appointed agents.

Speaker 1:
Information provided is not intended as tax or legal advice and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, please refer to our firm brochure, the ADV Too-a item four for additional information.

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