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Lesbian, gay, bisexual, and transgender (LGBT) individuals, same-sex couples, and modern families are receiving more acceptance and support than anytime previously, and that’s presenting more opportunities than ever to plan a financial future together, says Holly Hanson, CFP, founder of Harmony Financial Strategies.
The bad news? They may be missing out on important benefits and not even know it. Hanson offers three smart money moves for LGBT couples.
If you are in a committed relationship and legally able to marry, doing so may open the door to a plethora of new options for you and your partner. “Due to the fall of the Defense of Marriage Act alone, there are 1,138 federal laws that afford new protection to the LGBT community,” writes Hanson in her new book, The LGBT and Modern Family Money Manual: Financial Strategies for You & Your Loved Ones.
Hanson enumerates just a few of those:
And these are just the tip of the iceberg.
The rules are changing swiftly, so these couples will want to make sure they are taking advantage of newer benefits, such as Medicare, which is now accepting enrollments for same-sex couples, says Hanson. For example, the Medicare changes specifically include:
There are steps unmarried same-sex couples in a long-term relationship can take to help protect their financial futures. These include creating a domestic partnership agreement which, similar to a prenup, makes provisions for shared or separate property, assets, debt, income, as well as for what would happen to children from the current or previous relationships. You may also want to hold property, such as bank and investment accounts or a home as joint tenants with right of survivorship and/or designate your partner as a beneficiary on those accounts.
Just keep in mind that if your partner has credit problems and you open joint accounts, creditors or collectors may be able to reach those funds (including your portion) in the event of a lawsuit. It’s a good idea for the two of you to review your credit reports and credit scores together before deciding what to merge—and what to keep separate.(You can each check your free annual credit reports and get a free credit report summary from Credit.com to see where you stand. In most cases you won’t be held responsible for your spouse’s individual debts unless you are married and live in a community property state. In those cases, creditors may look to the “community property” to satisfy debts incurred by either spouse after the marriage.
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