Mind the Gap(s)! Financial Planning as a LGBTQIA+ Couple

In the start of this new year and new administration, many LGBTQ+ investors are wondering what the future holds. In this time of uncertainty, it might be the perfect time for LGBTQ+ couples to ensure their financial world is current, accurate, and best serving.

Without federal protections ensuring equal rights to those in the LGBTQ+ community, a majority of states can terminate employment or refuse services based on sexuality, in addition to many other outdated laws still on the books in 2025 (with potentially more coming). All of this has the capacity to interfere with an LGBTQ+ couple’s pursuit of happiness and financial well-being over the long-term. In addition to the regular planning advice given to clients, we offer some additional considerations.

Workplace Planning

Being an LGBTQ+ employee can bring its own challenges. Diversity, Equity, and Inclusion initiatives are being slashed from many workplaces across the country [1,2], which can leave underrepresented and marginalized people feeling more vulnerable. Unfortunately, there are no laws at the federal level protecting anyone from being fired for their sexual orientation. These protections (if they exist) are at the state level, and not all 50 states are aligned. In fact, there are 28 states [3] where one can be fired based on sexual orientation.

On average, LGBTQ+ workers earn less than their cis heterosexual counterparts. [4] LGBTQ+ employees may need additional emergency savings or other protections to cover the gap should job security be in jeopardy. Be sure to also review coverage for medical insurance, life insurance, and any other employee benefits that may extend to both spouses and children.

Trans workers in particular may wish to take extra financial precautions to feel secure at work. With potential barriers to finding the right employment or with the limitations of health insurance plans offered to employees, as well as being statistically more likely to be discriminated against in the workplace, trans workers may find they feel more secure with a larger emergency savings. [5,6].

Retirement Planning

LGBTQ+ couples need to understand their rights and decide together how to position themselves to protect their job, money, and family. Pension and Social Security benefits often are only available to married spouses — so unless their union is recognized by the government, couples could lose out on benefits even if they’ve been together for decades. Considering that women couldn’t have their own credit cards largely until the 1970s, or that the AIDS crisis impacted many gay men’s ability and optimism to save for the long term or retirement in the 80s and 90s, or that gay marriage was sporadically passed in various states over time until the federal recognition in 2015, the queer community has always faced financial barriers that slowed or inhibited the opportunities to save. Where possible, LGBTQ+ workers should always try to save for retirement, taking advantage of employer matches, and securing long-term growth for retirement funds.

Family Planning

Growing a family as a non-heterosexual couple can get very expensive, and the options and accessibility available can dramatically vary by state. Especially as reproductive freedoms are being debated and restricted across the country, a couple might consider moving to a state (even temporarily), where the health insurance and local care will provide more adequate aid and resources. Additionally, those considering adoption or surrogacy may run into similar obstacles depending on whether they utilize a public or private adoption agency, as some states even prohibit same-sex couples from adopting. Once a child is born, a couple should investigate the legal steps to ensure that both parents are legally and equally recognized (if desired).

You can read more details about growing an LGBTQ+ family here: https://www.coldstream.com/insights/financial-considerations-for-lgbtq-family-planning/

Estate Planning

Lastly, LGBTQ+ individuals should pay special attention to the organization of their estates. If left to probate, the court will be the entity to interpret your wishes and the meaning of “family” for your estate. This is another area to consider particularly if spouses are not married, as taxation and assumed rights are greatly impacted by federal estate rules and protections. That said, it is recommended that even married couples draft specific documents allowing such things as being able to make medical or financial decisions when a partner is incapacitated. Drafting appropriate estate documents, being very clear how your estate should be distributed, and naming specific beneficiaries on accounts in conjunction with your financial plan can help those left behind maintain financial security over the long term.

Nothing is guaranteed with the current political environment, and you want your estate plan to reflect your wishes regardless of whatever legislation or judicial findings are enacted. You can refer to this article for a more in-depth explanation: https://www.coldstream.com/insights/diversified-estate-planning-for-lgbtq-families/

Main Takeaways:

• Understand your benefits as they relate to your particular situation before accepting a job.
• Research future employers and know the benefits and environment of your current employer.
• Start saving for your retirement now.
• Know your legal rights – especially state and local laws that could protect you and your partner.
• Make sure your wills and other estate documents are up to date and the beneficiaries and legal powers of attorney are clear.
• Bring your concerns to your Coldstream team so we can build security and protection into your financial plan.

[1] https://www.forbes.com/sites/conormurray/2025/02/13/jamie-dimon-reportedly-says-hell-cut-some-stupid-dei-costs-at-jpmorgan-chase-here-are-all-the-companies-rolling-back-dei/
[2] https://www.aclu.org/trump-on-dei-and-anti-discrimination-law

[3] https://www.lgbtmap.org/equality-maps/non_discrimination_laws

[4] https://www.hrc.org/press-releases/human-rights-campaign-foundation-releases-new-data-on-the-lgbtq-wage-gap

[5] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/being-transgender-at-work

[6] https://williamsinstitute.law.ucla.edu/press/trans-workplace-press-release/#:~:text=Recent%20Experiences%20of%20Discrimination%20and,and%2029%25%20of%20nonbinary%20employees.

*All of Coldstream’s staff shall attain the required licenses and designations necessary for their position. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and Certified Financial Planner™ in the U.S.