merging finances as a couple

The Gender Spectrum Collection/Broadly

Quick notes:

  • Some states began to allow same-sex marriage in 2004, but the lack of federal recognition created gray areas in same-sex couple financial planning.
  • Elimination of U.S. same-sex marriage bans in 2015 helped, but some financial planning areas remain difficult.
  • There are benefits to using a financial planner that understands same-sex couple needs.

“This is a man’s world,” James Brown once sang. This is also a cisgender, heterosexual (cis-het for short) world — even when it comes to money. Much progress has been made since allowing same-sex marriage nationwide, but the U.S. economic structure still negatively impacts the lesbian, gay, and bi community in some major ways.

Another quick note: This article explores financial planning issues related to the L,G,B,Q of the LGBTQ+ acronym. Money issues for the transgender community are unique and can be complicated, thus warranting its own article. Stay tuned!

There’s always room for improvement

Financial planning challenges were especially difficult for more than a decade due to the evolving adoption of same-sex marriage, says Stuart Armstrong II, a certified financial planner with Centinel Financial Group, LLC in Needham Heights, Massachusetts.

Some states began to allow same-sex marriage in 2004 despite no nationwide recognition. That still created a lot of gray areas when it came to same-sex couples’ financial planning.

Stuart ArmstrongStuart Armstrong
Courtesy of Stuart Armstrong

“It was almost easier before marriage equality existed anywhere because the LGBTQ community knew what they had to do,” says Armstrong. “They were considered legal strangers, so they had to put together their planning with that awareness.”

Financial planning became less complicated when the U.S. Supreme Court made same-sex marriage legal in all 50 states in 2015’s Obergefell v. Hodges.

Armstrong says there are areas of same-sex finances that could use improvement. Some of these include couples unaware of marriage’s advantages, discrimination incidents, and the huge costs of family planning.

Some couples are unaware of marriage’s financial advantages

Armstrong says he has some couples as clients that have been together but are unmarried. Of course, they might have not had the choice until 2004 (or even 2015, depending on their state), but still choose not to walk down the aisle despite marriage equality.

I’m not here to pressure y’all into marriage (that’s your nagging mother Nance’s job), but there are benefits to tying the knot if you’re in it for the long run. First of all — it’s gloomy to think about, but bear with me — if your partner passes, you might not have the option to inherit their assets, IRA, and property if you’re unwed. OK, let’s stop thinking about that now…

Discrimination happens with more than wedding cakes

There’s been progress in terms of reducing discrimination, but there’s still a lack of protections that can impact LGBTQ+ couples’ financial stability. For instance, the lack of job protection at a federal level means an employer might be able to easily sack an employee due to their identity.

“Job protections are only afforded in roughly about a third of the states,” says Armstrong. “If (someone) decided to put their spouse on employee benefits for health insurance (at) work … that would essentially be outing themselves at that employer.”

Of course, discrimination happens in other sectors too — perhaps the most visible being bakeries refusing to make wedding cakes for same-sex couples. Denial of services in this realm does have financial implications.

LGBTQ+ community
LGBTQ+ community
Zackary Drucker/Zackary Drucker

In addition, housing has a huge potential for discrimination, says Armstrong. Gay and lesbian couples might spend more on housing-related costs if legal representation is hired.

Straight, cisgender couples save a lot more money on this

I won’t go into the details as this is a family-friendly website, but cis-het couples typically spend a lot less bringing a child into the world (if you don’t know what I mean, ask your mom about the birds and the bees). Of course, there are some that need or choose to use IVF, IUI, surrogates, or adoption services, but same-sex couples are more likely to use these services — which are expensive.

In addition, queer couples may also find their adoption resources limited. If a country criminalizes homosexuality, they may ban a couple from adopting from their orphanages. A cis-het couple is less likely to run into this issue.

Nancy podcast’sQueer Money Matters” project explores the costs and complications when it comes to queer couples having a child. With their partnership with polling firm Morning Consult, Nancy producers found 57% of queer respondents don’t have kids, compared to 36% of straight respondents. For those interested in having kids, 32% of queer respondents and 29% of cis-het respondents were “very concerned” about finances.

When you’re a jet-setting couple …

Planning can get a little tricky when it comes to estates and choosing a place to live that’s fair to unmarried and married same-sex couples.

LGBTQ+ community
LGBTQ+ community
Max Pixel

A lot of people, especially same-sex couples, are becoming jet-setting cool folks — the gig economy, remote work, and rise of Airbnbs are possible causes. Because same-sex couples are less likely to have children than cis-het couples, they’re more likely to be more mobile, says Angela Giampolo, a Philadelphia-based lawyer specializing in LGBT law and more.

Giampolo recommends couples understand how the laws in different countries — and states — impact unmarried same-sex couples in terms of estate planning and taxes. Whether or not your new home has protections against discrimination is also important.

“If there’s anything that you can do or negotiate in order to protect yourself, the onus is really on you,” says Giampolo. “No one will be researching the laws between the country unless you hire an attorney to do so … You really have to be proactive because you’re choosing to move into one of these difficult situations.”

Customers should go to companies that get them

Just like you wouldn’t go to a lawyer that specializes in maritime law for your fraud case (see the Bluths’ lawyer Bob Loblaw in Arrested Development), you shouldn’t see a finance professional that doesn’t understand same-sex couple needs.

Armstrong recommends that clients ask questions of their financial planner to make sure their potential firm can service them properly. He also advises firms to think deeply about their target clients as well.

LGBTQ+ community
LGBTQ+ community
Zackary Drucker/The Gender Spectrum Collection

“It’s always optimal for a financial planning firm to figure out what their target focus for the kinds of clients are that they feel they can best serve,” says Armstrong. “It can be a disservice for any client to be taken on by a firm that doesn’t really have a lot of experience with that particular kind of client.”

While we’re glad you seek Finance 101 out for financial inspiration, it’s important that you seek help from a certified financial planner for major money decisions.

A deeper dive — Related reading on the 101:

Most of us groan when we’re at the DMV — imagine having to undergo surgery just to update your driver’s license!

The ’20s were more than just the setting for The Great Gatsby.

Learn more about the “I” in LGBTQIA+.