OPENERS

Fodder for the Water Cooler

WHY ESTATE PLANNING MATTERS EVEN MORE FOR LGBTQ2S+ CLIENTS

Common-law relationships are very common in the LGBTQ2S+ community, and depending on the province, common-law partners don’t necessarily inherit assets. That, combined with potential family tensions, makes it especially important for advisors to work with LGBTQ2S+ couples to create airtight estate plans.

“Let’s say you’re living together for 20 years and you’re not married and you don’t have any powers of attorney or a will in place. In this situation, it will be a sibling or a parent — whoever is closest of kin — who would then make decisions,” says Ivan Steele, a family and immigration lawyer in Toronto. “In the best-case scenario, if it’s a harmonized family where everyone likes and supports each other, that’s wonderful. But in many situations, that’s not the case. Then you end up with people making decisions for you that should probably be the last people making decisions for you.”

More complexity arises if someone, for example, came out later in life and has children from a previous heterosexual relationship. This, Steele points out, can create competing interests for an estate. A will reduces the potential for conflict and enables people to consciously leave property in the proportion they want to the people they want. Steele adds that children in the current relationship must also be protected by naming a temporary guardian (who will apply for court approval of permanent custody) in case both parents die at the same time.

It’s also essential to do special planning for couples with assets in another country that doesn’t recognize same-sex relationships. Steele stresses, “If you’re dealing with a country that is overtly intolerant or hostile to same-sex couples, you may want to consider, in addition to Canadian wills or estate planning, taking certain measures in those countries to formalize some type of property transfer upon your death.”

EXPRESSING HEALTH AND LONG-TERM CARE WISHES

Advisors have a critical role to play in ensuring their clients have valid wills and powers of attorney, checking in periodically to make sure they stay current, and making sure they’ve received competent legal and tax advice related to their individual circumstances, says Leanne Kaufman, the Toronto-based president and CEO of RBC Royal Trust.

She emphasizes it’s very important for LGBTQ2S+ couples to document their intentions and wishes if they can no longer make decisions about property or personal care. Otherwise, struggles between the family of origin and the family of choice can become contentious and end up in court.

“If you’ve taken the time to create proper documentation through powers of attorney, then your wishes are articulated,

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clear, and legally enforceable,” Kaufman says.

One area LGBTQ2S+ couples should take time to consider, she adds, is care choices if they ever need health support at home or in a facility. “We have heard of concerns in the LGBTQ2S+ community about not feeling confident in being true to who they are in situations where they’re suddenly dependent on others for care or for their living arrangements, and trying to find places and services that they know will respect the choices that they’ve made in the way that they identify.”

Steele says, “My approach is to draft the document which authorizes your spouse or your common-law partner to be your power of attorney and make these medical decisions, and then to also include in that document a very clear statement of wishes and preferences if certain situations occur.”

From Steele’s perspective, estate plan-

DID YOU KNOW?

ning can be empowering for LGBTQ2S+ community members, many of whom have experienced generational trauma and injustice.

“In the past, we did not have much of a choice and the laws were hostile and society was hostile,” he says. “Now, we can in fact do exactly as we please with our lives, with our money, with our families, so there is really no justification to not take responsibility for yourself, for your actions, and for how those actions are going to affect your loved ones in the future.” – Alison

MacAlpine

Opportunity for advisors to provide affluent clients with additional guidance

78%

Respondent has a financial advisor

54%

Respondent has a life insurance policy

42%

Advisor provides strategies to minimize tax burdens using life insurance

36%

Consider reminding clients about the risks of fraud. Close to half (49%) of Canadians report they were recently targeted by fraud, most frequently through:

BRANDING & SOCIAL MEDIA

BY ERIN BURY