Wells Fargo Advisors LGBT Insight: Domestic Partnership Financial Checklist

In the latest installment of a monthly series, Wells Fargo Advisors' Jason McDonald outlines steps for same-gender couples to get their finances and estates in order.

Jason McDonald, Accredited Domestic Partnership Advisor and Vice President – Investment Officer, Wells Fargo Advisors, addresses the unique financial challenges faced by same-gender partners. This is the second article in a continuing series.


In last month's column, we explained why investment planning for same-sex couples is often more complicated than it is for heterosexual couples. The complexities and unique circumstances may seem daunting, but they don't have to be insurmountable. This checklist is a great way to get started.

Select Advisers Familiar With the Issues

"Gay friendly" is no longer sufficient. Seek out advisers, attorneys and other professionals who fully understand the unique planning requirements for LGBT couples.

Execute a Healthcare Proxy and a Directive to Physicians

A new client recently told me a story about being unable to see a partner who was hospitalized, since only "immediate family members" were allowed in. A healthcare proxy designates an agent (e.g., your partner) to make medical decisions for you in the event of your incapacity. In addition, a living will outlines your wishes with regard to feeding and other end-of-life decisions.

Create Your Investment and Estate Plans—Together

When assessing your financial future, you and your partner should discuss financial values, priorities and goals. A plan can help with long-term financial goals, determining how to save for major purchases, and laying out your paths to retirement. It can also help you address those difficult "what if" questions.

Execute a Will

Careful estate planning for same-sex partners is a must. You should be specific, clear and precise in making your wishes known. In most states, if you die without a will, your estate is distributed to your legal heirs, commonly known as your "next of kin." Lacking a will, the identity of your heirs is determined by law, not by you. A will and/or a trust specifying your intentions can help ensure your assets transfer to your partner if you so choose.

Be Precise With Beneficiary Designations

Instead of leaving it to state laws to identify your legal heirs, your will should list the identities of your beneficiaries by name. Many of your assets, such as life insurance, 401(k) plans and IRAs, are transferred outside the will and are not subject to probate. This is something same-sex couples should remember when naming beneficiaries on individual accounts and policies.

Make a Property Agreement

If you put your partner on the title, you may be making an irrevocable gift. Another approach to consider is creating a property-agreement order to address the possibilities of death or separation.

Make a "Living Together" Agreement

If you are sharing money and assets, financially supporting each other and incurring debt together, a "living together" agreement can state what property belongs to whom and how you wish to handle your assets while you live as a couple or if you should part.

Execute a Durable Power of Attorney

A power of attorney gives one person in the couple financial authority to act and sign on behalf of the other, and can be used to authorize your partner to make financial or business decisions if you become incapacitated.

Create a Joint-Custody Agreement

Consult your attorney about an arrangement that ensures each partner's rights to seeing the child, continuing guardianship or custody, and ensuring that agreed-upon living arrangements are upheld in the event that one of you dies or you separate.

We'll continue to discuss the unique financial needs of LGBT couples throughout the year in this column, but this checklist can be an invaluable first step.

Wells Fargo Advisors is not a tax or legal advisor.  Wells Fargo Advisors, LLC, member SIPC, is a registered broker-dealer and separate nonbank affiliate of Wells Fargo & Company, No. 33 on the DiversityInc Top 50.

Trust services available through banking and trust affiliates in addition to nonaffiliated companies of Wells Fargo Advisors.

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