For the long term care insurance agent planning to meet with prospective gay and lesbian clients, it's important to understand the financial challenges these couples have historically faced and how such obstacles can influence their planning discussions.
Foremost in the list of challenges is the fact that gay consumers are less likely to have children who could serve as caregivers in a long term care situation. Those who had children while in heterosexual marriages may find their relationships with their sons and daughters strained by the fallout that can occur when the gay parent "comes out" or from the alienation that can occur during a divorce. Many gay people may elect not to have children, eliminating one of the most common sources of caregiving for gay elders. Long term care insurance, then, can serve as a useful component in the financial planning of a gay individual or couple.
Daunting complexities
A complex web of laws already entangles long term care planning strategies for heterosexual marriages. The increasing array of different state approvals for gay marriages (e.g., Massachusetts and Connecticut), civil unions (e.g., New Jersey and New Hampshire) and various domestic partnership ordinances (e.g., California), can make long term care discussions for gay couples even more complex. Often, you will need to help them address "workarounds" with a thorough discussion about how best to protect financial assets.
Gifting strategies, income, estate, and gift tax laws are largely governed and influenced by federal laws and Medicaid transfer rules that do not recognize and can even be punitive to gay relationships. Knowing these Medicaid transfer laws and estate planning considerations in the states where your clients reside is a key to understanding more about what challenges your clients might be facing. In addition, prejudice toward gay people, especially those in their elder years, still exists. This can lead to many preferring to obtain care in their own home — another level of planning that might need to be addressed.
How to begin
To start, there are three key pieces of information you will need in order to begin your long term care planning work with a gay couple:
- Do they have any children together or from prior relationships, and can these children serve as caregivers?
- Who have the couple named as their respective decision-makers for health care proxies, livings wills, and, most importantly, durable powers of attorney?
- What long term care experiences have they had with their own families and friends? This can help you guide them by better understanding their sensitivities.
Many middle-aged and older gay men, for example, have lived through some of the worst years of the AIDS epidemic. Their experience of a prolonged illness and the emotional and financial toll it can take on their relationships and those of their friends can be very poignant.
