When John LeBlanc, principal and founder of Back Bay Financial Group in Boston, took his CFP certification course several years ago, his professor decided to skip the last chapter in the estate planning book—the chapter devoted to what LeBlanc laughingly calls the “unusual stuff,” which at the time, had to do with tax and estate planning for unmarried couples.
LeBlanc, who was already interested in that chapter and the topic, did read through it, and today, when changes in society have resulted in a whole lot more “unusual stuff,” he is one of those advisors who is well ahead of the game.
With clients in the first state to legalize same-sex marriage, LeBlanc has to consider the best tax outcomes for people in different kinds of social and family situations. He has to come up with the best tax options for gay and lesbian clients who frequently file joint state tax returns and single ones at the federal level, for instance, and for clients who have two homes and who frequently need to consider which state is best as their "primary" residence based on which states support or recognize their marriage.
“I have other clients who need to be careful which documents are kept current as they may have a still valid domestic partnership agreement in one state and be married in another and it's not always the state they live in,” LeBlanc says. “I never thought when taking my CFP that words like ‘second parent adoption’ and ‘surrogate mother’ would become commonplace when talking with clients.”
Despite the complexities that come with being a 21st century advisor, though, there are also rewards, LeBlanc says. Both he and his firm have embraced the idea that societal change is inevitable. LeBlanc believes that all other advisors have to embrace it, too, if they want to remain competitive and current.
These days, there is, fortunately, a good amount of discussion about alternative family structures and advisors who don’t know anything about these can find places to go to in order to find out more.
Organizations like Pride Planners, a group of financial professionals dedicated to raising awareness on the special needs of gay, lesbian and non-traditional couples and families, hosts twice-yearly conferences to educate advisors, and attendance at the events has been steadily growing, LeBlanc says.
Just last month, the College for Financial Planning (CFFP) launched a new Accredited Domestic Partnership Advisor designation, set up to help advisors better meet the needs of any domestic partnership. The course is the first of its kind and it is specifically designed to help advisors approach gay-lesbian-bisexual and transgender (GLBT) relationships, as well as couples living in other non-traditional relationships.
The program, says Dirk Pantone, vice president of business development for the CFFP, is an extension of what the CFFP had set up three years ago for Wachovia, at its behest, to better equip its advisors to serve alternative couples and families. It is designed to educate advisors on the tax implications of different kinds of relationships and familiarize them with tax regimes in different states, Pantone says, and is a course for advanced planners, people who have been in the business for some time and have a solid foundation.
While many individual companies have special programs dedicated to alternative relationships, Pantone believes that there needs to be a greater effort made on a more widespread level to both acknowledge and understand alternative relationships.
More important, though, both Pantone and LeBlanc believe that advisors need to be aware of their clients’ social situations, the different relationships in their lives and where these may lead to, because inevitably, every relationship has some kind of tax and legal implication.
“It isn’t just about GLBTs: Two brothers may suddenly decide to live together when they get old and this has its own ramifications from a tax point of view,” Pantone says.
LeBlanc adds: “If you’re the kind of advisor who only has a dialogue about finance, then you’re not going to make it, because you really need to understand the relationships your clients are in and what they might lead to. Like a guy who all along you thought was single may suddenly come out—well, from a tax point of view, that could change things altogether.”
(See an article from AdvisorOne on the new CFFP designation.)