Protect your money and your partnership
The idea of squirreling good beer money away for a rainy retirement day can seem rather unpalatable, particularly when you are more interested in partying than being financially practical.
However, the idea of winding up begging your relatives for money when you’re 60 and toothless holds little appeal, and this is where a few simple financial planning steps can help.
For the gay community, and especially couples, financial planning is more than a good savings plan and smart investments: it’s about ensuring your partner has equal rights to your estate in spite of inequitable, discriminatory laws.
Financial planner Peter Wilton, who has a number of gay and lesbian clients, says laws regarding superannuation, for instance, mean gay couples need to cover all bases.
He cites an example of a gay male couple, one of whom died of cancer, and the surviving partner was “descended upon” by the disapproving family, who tried to claim the whole estate.
“Luckily we had set him up financially, so we protected the partner with wills and his superannuation so it was a strike for common decency that the family couldn’t get access to his wealth,” Wilton said.
By making a will you will ensure your shared assets such as property or car can be bequeathed as you wish – to your partner or otherwise. Wilton said this was the first and most important step.
Superannuation is often a stumbling block for gay couples, as gay relationships are not recognised as spousal under federal law. However, Wilton said this could be sidestepped using a Binding Death Benefit Nomination.
“This gives an instruction to the trustee of the super fund that upon the death of the person, they stipulate that their funds should go to a certain person,” he said. “It is binding on them to act in accordance with your instructions.”
Wilton said when it comes to investing for the future, the gay community faces the same issues as heterosexuals in terms of choice.
“I think people should always have a mix of cash, property and managed funds or share-based investments,” he said.
“Property could be an investment or the home that they live in. But there are other ways to get into property, such as property trusts.”
But fiscal responsibility is also important.
“I had a couple of guys who were partying all the time and spending huge amounts of money on everything, including rent,” Wilton said.
“I gave them some practical advice, including a savings program. They still have a great life but they are saving for their future too.”
To find a financial planner that suits you, check out SSO’s business directory.