As a 33-year-old single gay man, Brian Webb knows his retirement requires special planning.
"I may not have a partner, and definitely no kids to look after me, so I am very cognizant that I might have additional costs," says the Vancouver marketing professional. "If I need special care, such as home care, I will have to pay for that myself."
Mr. Webb is financially savvy, has an updated will, contributes to RRSPs, and is saving to buy his first home. Yet many older members of the lesbian, gay, bisexual and transgender (LGBT) community, particularly those who live far from large urban centres, are struggling with estate-planning issues as well as with finding and funding care.
Caroline Dabu, vice-president of retirement and financial planning strategy with Bank of Montreal, says there are only a handful of retirement homes that are accepting of gay couples or singles.
"It was hard for this generation of retirees to come out of the closet. Now there is a risk that in retirement, they will need to go back into the closet," she said.
Alternative options like home care are far more expensive and can add as much as $50,000 in annual costs to retirement plans, Ms. Dabu said.
In addition, many LGBT people retiring now do not have kids, which makes it more important than ever to have an updated will, she said. "Be specific about what you want to have happen to your estate, especially if you think family members will contest it."
Ms. Dabu has these retirement and estate-planning tips for LGBT singles and couples:
1) Plan and save for your old-age living arrangements. If your health deteriorates, is there an assisted-living facility or retirement home that is accepting of LGBT individuals or couples? If not, you may need to set aside more for home care. Make sure you also establish a strong social network and community that can help you.
2) Draw up a proper will. Even if you have no spouse or dependants, you should have a will. Dying intestate - without a valid will - means the court will decide on a personal representative for you and the provincial succession laws will dictate whom your estate goes to.
3) Make sure your will is updated. Common-law partners should not assume they will be entitled to their partner's estate at the time of death because the rules differ by jurisdiction. If you and your common-law partner decide to marry, you will need new wills. In most provinces, marriage often voids prior wills.
4) Make sure there can be no doubt that your will is entirely valid. If your family does not accept your relationship and you are concerned they may challenge a will which favours your same-sex spouse or partner, make sure you disclose these concerns to your lawyer when the will is being prepared and have them ask you questions designed to confirm that you have the legal and mental capacity to make a will.
5) Include your spouse or partner on your paperwork. Consider holding your properties jointly and naming your spouse or partner as a direct beneficiary of your RRSP, RRIF, and insurance policy. If you want them to have the legal authority to manage your financial affairs or make health-care decisions for you in the event you are incapacitated, make sure you have a valid, continuing power of attorney prepared and appoint your spouse or partner as attorney.
6) If you are single, having a continuing power of attorney is important. Even if you are incapacitated for a short period of time, you need to ensure that someone you trust has been designated to take care of your affairs. Likewise, you may wish to appoint a trusted person to be your attorney for your health-care wishes.
Roma Luciw is the web editor of the Globe Investor personal finance site. She also writes for the Home Cents blog.
Roma Luciw