Over the next 20 years, around $80 trillion will change hands as the generation known as baby boomers (individuals born between 1946 and 1964) pass on their amassed wealth, according to a recent article in Fortune magazine.
Paul Donovan, chief economist of financial powerhouse UBS Wealth Management, says that not only will the new wealth be in the hands of younger folks, but they will be “more female – and more openly queer.”
His prediction is based in part on recent Gallup research, which highlights the generational difference in LGBTQ+ identification. According to that study, three percent of baby boomers identify as LGBTQ+ compared to 5.1 percent of Gen X, 10 percent of millennials, and 23 percent of Gen Z.
While the concept of financially comfortable generations with secure futures sounds nice, LGBTQ+ Americans have had a harder time financially than straight Americans. They make 90 cents for each dollar earned by straight workers. It has become more acceptable with the current administration to discriminate against LGBTQ+ individuals, especially trans individuals, and in multiple areas of life, including employment.
This is especially true in faith-based companies. LGBTQ+ employees are also at a higher risk of losing their jobs than straight employees. What that can add up to – despite the stereotype of our community having access to spendable cash – is a community that might not be as financially savvy as one would think. Potentially unprepared for wealth management and predatory relatives and businesses ready to snatch away unsecured inheritance, it’s time to consider needed preparation.
The Fortune article points out, however, that there are signs of encouragement for our community. A Morgan Stanley study indicates that investors are putting their money into products and strategies that are dedicated to equity and inclusion. This is driven not only by LGBTQ+ investors, but also by non-LGBTQ+ investors with an LGBTQ+ household member.
With the 2015 Obergefell v. Hodges decision that gave us marriage equality, traditional avenues of wealth transfer have become more available. Homophobic family members, however, can still prove to be a financial hurdle when straight parents decide not to leave money to openly LGBTQ+ family members.
While the benefits of generational wealth change could potentially impact advancement of LGBTQ+ equality positively, it’s important for individuals in a position to acquire that financial windfall to make certain legal protections are in place.
To protect an inheritance from unsupportive or predatory biological relatives, LGBTQ+ inheritors must use defensive estate planning. Biological default laws often favor blood relatives, leaving partners and chosen family vulnerable. By utilizing trusts, updated beneficiary forms and strict legal directives, you can ensure your assets bypass hostile family members entirely.
Visit this website for more details on Defensive Estate Planning.
