BMO Financial Group

BMO Financial Group

June 23, 2014 08:00 ET

REPEAT-BMO Pride Month Report: Financial Planning Key for LGBTQ Couples

- The number of same-sex couples has doubled in the last 10 years; almost half live in Canada's three largest cities

- Report finds that same-sex couples still face financial obstacles in areas such as estate planning and workplace benefits

TORONTO, ONTARIO--(Marketwired - June 23, 2014) - The BMO Wealth Institute issued a report today on the financial hurdles that same-sex couples face. The report, Taking the Rights and Opportunities You Have Now More Seriously, was launched during a media panel hosted by BMO to mark Pride Month and featured:

  • Enza Anderson, Financial Service Coordinator, BMO Bank of Montreal
  • Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group
  • Gavin Clark, Wealth Advisor, BMO Nesbitt Burns
  • Becky McFarlane, Director of Community Programs and Services, The 519

Panelists provided their thoughts on the report and shared their views on the challenges that remain for members of the LGBTQ community in their struggle to achieve true financial equality.

According to the report, there has been a significant increase in the number of same-sex couples in Canada. In 2011 there were approximately 65,000 same sex couples in Canada. This accounted for almost one per cent of all couples and was double the number of same-sex couples reported 10 years earlier. Additionally, the report noted that same-sex couples tend to live in the largest cities in Canada, with almost half (45.6 per cent) living in Toronto, Montreal and Vancouver. By comparison, only one-third of opposite-sex couples live in those cities.

The report stated that the LGBTQ community is well on its way toward acceptance and equality, but differences remain that have consequences for financial planning, and that couples in the community must take into account to ensure a comfortable and secure future.

"It's taken couples in the LGBTQ community many years to achieve the rights and opportunities they now have in Canada," said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "But even today, full equality has not yet been realized. Some legislation still puts unmarried same-sex couples at a disadvantage with respect to certain estate planning issues and not all private sector companies have the workplace benefits policies in place to ensure same sex couples are treated equitably."

The report found that it's essential for LGBTQ couples to have an estate plan, prepare or update Wills and Powers of Attorney, and review insurance needs. "Updating beneficiary designations will help to ensure the needs of your partner are met, and the transition of assets according to your wishes," noted Mr. Buttigieg. "Feeling confident about the future comes from knowing where you stand now and how to get where you want to be. A customized financial plan can put you on the right path."

The report cited several areas for LGBTQ couples to consider in their financial planning:

Changes in Old Age Security and the Canada Pension Plan: It was only in 2000 that both the benefits and obligations of these two income support programs were extended to same-sex and common-law couples. Included in these changes was the availability of survivor benefits for common-law partners of deceased individuals. These programs are important income components for retirement planning. Additionally, as long as both partners are over the age of 60 and are receiving CPP payments, it is now possible to share a portion of CPP benefits, proportional to the time spent together.

Changes in employment benefits: Many large companies have instituted policies that prohibit discrimination on the basis of sexual orientation. In fact, a majority (88 per cent) of Fortune 500 companies, many of which operate in Canada, have such policies. However, only 62 per cent of Fortune 500 companies provide domestic partner health insurance benefits to their employees.

Changes in taxes: With equality granted for all Canadian tax purposes in 2001, the ability to save and defer taxes as part of both a financial plan and an estate plan became available to same-sex couples. Income splitting strategies such as the use of spousal RRSPs, prescribed-rate loans between spouses, pension income splitting, and the transfer of certain tax credits between spouses provide excellent opportunities to reduce the overall tax bill a couple faces.

Wills: A person who dies without a Will in place is considered to be intestate. Unfortunately, intestacy rules in several provinces do not provide for same-sex partners, or for common-law partners in general. Instead, assets go to the closest blood relationships - such as parents, children or siblings - requiring a common-law partner to fight using other provincial legislation for a share of assets or for financial support. This can be especially difficult if family members of the deceased partner did not support the same-sex relationship. Having a properly worded Will can help to provide financial protection to a surviving same-sex or common-law spouse.

Powers of Attorney: When Wills are drafted or updated, it is also important to set up powers of attorney (POAs) to protect both spouses. This will allow your trusted partner to take care of your finances and/or your health-care decisions should you become unable to do so yourself.

Insurance: An important aim of any financial or estate plan is to ensure that adequate financial resources are available to help meet the needs of both you and your partner. Life insurance can be updated to ensure that same-sex partners are named as beneficiaries, helping to provide sufficient funds when needed.

To view a copy of the full report, please visit:

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About the BMO Wealth Institute

The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute's team of professionals have deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.

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