Northern Trust offers financial help with LGBT Practice

In January the financial institution Northern Trust formalized the national branch of their LGBT and non-traditional family practice. The practice provides financial management and services to help meet the unique needs of LGBT individuals. John McGowan is the national practice leader who is responsible for implementing the program in markets across the nation. Northern Trust makes local donations to the Colorado LGBT community, and was one of the first financial companies to offer domestic partnership benefits to employees more than 14 years ago.

What financial struggles do LGBT couples encounter that are unique?
“Wealth transfer” presents the greatest financial struggle for LGBT families. By that I mean the ability to provide financial care to loved ones while you are living and upon your death. Many federal and state laws are designed to support the financial health of the family unit, but they aren’t available to same-sex couples. If I were straight and married, laws would allow me to file a joint tax return, ensure my spouse receives an inheritance and allow me to give money and other assets to my spouse – during my life or upon my death – tax-free. Today’s laws afford none of these financial benefits to same-sex couples.

When and why did Northern Trust establish an LGBT practice?
About three years ago, we started getting calls from same-sex couples asking for help planning their financial future, often after they began cohabitating or upon expecting a child. They knew they faced legal and tax hurdles, but didn’t know where to begin addressing them. We had been developing financial strategies for LGBT clients for decades, many being the beneficiaries of family trusts. We recognized this as an opportunity to build best practices around these strategies and market our expertise directly to the LGBT community.

Why does the LGBT community need a financial institution that caters to them?
LGBT clients want to know that their financial advisor understands them. They want to know that their financial adviser already has experience providing financial solutions to LGBT families. I have found that the tension level in the room almost audibly drops as an LGBT client recognizes she can simply be herself. Successful financial plans cannot be drafted if the client is not forthcoming with information about the important people and charities in their life for which they want to provide.

What types of services do you offer?
Northern Trust is a full-service financial institution, including banking and investment management. Our fiduciary services are of particular importance to our LGBT clients. Northern Trust can be named as trustee or executor in our clients’ estate documents (i.e. will, trusts). Upon their death, we ensure their assets are distributed to their surviving partner, children, friends, and charities, exactly as they specified. We can continue to manage these assets for the benefit of survivors if they are unable or uninterested in doing this for themselves. If you consider an LGBT person whose family is hostile to his being gay, knowing now that after his death his loved ones will be cared for as he intended can bring him peace of mind.

Discuss “Integrated Approach.”
We don’t believe it is ever in our client’s best interest, LGBT or not, to give advice on an isolated part of their financial picture. When we meet with an LGBT client, we are going to ask a lot of questions: Who are the important people in your life? Are there charities you want to support? How do you want to financially benefit your loved ones and charities, now and in the future? Once we understand the client’s big picture, we develop a plan together with their other advisors, such as their attorney and accountant.

What is the most common financial issue facing the LGBT community?
The most common mistake we see LGBT couples make is the titling of assets, particularly their home. Couples often title their residence as “joint tenants” to ensure it automatically transfers to the surviving partner upon the first death. This is what our parents typically did, so it seems to make sense. We advise our clients that there are ways of giving their surviving partner the benefit of living in the home for the duration of their life without putting them on the title.