Ready for Baby? Considerations for Same-Sex Couples with Kids

Financial Advisor Financial Advisor for Gay Couples Financial Advisor for LGBT Couples Financial Planning for Gay Couples July 28, 2017 Author: Woody Derricks
financial considerations for same-sex couples with kids

Many same-sex couples have children or are planning to have them in the future. Some enter the relationship with kids from a previous marriage or union, while others may look to adopt or use a surrogate. If you are in a same-sex relationship and looking to add to your family, there are some things you should consider to ensure that your children are fully protected – no matter what happens with your significant other.


Plan for the Worst

Custody laws for same-sex couples are constantly changing, and not always fair. Even for married partners, the law can vary from state to state. While you may believe that you will never part ways with your significant other, it’s best to plan for an unfortunate situation up-front to avoid a parentage or custody battle in court. Plus, it’s always good to make important decisions while you are amicable and level-headed.


If You’re the Only Legal Parent…

In many same-sex couples, one partner is the biological parent of the child. If this is the case in your relationship, consider taking the following actions:

  • Ensure the other partner is a legal parent. Consult an attorney in your state about laws regarding your situation, whether it involves adoption or artificial insemination. Even if your state sees your partner as a legal parent, it’s a good idea to take legal action so that guardianship will be undisputed in any state. Many attorneys recommend going through the adoption process or obtaining a court judgment on parentage.
  • Protect your child financially. If your child has a legal parent from a previous relationship, you may not want or need your partner to become a legal parent. Instead, you may be concerned about leaving your child an inheritance upon your death. If you are married or have entered into a legal union with your partner, you should consult an attorney in regards to establishing a will and trust. You should also make sure that retirement accounts and other investments have the proper beneficiary designations.
  • Create a legally-binding agreement with your partner. It may not be romantic, but prenuptial, postnuptial, and cohabitation agreements can save you time and money in the long-run. Keep in mind, though, that such agreements can lay out asset allocation upon the demise of your relationship, but they cannot arrange child support or custody. Those issues are a matter of public policy and will have to be decided upon in court.


If You’re Both Legal Parents…

If you have met the requirements of your state and are both legal parents – either through adoption, marriage, civil union, or registered domestic partnership – then you will both have equal rights to the child. It’s still a good idea to seek advice from an attorney and a Registered Investment Advisor (RIA) to find the best ways to protect your child’s financial future.


The Financial Implications of Having Children

If you are pondering what life would be like with kids, you should consider all the ways that they can impact your wallet.

Examine your:

  • Housing situation – Do you have enough space? Do you live in a secure, kid-friendly area?
  • Transportation – Do you have a way to safely transport a child?
  • Income level – Can you afford additional expenses?
  • Employment leave policies – Do you have maternity or paternity leave? What happens if your child is sick and needs to stay home from school?
  • Childcare options – Who will care for your child? Will you return to work or stay home?
  • Health insurance coverage – Does your insurance cover dependents? Does it cover your partner?
  • Life and disability insurance – Will your family be covered if something happens to you or your partner?
  • College-planning choices – Can you afford to put your child through college?


Building Your Family

If you aren’t sure how your relationship status impacts any of the areas mentioned above, or you don’t know the answers to some of these questions, you may want to consult a professional before you welcome a new child into your family. Attorneys, tax specialists, and RIAs can help you prepare a plan that protects both your needs and those of your little one. A little preparation can go a long way in securing your child’s financial security, and it may also strengthen your relationship with your loved one.


We are not attorneys, and this should not be considered legal advice. The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. This information is not intended to be a substitute for individualized tax, investment, or legal advice. We suggest that you discuss your particular situation with a qualified tax, legal, and investment advisor.


As a Registered Investment Advisor (RIA), Partnership Wealth Management is committed to providing our clients with financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management, we have a long history of working with the LGBT community. Among the many services we offer are financial planning and estate planning strategies for gay and lesbian couples. Financial planning is an important part of preparing for the future; contact us today to get started: