Monday, June 24, 2013

Wall Street Sees Opportunity in Demise of DOMA

Hopefully, the U.S. Supreme Court will release it opinion later today striking down DOMA, the Defense of Marriage Act, which codified Christianist anti-gay bigotry into the federal law.   Even if the Court demonstrates a lack of spine and courage and falls to strike down bans on gay marriage nationally, should DOMA fall much will change in the legal landscape for same sex couples, albeit the impact will vary from gay friendly to anti-gay states like Virginia.  Wall Street and financial advising firms somewhat belatedly are recognizing that there is money to be made in courting same sex couples.  Some, like myself, have been working with gay and lesbian couples for a number of years on estate planning issues.  A piece in Politico looks at this recognition of the LGBT market.  Here are excerpts:

The Supreme Court’s long-anticipated ruling on the Defense of Marriage Act will provide some clarity about a fast-growing practice for banks: financial planning for same-sex couples.

The country’s highest court is expected to hand down a landmark opinion as early as Monday on a section of the law that denies married same-sex couples the same federal rights and benefits as married heterosexual couples.

“In terms of financial planning and advisory to the [lesbian, gay, bisexual or transgender] community, it does muddy the waters,” said Eric Berger, a relationship manager and founder of the LGBT Private Banking Initiative at Credit Suisse — one of many banks that began offering specialized financial planning services for the LGBT community in recent years. “The uncertainty causes a bit of paralysis from advisers because on the legal side … basically any planning that you do now, you may have to redo.”

As a number of states across the country have legalized gay marriage, Wall Street has emerged as an ally for gay rights advocates.

Prominent banking executives, including Goldman Sachs CEO Lloyd Blankfein, have spoken out in favor of same-sex marriage and an LGBT-friendly work environment. Large banks — including Goldman, Citigroup and Morgan Stanley — were also among the hundreds of companies that filed a brief earlier this year urging the Supreme Court to overturn DOMA.

And as momentum for gay marriage has gained traction, banks have seized on the changing landscape to attract high net-worth same-sex couples with custom-made financial planning services.

Scott Squillace, the founder of the law firm Squillace & Associates in Boston, which specializes in estate planning for same-sex couples, said he has noticed a marked change among banks across the country over the past decade.  “All of the banks large and small have woken up to the fact that this is a terrific demographic to market to,” said Squillace

A division of Bank of America’s Global Wealth and Investment Management group provides educational tools and materials for LGBT clients on issues ranging from estate, financial and retirement planning. 

Morgan Stanley is also ramping up its services for same-sex couples. It currently offers financial planning seminars to both advisers and clients, and plans to enhance its financial planning desktop software to accommodate wealth management for domestic partners by the end of the summer.

[I]f the Supreme Court overturns Section 3 of DOMA, the decision will present many couples with an important financial decision of their own: to wed or not to wed. From a legal and tax perspective, there is a long checklist of pros and cons.
 For example, there are no gift or estate taxes between spouses, so married couples can give each other an unlimited amount of money while alive or as part of their estate without having to pay Uncle Sam.

Not all of the benefits are necessarily positive. Low-income seniors who are eligible for Medicaid could receive federal assistance for nursing home care, but when considering eligibility, the federal government looks at a married couple’s combined income and assets, making it harder for an individual to qualify.

If the Supreme Court rules DOMA’s Section 3 is unconstitutional, same-sex couples would be poised to eventually receive the same federal marital benefits as opposite-sex couples in states where gay marriage is legal.

I will be speaking at a seminar hosted by Wells Fargo Financial Advisors on July 10th which, you guessed it, targets the LGBT market.


Kelly/RICGD said...

The July 10th it just for Wells Fargo employees or is it open to the public?

Michael-in-Norfolk said...

No, it is open to the public. Please get me your contact information and I will get an invitation to you.