Case notes from clients who are homosexuals

Recently there are heated arguments amongst Singaporeans on the Penal Code 377A matter. Personally, I don't endorse such a life-style (i don't endorse anything that will undermine the foundation and perpetuity of a family unit); but, like it or not, homosexuals do exist in any society since the beginning of time.

I do have clients who are gays and lesbians, and this group of people do have an unique financial planning concerns. Below are some case notes from my field experience:

1. The need to have an estate plan

Same sex marriages are not recognised in Singapore. Therefore, a homosexual has to write a will to distribute his/her assets to secure the financial security of his/her partner. Otherwise, under the Intestate Succession Act, the partner will not be entitled to any inheritances.

The other estate planning technique is to arrange for a life insurance policy to be assigned (under the Policies of Assurance Act) to their partner.

2. The need to have a well funded retirement plan

One of the deepest concern of a homosexual is the fear of old age without money. First, this is because many of them do not expect a life-long relationships with their partners. Second, homosexual cannot produce children (unless they adopt), hence the thoughts of having children to care for them in old age is almost zero.

Therefore, their need to save and invest their retirement fund is more crucial than other people.

3. The need to self-insure themselve

Homosexuals face great difficult to obtain medical and life insurance plans. This is becuase they are viewed to be in a high risk category of getting HIV. Most medical and critical illness plan will exclude them, and the life insurance plan would usually be issued at a higher premium. Hence, homosexuals have to use their own assets to pay for financial issues of medical, illness, disability or death.

4. The need to plan for property (or assets) ownership

As mentioned in point 2 about the fear of lack of consistent long term partner, property ownership can be a tricky issue. If the homosexual relationship does not work out, one party has to buy out the (property)share of the other person. Again, this need money.

In Singapore, a homosexual union can't get a divorce because there is no marriage to begin with, hence, there is no such thing as a division of matrimonial assets or an enforcement by court order for alimony payment. If one homosexual party is supremely stronger financially than the other party, the weaker one will face a financial disaster in a "divorce" situation.

In my professional experience in engaging this group of people, their financial planning needs are subtlely more complex than the rest.