Plugging a Hole in the Advisor’s
Advanced Planning Curriculum
AMoNg tHe grUMBLINgS often heard about education for life insurance and financial service professionals is that here are too many professional designations. It’s a fair crit- icism: advisors can now choose from scores of programs, many of which cover retirement planning for seniors.
and yet, there remains a critical need for technical expertise
in one area that is experiencing rising demand: counseling for
domestic partners. this group encompasses gay and lesbian
couples, whose planning issues I explore in my feature article be-
ginning on p. 14. It includes also bisexual and transgender folks, as
well as unmarried heterosexual couples and grandparents living
with adult children.
according to 2005-2007 U.S. Census estimates, more than a
12 million unmarried partners live in the U.S. the need for insur-
ance and financial planning is significant: Nearly half of gLBt
boomers say they do not expect to retire until age 70 because of a
lack of financial preparedness. and just 31%
of LgBt boomers say they are financially
prepared for retirement.
Such numbers are hardly surprising, giv-
en that they dovetail with the abysmal sta-
tistics among pre-retirees generally. what
concerns me is that many advisors lack a
proper grounding in the planning needs
of unmarried couples, as well as same-sex
couples whose marriages are recognized by their home state, but
not under federal law.
the dearth of planning expertise is likely to be keenly felt in
coming years as more of these couples seek counseling on the
full panoply of financial issues: marriage, divorce, wealth accu-
mulation and wealth transfer, business and retirement income
planning, among other areas.
advisors can save their clients heartache by becoming famil-
iar with tools that many domestic partners are likely to need.
example: a transfer- (or payable-) on-death bank account, which
allows individuals to bypass probate court when passing assets
to heirs. one need only complete a form, provided by the bank,
naming the domestic partner (or other heir) as the beneficiary of
the money at the account holder’s death.
Lynn elmer, the principal Financial group advisor I inter-
viewed for my feature, says she counseled a gay couple of 27
years to do this—but only after the bank of one of the partners
had failed to bring this strategy to his attention. without a toD
account, the partner’s assets could be directed to blood relatives
by a probate court, leaving a surviving partner bereft of a nest egg.
Many other techniques are available to domestic partners
and other unmarried couples to help guard against unintended
consequences and minimize tax costs connected with asset
transfers. to its credit, one institution—the Denver, Colo.-based
College for Financial planning—has brought them together in a
new curriculum leading to an accredited Domestic partnership
available as either a self-study or an instructor-led online men-
tor course, the aDpa program addresses issues that distinguish
financial planning for domestic partners from planning for mar-
ried spouses, covering such areas as wealth transfer, taxation,
retirement planning and estate planning.
what can graduates expect to come away with? College for
Financial planning professor gregg parish, who spearheaded
aDpa’s development over the past year, says the program will
point practitioners to scenarios in which domestic partners
are treated differently from married cou-
ples under federal law. and students
will learn about vehicles—the charitable
remainder trust, charitable lead trust,
irrevocable life insurance trust, among
others—that can help minimize wealth
transfer costs and facilitating other plan-
the curriculum comprises three
modules: one covering the mechanics of wealth transfer; a sec-
ond that explores income and transfer tax issues; and a third that
addresses retirement income and relationship issues.
parish points to the importance of drafting a domestic part-
nership agreement. analogous to a prenuptial agreement for
married couples, a Dpa can stipulate, for example, how issues are
to be handled while partners are together (such as child-rearing,
in the event that one partner brings children to the relationship);
and how assets are to be divided should the partners separate.
to be sure, no amount of planning can fully compensate for
the inequality under federal law between domestic partners and
married couples. Domestic partners don’t enjoy the unlimited
marital deduction, so they have to adopt techniques that add time
and cost to planning.
what the industry
But this is a caveat most domestic partners of means can live
with. what they won’t abide—and what the industry shouldn’t
tolerate—are ill-educated advisors. the College for Financial
planning’s aDpa program is thus a welcome addition to the profession’s alphabet soup of credentials. other educational institutions would do well to follow suit with similar programs. NU