Shreya, a marketing professional and a transgender, and Ranjit, got married under the Hindu Marriage Act. This, she says, gives her financial security, but many LGBTQ+ couples do not have the same benefits. The couple has a joint bank account and are nominees in each other’s insurance policies.
“I also have add-on credit cards with his credit cards. We will open a demat account and have joint investments. We want to rope in a financial advisor to plan our finances better”
When Shreya Singh Dalal, 32, a transgender, was taking mental health sessions online as a diversity and inclusion spokesperson during the pandemic to teach people ways of overcoming challenges, she didn’t think anyone would notice her in a romantic way. But Ranjit Singh Dalal, 50, a builder and a partner in a New Delhi-based law firm, approached her and confessed his feelings for her. Within six months, Shreya and Ranjit had tied the knot. While there was resistance from some family members, their immediate family, including parents, supported them. Looking back, Shreya feels this was the best decision she ever took. “It’s indeed very challenging being a transgender person. Though the Gazette of India passed me as a female, there are always biases from everywhere. Thankfully, I haven’t had to face any discrimination from my immediate family, which is a blessing,” she says.
Since the couple is legally married, apart from other aspects, their financial lives are also intertwined. “While I am not insecure about my finances, since we got married under the Hindu Marriage Act, many LGBTQ+ (lesbian, gay, bisexual, and transgender, questioning and others) people I know are insecure. This is especially so for same sex couples and those who are not allowed to marry. Often, they cannot open a joint account or jointly own a property. There are many other such hassles,” says Shreya.
The Dalals have a joint bank account, life insurance and accident insurance. “Moreover, I have add-on credit cards with his credit cards. Going ahead, we will open a demat account and have joint investments. We will also be roping in a financial advisor to plan our finances better,” says Shreya.
While services like banking, property ownership and investments are easily available to married heterosexual couples, those who identify as LGBTQ face many difficulties. While both partners may be able to live together, owning joint assets is difficult, so alternate options have to be found.
When Panna Gulati, 45, and Nilima Das, 41 (names changed as they did want to be identified), who are in a lesbian relationship, moved from Kolkata to Pune, they wanted to move into rented accommodation together. “But we had to lie to the house owner to be able to stay together. We said we were cousins,” says Panna. A strong educational background—they both have PhDs from IIT Bombay—and financial independence meant they didn’t have to worry about money much individually. “It’s also about the deep level of trust and understanding between us. We have been using each other’s bank accounts, credit cards, liquid assets, etc., for 17 years now, even before we decided to stay together. We have two joint accounts that we opened way back in 2006, for which we registered as cousins,” says Panna.
Experiences vary across LGBTQ+ couples, but legal and social restrictions on assets remain a challenge.
Charting A Different Course
Discrimination or the fear of discriminatory treatment leads to many LGBTQ+ couples staying away from formal or mainstream employment and take up freelance or informal work. However, with increased stress on diversity, employers are taking steps to build a more inclusive workplace. “A lot of companies offer benefits to their LGBTQ+ employees under diversity programmes; enquire about them and take advantage,” says Renu Maheshwari, CEO, Finzscholarz Wealth Manager, and a registered investment advisor with the Securities and Exchange Board of India. Some employers extend the same benefits to LGBTQ+ employees as to others; the term ‘spouse’ is replaced with ‘partner’ in policies; uniform rules regarding adoption or bereavement apply; health insurance covers gender affirmation surgeries; and more.
However, irrespective of a person’s sexual orientation and employer policies, the need for an individual to have proper financial planning remains. Therefore, meeting goals such as having an adequate emergency fund, life insurance and health cover are common and the fundamentals of goal-based planning remain the same.
Moreover, it is a fact that there are many areas where things are more difficult for them than they are for heterosexual couples. “The financial rights that are legally and socially available to heterosexual partners are not available to LGBTQ+ partners. This changes the way they raise a family, plan for retirement, plan for the partner who may devote more time to non-economic work of raising a family, and inheritance rights. There are practical difficulties in going about the things that are a non-issue for heterosexual couples,” says Maheshwari.
Same sex couples usually cannot open a joint bank account or lockers or apply for joint loans, though some banks like Axis Bank allow same sex couples to open joint accounts. There are many other hurdles such as not having joint ownership of property or financial assets. The dependant partner does not have inheritance rights. The partners cannot be the beneficial nominee in each other’s life insurance policies. Legal status of children is not well established. While many courts have ruled in favour of transgender marriages, legal complications remain.
Dealing With Uncertainties
“Practically speaking, traditional methods of financial planning (for LGBTQ+ couples) will leave major gaps due to various aspects such as lack of social security, legacy planning, power of attorney-related formalities, long-term care during old age, etc.,” says Arijit Sen, a Sebi-registered investment advisor and co-founder of financial advisory firm Merry Mind. The solution then is to work around some of the challenges.
Building a safety net is the first step. Since it is not possible to get a family floater health insurance policy as of now, opt for two separate policies. “It’s important to address specific health needs and risks. Some may want to discuss hormone therapy and surgery, while others may be more focused on mental well-being,” says Abhishek Poddar, co-founder and CEO, Plum, an employee health insurance firm that offers LGBTQ cover in employee benefits and other policies. “Earlier, gender reassignment surgeries were considered cosmetic (and hence not normally covered), but we now include that as part of the standard group medical cover. So, we can offer these policies to all our clients, even by default,” adds Poddar.
Thanks to the increasing support on social media and from corporate initiatives, financial services companies are coming up with specific products. “The insurance regulator had issued advisories to all insurers in April 2019 to ensure there is no discrimination to this section of society in providing health insurance,” says Gurdeep Singh Batra, head-retail underwriting, Bajaj Allianz General Insurance.
Another major part of creating financial security is to have adequate investments. “We need to ensure higher savings, maybe even slightly riskier investments so there are more chances of earning better returns,” says Shweta Jain, a financial planner and CEO, Investography.
The investments should be in separate names with clear nominations, says Maheshwari. “This should be supplemented with a clear Will that enumerates all details with clear instructions,” she adds.
All couples need estate planning, but it is especially important for LGBTQ+ couples. “Keep all legal documents updated and in place,” says Sen. “It is important to have a Will and/or a revocable living trust. Without it, the surviving partner may not receive any part of the estate. Most of it may go to other relatives, even if that was not the intention.”
Investment products are available to everyone, so use the most appropriate ones to create financial security. After all, money doesn’t discriminate.
Steps To Strengthen Financial Security
- Increase level of savings and investments
- Look for individual health covers for specific needs
- Investment portfolio may include higher-risk, high-returns products
- Take steps to ensure retirement planning and long-term care in old age