BY STEVE ROTHAUS, srothaus@MiamiHerald.com
Northern Trust, a Chicago-based investment bank founded in 1889, boasts on its website that "we have evolved with the changing needs of our clients and our world."
This week, the bank announced its formal launch of a "Lesbian, Gay, Bisexual, Transgender (LGBT) and Non-Traditional Family Practice," which will begin by serving customers in South Florida.
"There is a large LGBT marketplace there," said John McGowan, a longtime Northern Trust banker named national practice leader for the program, which tested for about 18 months in Chicago. Along with South Florida, the practice also will debut in Southern California and Denver.
Northern Trust, with offices in Miami, Coral Gables, Key Biscayne, Aventura and Fort Lauderdale, aims its services at clients with $1 million-plus assets. The bank hopes to attract wealthy gay couples who often face complex tax and legal issues."
Legally married couples have "unlimited marital deductions for estate and gift taxes, that allows spouses to freely transfer assets from one to another without tax consequences," McGowan said. But tax breaks don't exist for same-sex couples.
"Florida has very few laws that protect same-sex couples," McGowan said. "It's a matter of making clients aware of estate and legal documents that need to be in place to protect the relationship, the family."
Gay men and women -- and unmarried straight couples -- who inherit their partners' wealth are taxed at 35 percent subject to today's $5 million lifetime gift tax exemption. In two years, the exemption is scheduled to drop to $1 million, McGowan said.
The federal government doesn't recognize gay couples, even those married in states where same-sex partners can legally wed. Florida voters in 2008 passed a state constitutional amendment that defined marriage as a bond between opposite-sex couples, and rendered invalid any other union "treated as marriage or the substantial equivalent."
End of life issues and inheritance rights also come into play.
"A wife has the legal right to be at her husband's side in the hospital if he takes ill, the legal ability to make medical decisions. But in most states, unless [gay partners] had a power of attorney for healthcare, they do not have the legal right to be at their partner's side," McGowan said.
And, "if a will is not in place, the surviving [gay partner] will end up with
Northern Trust isn't the only bank reaching out to LGBT clients. Bank of America, Goldman Sachs, Wachovia and many others also actively compete for gay investment dollars.
"Regardless of advertising, the client should interview different investment firms to understand if the investment approach is right for them and if there's a connection with the people they'll be working with," said Gene Sulzberger, senior vice president at PRS Investment Advisory in Miami. "Don't rely solely on a company putting marketing dollars behind an LGBT campaign."