June is LGBTQ Pride Month, which is an inclusive celebration of the lesbian, gay, bisexual, transgender and queer or questioning community. It provides a valuable opportunity to understand and raise awareness of the particular financial challenges facing LGBTQ people in Hong Kong.

The region has made significant progress in improving LGBT rights over recent years. For example, the landmark case of QT v Director of Immigration in 2018, which was an important victory for same-sex couples wishing to live and work in Hong Kong.

As a result of this case, if a couple enters into a same-sex marriage or civil partnership outside Hong Kong, and one of them has an employment visa, their spouse is now eligible for a dependent visa.

Another example is the judgment handed down by the Court of Final Appeal in Q & Tse Henry Edward v Commissioner of Registration on February 6, 2023. Following this, the Government announced on April 3rd 2024 that individuals who have not completed full sex reassignment surgery (SRS) may still apply to change the sex entry on their identity cards provided they satisfy certain revised criteria.

However, there are some issues that members of this community continue to battle in 2024. For example, same-sex marriage and civil unions are not recognised by the law of Hong Kong. Additionally, changing the sex entry on a Hong Kong ID card does not affect other Government policies regarding gender-related matters under law.

These issues can complicate matters such as estate planning and the division of assets if a relationship breaks down. So, LGBTQ people need to carefully structure their finances to protect their wealth.

Read on to discover three financial challenges facing the LGBT community in Hong Kong and how effective financial planning can help.

1. Managing healthcare costs

LGBTQ couples who decide to have a family may face higher healthcare costs than a heterosexual couple who conceive naturally.

For example, a same-sex couple who decides to pursue IVF treatment will not be eligible for the subsidised IVF services offered by Hong Kong public hospitals, which only legally married couples can access.

According to the Guardian there was a promising court ruling in 2023 that the city must provide an alternative to marriage that legally recognises the rights of same-sex couples. However, it’s not clear when this alternative might materialise.

So, currently, same-sex couples must fund IVF treatment privately, which according to figures published by China Daily Hong Kong typically costs at least HK$80,000 for each treatment cycle – more than is charged in nearby regions such as Singapore, Thailand, and the Chinese mainland.

Likewise, an individual who wishes to undergo gender reassignment surgery could face a significant medical bill.

While these may represent significant costs, a financial professional can create a bespoke plan for achieving your long-term goals, whatever they may be.

2. Planning for a lengthy retirement

While some LGBTQ couples choose to have a family, recent research in the US, published by the United States Census Bureau, has found that only 14.7% of same-sex couples had at least one child in 2019, compared to 37.8% of heterosexual couples.

Without the costs associated with having children, you could potentially accumulate more wealth throughout your working life than most heterosexual couples and retire earlier.

As such, creating the right retirement wealth accumulation strategy might give you the option to retire at a relatively young age.

While this might sound like good news, a long retirement requires careful financial planning.

Fortunately, engaging with your finances as early as possible could help you build the wealth you need for your desired retirement lifestyle, no matter how long it lasts.

Considering the following factors might help you plan for a retirement that could last 30 years or more:

• What your life expectancy could realistically be
• How you plan to spend your retirement
• What kind of lifestyle you expect to have, and its costs
• How your spending might change during retirement.

A financial planner can use cashflow modelling to give you a clear picture of your retirement income needs. They will then be able to work with you to create a bespoke plan that aligns with your long-term goals.

In addition to calculating your financial needs, you might also want to consider factors such as where you’d like to live. For example, finding a home in an inclusive community where you feel comfortable and accepted could be an important aspect of your retirement plans.

3. Estate planning to protect a same-sex spouse

In 2020, the Hong Kong Court of Appeal upheld a ruling that gave same-sex married couples the same inheritance rights as heterosexual couples.

While this was a promising step towards equal rights for LGBTQ people, as mentioned above, same-sex marriage is still not legally recognised in the city and Hong Kong’s “Law of Intestacy” may result in undesirable estate distributions and an extremely slow to process to settle an estate.

So, creating a comprehensive estate plan remains crucial for ensuring that your partner will be provided for after you’re gone.

Writing a Will – and its related documents – that explicitly state your wishes and names your spouse or partner could help ensure they are recognised and provided for.

Additionally, you can specify who you want to act as guardians for any children you have, in your will.

As reported by the Standard, a 2021 case in Hong Kong ruled that same-sex couples can now enjoy equal parental rights over their children. However, as this is a relatively recent case, the application of the ruling may require further clarification.

So, ensuring that your spouse is named in your will as your children’s guardian could provide invaluable peace of mind.

Get in touch

If you want to find out more about how we can help you tackle your unique financial challenges and create a bespoke plan for achieving your long-term goals, please contact us by email info@bmpwealth.com or call +852 3975 2878.