Answer to the question:
Since LBMs model the Navier-Stokes equation, you can achieve incompressible Stokes flow by simply making sure $\mathrm{Re}=UL/\nu\ll1$ and keeping $U\ll1$. Since a stability limit of LBMs already limits $\mathrm{Ma}=U/c_s\sim0.1$ this should not be a problem. LBMs are considered pseudo-compressible, but since $\Delta\rho \sim O\left(\mathrm{Ma}^2\right)$, the fluctuations will be minor and you will have quasi-incompressibility. Now the stability limit may seem restrictive but understand this is in lattice units, in dimensional units the velocities may be as any desired value as long as the Reynolds number is the same in lattice units as in dimensional units.
If you need to model different phases i suggest looking into the pseudo-potential method or free-energy based methods.
Now as to if you should use LBMs or FEM for your problem, I think only you can really say after weighing the (dis)advantages of each method. Many times people pick the method they are most comfortable with and will tend to justify it with pseudo-scientific reasons about performance, ease of implementation, popularity, etc. Often times it become a slightly 'religious' debate between LBM users and other conventional CFD users. My advice is: I would suggest finding an opensource code which has examples resembling your problem which you can easily modify and go from there, learning the method it uses as you use it.
As a reply to the answer by @WolfgangBangerth:
That said, it is also true that LBMs are generally very very slow
and
So, yes: it's possible. And, no: it's not a good idea. :-)
In my opinion, this answer sounds like the poster has heard of LBMs before but never used the methods. As such i don't think he is in a position to give this advice (let alone have it as the accepted answer).
It is well known that LBMs are some of the most efficient explicit second-order accurate methods around. The algorithm is highly localized allowing for very efficient parallelization (see Sailfish CFD); LBMs are generally very very fast!. Another post discusses it here.
Granted it has disadvantages too (high memory requirement, convoluted boundary conditions, difficult to understand connection with 'real-world' equations, etc to name a few), but which method doesn't. I challenge you to give me an example in which equal situations LBM underperforms significantly compared to other methods.