Estate and Wealth Planning for Women
For most women, many cannot remember the last time they have thought about their estate plan. Women typically take a back-seat when it comes to knowledge or involvement in their estate plan or finances. Although nothing is wrong in one spouse handling the financial affairs for the family, women have unique needs that should not be overlooked. Women on average live five years longer than their male counterparts. This means women need to plan accordingly to ensure their assets can last over a longer period of time. Many women may also have limited or no work history because they were busy raising a family. This discrepancy in pay may affect how women will save for retirement and long-term care. Whether you are single, widowed, or married, proper financial and estate planning is essential. Death of a Spouse I cannot describe how many times I have had a spouse in my office who recently lost her husband and she has no idea where to start or cannot describe what assets or debts she may have. This position is extremely disadvantageous as it leaves the surviving spouse pouring through bank records, files, and the home to simply determine how much money she may have available or what debts to pay. To avoid this stress, I recommend both spouses write a list of all assets owned and debts, where the assets are located, and a list of passwords to access online accounts. Not only will this planning keep you organized, but it will greatly reduce the stress and guess work in determining what assets are available and what debts need to be paid. What Steps Should I Take? Each woman should review the follow steps to take advantage of knowing her own estate and financial plan: 1) Talk with an accountant to ensure all taxes are satisfied and if any adjustments to withholdings need to be made. If a spouse has died, estate tax return are due 9 months from date of death if any are owed. 2) Talk with a financial planner to review your financial plan for long-term care, retirement, and other needs. Consider if it is appropriate to adjust your insurance, home, automobile, or long-term care coverage. 3) Prepare an income and debt cash flow chart to determine monthly expenses and a budget. 4) If a spouse has died, collect death benefits by reviewing life insurance policies, Individual Retirement Plans (IRAs), military benefits, social security benefits, pensions, unpaid salaries or vacation benefits, or benefits available through husband’s employer. 5) If a spouse has died, locate any Will or other testamentary directive of your spouse and consult with an attorney regarding husband’s passing to determine if probate is required or other testamentary directive. 6) Prepare or review your own estate plan with the attorney. 7) Update beneficiary designations on accounts such as IRAs, life insurance, and annuities to insure the appropriate beneficiaries are named. 8) Review how your assets are titled. 9) If you have minor children, consider how they will be taken care of in the event you die. It is important to take an active role in managing or having knowledge of your finances and debts. Make sure you understand how your property is managed during life and what happens upon the death of one spouse or upon your death. What Documents Do I Need? 1) Will. A Will is a legal document which directs how your property is distributed when you die. The Will appoints a personal Representative who will pay debts and expenses, resolve claims against your estate, and distribute the property to your heirs. The Will may also appoint a guardian for minor or incapacitated children. 2) Living Will. A Living Will directs end-of-life care in the event you are in a vegetative state. This document can be coupled with a power of attorney for health care to allow your agent to authorize treatment and medical care in the even you cannot act for yourself. 3) Power of Attorney. This document appoints an agent to manage your assets and debts in the event you are unable to act for yourself. There are more advanced estate planning tools such as trusts and charitable vehicles if your circumstances require. Avoid Making Excuses The excuse we often hear is either “I am young, I do not have to worry about this until later” or “I hardly have anything, I do not need a financial or estate plan.” These are some of the excuses I see as an estate planner. Everyone whether young or old, rich or poor, will need an estate plan because accidents occur. Everyone will die and/or become incapacitated at some point in time so it is better to prepare for these events than to ignore reality. By being proactive in your personal finances and estate planning, you can gain control over planning for the death or incapacity of yourself or a spouse, control of the distribution of your assets, and ensure your children or other heirs are provided for.
It is important for women to feel empowered with their financial health. The process may seem overwhelming and this fear can simply cause a woman to do nothing. I have seen women to forget to pay property or income taxes, deal with retirement benefits, or keep property insured upon the death of a spouse. Individuals who are unaware of their financial and estate plan are at risk of being taken advantage of by family, creditors, or even acquaintances. This risk is all the more reason to have appropriate planning in place to empower yourself and to play an active role in your own financial success story.
This article is not intended to replace legal advice applicable to your situation and should be used only for informational purposes. Consult with your legal or tax advisors before implementing any suggestions contained herein. Ms. Clapp‑Younggren is an associate attorney with the firm of Sandra L. Clapp & Associates, P.A. and can be reached at aclapp@clapp‑legal.com or (208) 938‑2660.