Estate planning is important for all of us. However, the days of women relying solely on men to be the breadwinner and make all the decisions is increasingly over. It is important, then, for women to understand estate planning, its implications, and have a plan of their own.
Everyone knows that women on average live longer than men. While this of course means that women normally enjoy more of life, it also means that they have a higher risk of incapacity before death. This includes mental deterioration through dementia, Alzheimer’s or other health problems. It is even more important then for women to have adequate and comprehensive incapacity planning. This includes long-term care insurance, which helps cover for the cost of retirement or assisted living or may even allow you to stay at home. Medical and General Durable (i.e. “Financial”) Powers of Attorney allow a trusted and loved one to step in and make those types of decisions for you as soon as you become incapacitated. A revocable living trust can offer additional protections if you are ever incapacitated and provides for a seamless transition once you pass away.
Children, Grandchildren, Parents and Pets
If you are any minor children (under the age of 18), you need to name a guardian in your will. This will prevent a judge from having to guess as to who you want to raise your children. Naming a guardian will make your wishes known and help your wishes be fulfilled. You may also want to make provisions to take care of your parents if you wish or any children who are dependent on government benefits to meet their needs. You can also plan to take care of pets or others who are dependent on you. A good estate plan can help you be flexible with how you take care of your loved ones, from creating a gifting program or providing for the education of future generations.
If you want to contribute to a favorite charity, religion, or educational organization, you must include this in your estate plan. Charities are not default beneficiaries of your estate, so if you want contribute so an organization, the only way you can do so after you pass away is making it a part of your estate plan. An option for you to think about would be the possibility of using life insurance proceeds to gift to charities.
Protecting a Business and Other Assets
Professional women in medicine, law and real estate must be concerned about protecting their assets from lawsuits. Beyond these professions, many women own businesses, and these business also deserve planning to decide what will happen to them if the owner every becomes incapacitated, retired, or passes away. Women business owners should really consider including asset protection planning and business succession planning in their estate planning strategy.
Generally, women marry men who are older. Between that and the fact that women live longer than men, there is a large chance that women will become widowed at some point in their life. If you do not do enough planning, your standard of living can decrease during retirement or in consequence of a spouse’s death. If you are in a second marriage, a blended family may complicate your planning. People often want to provide for a second spouse without possibly diminishing their children’s inheritance. Also, in many situations, because women outlive their husbands, they often have the final say of who receives their couple’s assets. Therefore, it is important for women to have an active part in any estate planning. Knowing the plan from the beginning will empower you to continue to implement the plan.
Unmarried Women (Never Married, Divorced and Widowed)
Without an estate plan, and if you are not married, only those individuals with any legal right will get receive an inheritance. That means that friends, charities, or unmarried partners will not be among your heirs. If, however, you are divorced or separated, you want to modify your estate planning and beneficiary designation documents to make sure that you do not accidentally give your ex more assets or authority than you want to.