An Estate-Planning Guide Just For Women

In the last half-century, women have gained a more prominent leadership role in society. They head up households, serve in high-profile government roles; and lead Fortune-500 companies.

But their approach to estate planning has not yet caught up with these important gains in other areas of life. Women hold a large percentage of the world’s wealth. But they are slower to address the crucial decisions affecting their own estates and, by extension, their families. At stake is their loved ones’ welfare, the communities they are part of, and the causes they care about.

When Do You Need an Estate Planning Guide?

I have a colleague who recounted two family stories that show the importance of estate planning for women. 

“My older sister and her husband, both in their seventies, casually revealed to me one evening that they had no will or estate plan in place and felt no urgency to get one,” she said. [Here’s a list of famous people who died without a will.] 

“With some difficulty, I explained what would happen if they died intestate (without a will). But they may as well have had cotton in their ears. Shortly thereafter, my sister’s husband had an urgent medical issue. My sister was faced with the possibility of making some pretty major financial and end-of-life decisions on her own.

“Thankfully, her husband recovered, and my sister realized how quickly life circumstances can change and how important it is to do your planning before a crisis hits.

“At about the same time, my millennial daughter acquired, in rapid succession, a new job with a pension plan, a new car, a new house in a new state, and a new fiancé. When I had the same discussion with her, she gave me a blank stare and said that she’d honestly never thought of it.

“Younger women, like my daughter, tend to feel that these kinds of decisions can be made later in life,” she said. “In the case of older women, like my sister, they may have assumed that this is something their husband has already taken care of, or that estate planning is just too complicated to deal with.”

Two stories from opposite ends of the spectrum. Yet both illustrate perfectly why women need to pay more attention to estate planning at any age. It doesn’t matter whether they’re married, soon-to-be-married, or single.

Just The Facts

So, let’s make it simple: What is an estate plan?

An estate plan is a legal document that provides for the distribution and management of a person’s estate (their “stuff”) during their lifetime and after they die.

It assures that the person’s wishes are carried out. It can also provide substantial tax benefits for the person, or their heirs. Naming an executor (person in charge) of the estate, making funeral plans, determining guardianships of children, distributing assets (money/property/other stuff you care about), and identifying charitable beneficiaries are all included in an estate plan.

What’s The Difference Between a Will And a Trust?

A trust goes into effect during your lifetime.

A will directs where, and to whom, your property will go after you die.

With a living revocable trust, you can designate who can make financial and health decisions for you should you become incapacitated. Wills traditionally go through probate court; trusts do not.

Whether you should have a will or living trust depends on your personal circumstances.

• What kind of assets do you own?
• Is there a business ownership involved?
• Are you a parent or guardian of minor children?
• Do you want to keep your affairs private and away from public record?

These and many other questions will help you and your advisors determine the plan that best suits your current situation.

What is a Living Will?

A living will simply states what kind of care you want to receive if you become incapacitated and are unable to make decisions regarding your medical treatment.

An advance directive and a durable power of attorney for health care will ensure that the person you have designated to make those decisions will carry out your express wishes for that care. Both of these documents serve to protect you and your family.

What Happens if You Die Without a Will?

Whether discussing estate planning for women or men, one hard-to-believe fact is a common denominator: More than 68 percent of Americans lack a valid will!  Some haven’t created one at all, thinking (like my friend’s sister) that there’s no urgency around the task. Others have old wills that need to be updated because of job changes, births, deaths, or changes in marital status or residence.

And there are very personal and real consequences to dying intestate.

There is, of course, the fact that you’re not just leaving behind a headache for your loved ones, you’re forcing them to deal with it when they’re already grieving your loss. Is that fair?

But there are financial consequences, as well—and they can be very severe.

The law varies from state to state, but in general, when a person passes away without a valid will a judge has the final say as to how their assets are distributed. That includes who will be named as the guardian of any minor children. Is that really something you want the court to decide?

Estates that are not carefully planned may be heavily taxed in the process as well—in some cases, draining up to 70% of your assets before your heirs see a penny!

I Don’t Have a Lot Of Assets. Do I Still Need An Estate Plan?

In short, yes. And here’s how you can begin for free.

An estate plan involves more than just what you own or how much money you have. In it, you can include funeral wishes; designate a power of attorney should you become incapacitated and unable to make decisions; hand down particular heirlooms and possessions; and even provision for the care of pets should you pass away.

My Spouse And I Own Everything Jointly. Why Do I Need An Estate-Planning Guide Just for Women?

If something happens, wouldn’t everything go to me?

Maybe. There are many factors to consider, including ex-spouses, children from previous marriages or partners, etc. Moreover, if you both pass away at the same time, it is important to have provisions in place. If you have your own estate plan, you have the assurance that your wishes will be honored no matter what.

I’m Worried I Won’t Have Enough to Leave Loved Ones, Much Less a Charity

There are many ways to leave an enduring legacy gift to charities that you care about without impacting your current income or negatively affecting the assets you leave behind. Here are a few examples:

• Bequest: You can designate a legacy gift to a charitable organization through your will or trust with cash, property, or a share of your estate’s assets. This costs nothing during your lifetime and you can change or revoke this gift if your circumstances change.

• Beneficiary Designation: A charity is named as a beneficiary of your retirement plan or life insurance policy. This gift can reduce income taxes on your retirement assets by up to 60%, thereby reducing the amount of taxes your heirs might be subject to.

• A “Leftover” Gift: You can designate the residual amount of your estate to go to a charity. This gift allows you to save and spend all you want during your lifetime and leave whatever you want to your loved ones. The charity receives whatever’s left after everything else is settled.

• Gifts of Appreciated Securities: By transferring stocks, bonds, or mutual fund shares to your charity, you can make a significant gift, receive an immediate income tax deduction, and pay no capital gains tax.

• Charitable Gift Annuity, Charitable Remainder Trust, Charitable Lead Trust: These are plans that invest your assets with a charity, allowing you to simultaneously make a gift, take a large charitable deduction, and diversify your holdings. A gift annuity also provides lifetime payments to family members or others that you designate. Most people leave a set dollar amount, or a percentage of their estates, to the charity of their choice. Certain gifts which provide a tax-break for your heirs and your estate include:

• IRA or retirement accounts
• U.S. Savings Bonds
• Accounts receivables of businesses

When It Comes to Your Legacy, Don’t Settle For Less Than the Best

If a loved one has heart problems, you’re not going to take them to just any old doctor. You want a cardiology specialist, right? You want the best.

The same principle applies here. When choosing an attorney, financial planner, or online will planner, don’t cut corners. Choose an attorney who specializes in estate planning and interview financial planners until you find one you like.

There’s too much at stake to skimp. This is your legacy! Everybody’s life circumstances are different, so every estate plan will be a little different. And in the 21st Century, women definitely need to pay much more attention to their own estate planning, and not just leave that job to a spouse or partner.

Through careful planning and good legal advice, a well-crafted will or trust will benefit the causes and people you care about for years to come and leave a lasting statement to who you are and what’s important to you. Don’t wait any longer. Start your estate plan today.

Your loved ones will thank you.