Women are a powerful financial force in today’s economy as they independently earn, manage, and distribute more wealth than ever before. That’s why at Hoffman & Associates we feel it’s important for women to take control of their long term financial security and develop a proper estate plan. A successful estate plan is one that helps protect and preserve your wealth, gives you control over financial matters, ensures children and elders are taken care of, and honors your strong charitable passions.
Today, women face many challenges whether married, divorced, single or widowed, including a possible lack of financial know-how, lower lifetime wages and compensation, and greater responsibility for caretaking of children and elders. Why are women unique when it comes to estate planning? First, because women generally outlive men by five to seven years, and the average age of a widow is merely 56 years young. Some of these single women are faced with managing thousands and even millions in assets without ever balancing a checkbook. For single working women, compensation is also a major obstacle as women tend to earn less over their lifetime as compared to men and many take time off during child-bearing years, which may affect social security and pension benefits. Another challenge unique to women is their tendancy to be the main caregivers in the family, making it critical to develop a comprehensive plan for the care of minor and special needs children, as well as elderly parents. Finally, women generally harbor more charitable inclinations than men making it a priority for them to consider philanthropy and giving as part of their estate plan.
Here is a checklist women can use in developing a successful estate plan:
- Become educated in the importance of tax planning, know the current tax laws, become familiar with exclusions and how to take advantage of them, investigate advanced estate planning tools and techniques, including trusts, gifting, and college savings plans.
- Create an itemized list of all property and debts, including, but not limited to, insurance policies, securities, bank accounts, real estate, jewelry and artwork, business interests, pension plans, IRAs, and other retirement benefits.
- Consult with appropriate advisors (estate planning attorney, CPA, financial advisor) and execute a Will to direct the disposition of your estate, designate who should be in charge, simplify probate, and name guardians for minor children.
- Consider a Trust for the protection of children and assets and to reduce the tax liability (income, gift and estate).
- Get general powers of attorney and advanced directives for healthcare in place.
- Create a viable plan to manage and preserve your estate, keeping in mind the changing exemption limits for passing assets. Currently the permanent estate and gift tax exemption is $5,250,000.
- Consider having adequate life insurance in place to pay taxes if necessary and to help preserve your family’s lifestyle by paying for children’s education, mortgage expenses, taxes or other needs after your death.
- Record where a safe deposit box is located and maintain all important documents in an organized manner. Maintain a written list of all current advisors and keep it with your list of property and debts.
- Provide instructions regarding your funeral wishes and any prepaid funeral plans to whomever may be involved in making such arrangements.
- Consider charitable transfers to accomplish your estate planning goals. A charitable remainder trust, charitable lead trust, charitable gift annuity or outright gifts to any number of charities.
- If you are a business owner, plan for your business’ succession, so you are deciding who will manage your entity during illness, disability, or after death.
Although some women feel uncomfortable taking on financial responsibility for their future and that of their heirs, we strongly urge every woman, whether married, single, divorced or widowed to take a careful look at their financial situation and plan accordingly. Married women should ensure their estate plan coincides with that of their husbands to adequately take advantage of tax considerations. And since married women are more likely to outlive their husbands, they must be prepared to ultimately be responsible for the protection and distribution of all assets. For many working women, their main concerns include retirement planning and long term financial security, guardianship for minor children, caretaking for elderly parents, lowering tax liability, and ensuring assets remain in the family bloodline. We encourage all women to consult with professional advisors to ensure adequate financial and estate plans are in place while also incorporating lifetime goals and wishes. Hoffman & Associates has created specialized estate planning services for women designed to address these specific needs. For more information on our targeted services, please visit www.hoffmanestatelaw.com.
In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purpose. The information contained herein is provided “as is” for general guidance on matters of interest only. Hoffman & Associates, Attorneys-at-Law, LLC is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. Before making any decision or taking any action, you should consult a competent professional advisor.