First, estate planning is important for everyone; despite your age, gender, or financial circumstances, you have an estate and if you don’t make plans for its distribution at your death, state law will make those decisions for you.That said, estate planning may be more important for women than for men.
Statistics show that (a) women out live men, (b) on average a married women outlives her spouse by seven years and (c) women (in part due to their longer life expectancy) are a powerful financial force, controlling over half the wealth in the United States. So, if you are a woman, the odds are that at some point, you will become individually responsible for managing the assets amassed during a life time and a properly prepared estate plan is an important part of preparing yourself for a longer period of economic security and insuring your estate is distributed according to your wishes.
Given a your longer life expectancy, the first thing your estate plan should do is insure that your long term care is assured and that, in the event of injury, disability or incapacity, you have appointed someone you can trust to make financial, legal and health care decisions on your behalf and according to your wishes. By incorporating a durable power of attorney and a health care directive into your estate plan, your can be sure that your affairs will be managed properly even when you cannot manage them yourself. Additionally, a revocable living trust can provide additional protection in the event of your incapacity. Revocable living trusts hold your assets for your benefit. They allow you to specify who will manage your financial affairs and how they are to do so when you can’t. The same revocable living trust that protects your incapacity can also contain instructions for distributing your assets when you die (something a Will can’t do). Trusts can also provide for your children from current or previous marriages, protect assets from creditors and former spouses (your’s or your heirs’), keep your estate private, and help your estate avoid probate.
If you are married, it is important that both spouses have complementary comprehensive estate plans, but as you are more likely to survive your spouse, your plan is likely to be the one managing the ultimate disposition of your family’s assets. So be sure that you and your spouse’s plans make full use not only of the “unlimited marital deduction” (assets inherited or gifted from one spouse to the other are not taxed) but both spouse’s estate tax exclusions as well. Proper planning can allow you to pass on significant wealth (in the neighborhood of $10 million) to your heirs without tax consequences.
If you are single (never married, widowed or are not legally married to your partner) starting an estate plan is a good way to take control of your destiny and preserve your legacy. For you, tax planning is even more important as the unlimited marital deduction no longer applies so other tax saving measures like charitable giving, family gifting or, educating children and grandchildren will have to be incorporated into your plan. Should you ever consider changing your single status, think about adding a “prenup” to your estate plan. While not the most romantic of conversations, the financial discussions that lead to the development of a prenup can have a positive effect on the eventual financial stability of your new family.
If you would like to discuss your estate planning needs, Cameron Law is here to help.
For a complimentary initial consultation, call 507-206-4976