Why is estate planning especially important for women?
On average, life expectancy in the U.S. is 5 years higher for women than for men. This means that women are likely to outlive their male counterparts, and also have a longer retirement period to prepare for. A recent Census Bureau survey revealed that women possess “51% of U.S. personal wealth and are now the primary source of income in over 40% of households.” This highlights the impact of women’s succession planning on a larger scale. Regardless of age, career path, number of children, or marital status, estate planning is relevant to every woman’s life. The following tips on navigating the world of estate planning will place you a significant advantage:
1. Protect your valuables and heirlooms, not just real estate.
The purpose of a will, a main estate planning document, is to establish how your estate will be handled and how certain decisions will be made in the event of death or incapacitation. Aside from assets like property (if any), vehicles, and financial accounts, you may also include personal valuables in your estate plan. When your surviving loved ones are tasked with managing your remaining possessions, they may find it difficult to part with sentimental items. Make it clear how you would like certain belongings, like family heirlooms, to be handled, and which items may be discarded.
2. Know your healthcare options.
An Advance Directive or living will protects your right to refuse medical treatment that you do not want and request treatment you do want. This includes resuscitation and any other specific instructions you would like carried out. You may also appoint a health care agent to make decisions on your behalf, either immediately, or following your incapacitation.
3. Choose a trusted agent to represent you.
A Power of Attorney document allows an agent to act for you in respect to legal, financial, and personal decisions. Choose someone you trust, such as your spouse or a reliable professional, and clearly outline the scope of their decision-making power (either broad or limited).
4. Children and Family
In your will, you may list not just who you would like to care for your child, but how they will care for them, including values and principles you encourage the guardian to cultivate. For mothers, this is an especially important aspect of childcare, and it can be comforting to have these wishes included in your estate plan. In addition, you can establish a trust fund to cover childcare costs.
5. Discuss your estate plan with loved ones
Death is an uncomfortable topic. However, having a clear and open dialogue about estate planning with your loved ones can alleviate future stress and uncertainty.
If you have children, it is crucial to discuss guardianship with your child’s parent, your family members, or other potential guardians.
6. Protect your business.
If you are an owner of one of the many women-owned businesses, you understand the effort and dedication that comes with it. Consider whether you would want your business to continue operations in your absence if you become incapacitated or pass away. If this is the case, you may create a business succession plan, which names a successor and can include agreements that facilitate the transition.
7. Don’t forget about digital assets
Creating a list of current passwords to be accessed in case of your death or incapacitation may save your executor (the personal representative in charge of executing the decisions in your will) a great deal of hassle, especially in regard to digital assets like online bank accounts.
Also, ask yourself whether you would like social media accounts deleted or preserved. Some networks, like Facebook, allow you to appoint a “legacy contact,” who can access and manage your account.
8. Consider other estate planning tools and uses.
Did you know you could name charities and organizations as beneficiaries in your will? This is a commendable alternative to neglecting to write a will and having your estate distributed by a probate court, especially for those with no heirs.
9. Keep your estate plan documents up-to-date.
During major life events, like changes in career, childbirth, divorce, and marriage, estate planning may not be at the forefront of your priorities. However, this is exactly the time to reflect on elements of your estate plan, such as adding or removing beneficiaries and appointing personal representatives. You have the chance to update your estate plan as your life evolves – don’t procrastinate!
10. Make sure your estate plan is valid.
Once you have taken the time to prepare estate plan documents, it is crucial to make sure these documents are legally valid. If documents are drafted incorrectly or mishandled, they may not be legally recognized. Your estate would then be subject to the probate process, in which a State court handles the distribution of a deceased’s estate.