Estate planning is essential for adults of all ages, professions, and marital statuses. However, women have specific estate planning needs that may result in unique estate planning mistakes. When compared with men, women are more likely to live longer, be custodial parents, serve as a caregiver to senior parents, and leave major financial planning and investing decisions to their spouses. Women work hard to create comfortable lifestyles for their loved ones and should avoid making these mistakes in order to protect themselves and their families.
1. Unmarried or childless women think they do not need a will
Without a spouse or children, many unmarried women believe they do not need a will because they do not have any direct heirs. However, these women still have valued possessions that could be left to friends, unmarried partners, or charitable organizations if named in a valid estate plan.
2. Assuming your spouse will receive everything
Many young couples have separate bank accounts and have chosen not to retitle bank accounts into their joint names. In this situation, without a power of attorney to allow a spouse to act on the other’s behalf in financial situations, accessing separate bank accounts and completing certain tasks (like paying bills) becomes difficult when most of the assets are in the name of the person who dies or becomes unable to act on their own. This can create significant financial hardship for women, as they are more likely to leave major financial planning and investing to their spouses.
3. Not updating your estate plan
Estate plans should always be updated in the event of the five D’s: death, disability, divorce, distance, descendants. As your life changes, your estate plan should be updated to reflect these changes. Undesirable consequences can be avoided by periodically revisiting your estate planning documents.
4. Leaving your spouse in charge of estate planning
While this practice might be convenient for married couples, it has the potential to lead to unexpected or negative results in the event of a divorce or death. The only way to protect yourself, your family, and your finances is to be knowledgeable about the plans set in place for your future.
5. Not reevaluating your children’s guardianship plan after divorce
If a guardianship plan was created prior to divorce, your child’s appointed guardian may be one of your former spouse’s close friends or family members. You may no longer be comfortable with this plan after the divorce, and therefore should revise the guardianship plan to make sure you have control over who would take care of your child should you pass away before they are an adult.
6. Not having a plan for your business
In the event of a spouse’s death, you may prefer not to carry on your late spouse’s business. Conversely, your surviving spouse may not want to carry on yours. You could also prefer to have a close friend run the business or arrange for the business to be sold. Without a valid estate plan, there is no set strategy for how the business will be managed nor is there any guarantee that the business will operate according to your wishes.
7. Not having a plan at all
Without a valid estate plan, there is no way to ensure that your loved ones will be protected when you’re gone or that someone you trust will be making your medical, legal, financial and personal decisions when you cannot. In the end, your family will have to make difficult decisions and the laws in your state will determine who inherits your assets. Avoid this by making sure you have a complete and accurate estate plan in place.