While everyone is in need of estate planning, women especially need to understand estate planning and have their own plan in place. The following describes why having a estate planning portfolio, which includes a Trust, Will, Durable Power of Attorney and healthcare documentation is so important for women:
Incapacity. On average women live longer than men, which means there is an increased need to plan for physical and/or mental incapacity. When long-term care insurance is purchased in advance it can help cover the costs of incapacity and can even help women remain in their homes should that be their wish. Planning ahead prevents the court from taking control of finances and of personal care at incapacity – a court action called a Conservatorship or “Living Probate.” Incapacity planning includes having a properly drafted General Durable Powers of Attorney naming a trustworthy person to act as Agent in the event of incapacity. Additionally, healthcare documents, including an Advance Health Care Directive and HIPAA release are crucial. A properly drafted Revocable Living Trust will provide excellent protection for assets at incapacity and contains dispositive instructions for administering the estate after death.
Children, Grandchildren, Parents and Pets. Regardless of wealth, estate planning is so important because women raising minor children need to name a guardian in their Will. If no guardian is named, a judge may have to decide who will raise them, which may be contrary to your wishes. Provisions need to be included for children, parents or relative with special needs, pets and anyone that is dependent on you for support. If one of the beneficiaries has special needs, additional planning is necessary and the need for a Special Needs Trust can provide the care they need without jeopardizing government benefits they are otherwise entitled to. A gifting program or a trust can provide for grandchildren and future generations.
Charitable Causes. Women who want to leave a legacy by donating to a favorite charitable, religious or educational organization must complete an estate plan. Without a valid Trust and Will in place, assets will be distributed by the California Probate Code. A charity will not be considered because a charity is not an heir. With proper planning in place proceeds from a life insurance policy can be used to fund various types of charitable giving at your death.
Protecting a Business and Other Assets. Professional women in law, real estate and medicine must be concerned about limiting their liability and protecting their assets from lawsuits. Women who are business owners need to plan for what will happen to their business in the event of incapacity or retirement and death. Due to these issues, asset protection planning and business succession planning can and should be included in the estate planning process.
Married Women. While not always the case, it is common for woman in a traditional marriage to marry a husband who is older, which means they are more likely to become widowed. Without proper estate planning while married, many will see their standard of living reduced during their retirement years. Those in second marriages have an increased need for estate planning, which may include providing for the surviving spouse while preserving distributions to their children from a previous marriage. Without proper estate planning, children from a previous marriage may become disinherited. Also, because most married women survive their husbands, they often have final say over who will ultimately receive the couple’s assets. Women must take an active role in the couple’s estate planning in order to understand the process and be prepared. If there was no participation in the planning process, the widow will likely be confused and uncertain; however, if she completed her planning and/or was involved during the planning during marriage, she will easily understand it and feel empowered.
Unmarried Women. Without a proper estate plan in place at death, her estate will end up in the Probate Court for California law to be applied. Persons who you may have wanted to provide for at death, including friends, charities and unmarried partners will not be among your heirs. For woman who are divorced or separated, there is an important need to update documents (including beneficiary designations) as soon as possible to prevent your ex-spouse from making life and death decisions for you or inheriting your assets.
Should you have questions regarding the need for estate planning and how these issues may affect you, please give my office a call to schedule your Life and Legacy Planning Session. Thank you!