Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you protect everything you love — family, friends and favorite charities. For more information, be sure to visit our website where you can explore details about Vick Law, P.C.
Estate planning is different for women, who tend to live four to five years longer than spouses. They are more likely to devote years away from the workforce, while raising families and caring for aging parents or relatives. While so much of women’s lives are devoted to others, its important for women to protect themselves with planning for the future, including planning for incapacity, taxes, and the distribution of assets after death.
The Biggest Mistake Women Make in Estate Planning
No one wants to contemplate their own death. However, failing to plan for death or incapacity is the biggest estate planning mistake. Once a person is incapacitated, they cannot create or sign legal documents. The time to create or update an estate plan is when you are still healthy and of sound mind.
Planning for Incapacity for Self and Spouse
Americans are living longer. However, with longevity comes an increased likelihood of mental and physical decline in one’s later years. A General Durable Power of Attorney appoints an agent to manage your legal and financial matters in case of incapacity. A similar document, Healthcare Power of Attorney, is needed for an agent to take charge of your medical care. Every adult woman also needs a HIPAA release form, so her designated contact person can interface with health insurance representatives and medical providers.
How Estate Planning Intersects with Tax Planning
Women who outlive their spouses often become the sole beneficiary of the estate. Taxes may not be an issue on the death of the first spouse. However, the death of the second spouse may trigger federal estate taxes, state estate taxes and/or inheritance taxes. Trust planning by married couples may alternatively allow the surviving spouse to enjoy lifetime access to the trust assets, while minimizing or eliminating such eventual taxation for heirs.
Blended Families Require More Attentive Estate Planning
Women in second marriages with children from a prior marriage need to protect their children from being accidentally disinherited if they predecease their current spouse and have left their estate to their spouse. Some states allow a surviving spouse to take an elective share of the deceased spouse’s estate, regardless of the terms of their estate plan. There are states where the elective share includes only the probate estate. In contrast, in other states, it applies to the “augmented” estate and includes revocable trusts, life insurance policies, or other assets that are otherwise transferred by beneficiary designations.
Special Estate Planning for Single Women
Single women need an estate plan, regardless of the size of their estate, to protect themselves in case of incapacity and to settle their affairs after they pass. Start by identifying a person you trust completely and who lives nearby. The best candidate may be someone younger than you, perhaps a niece or nephew. Talk with them about whether they are willing to take on this responsibility.
Estate Planning Throughout Life
Mothers of minor children need a last will to nominate a guardian, while senior women need documents to prepare for incapacity and may need trusts to protect assets. Regardless, the protection afforded by a well-designed and properly maintained estate plan works at all stages of a woman’s life.
Schedule a free consultation with Vick Law, P.C. today to create a plan that best fits your needs.
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