Estate Planning for Women: 4 Key Priorities to Consider
As a woman, have you considered what will happen if you can no longer make your own healthcare or financial decisions? Who will make decisions on your behalf if you are incapacitated or hospitalized for a long period of time? Who will make important healthcare decisions for you if you are unconscious and cannot do so for yourself? If you pass away, does anyone in your family know how you want your estate distributed? Are those wishes in writing and enforceable?
While these are not easy questions to tackle, your heirs can have the answers at their fingertips when you create a legally valid estate plan. A basic estate plan consists of several documents that name agents to make decisions for you when you can’t do so yourself and who must follow specific guidance as to the disposition of your assets after your death. According to Charity Babington Falls, Head of Wealth Planning with The Private Bank at Union Bank, “If you fail to make these decisions while you’re alive and able, state intestacy laws will dictate how your assets are divided among your heirs which is clearly not ideal for most women and especially women with a family.”
It is likely that you would like to benefit your heirs in a different proportion than is laid out in the statutes. You also may want a different person, such as a friend, long-time employee, aging parent, or even a charitable organization, to share in your estate. Without a legally enforceable estate plan, probate courts that oversee intestate succession will instead divide assets as set forth in the law.
“In most intestacy situations, few, if any, intended beneficiaries other than spouses and children will receive anything,” Falls noted. “To ensure your assets such as real estate, business interests, personal belongings, cash and investments are bequeathed as you wish, an estate plan is necessary.”
Taking the following four key priorities into consideration will aid you along your estate planning journey:
1. Plan now
The most important aspect of estate planning is just that—to have a plan in place. Think not only about what you want to happen to your assets when you die, but also how you want things managed if you are incapacitated and can’t make decisions for yourself.
“What many women fail to realize is that an estate plan is as important during life as after death,” Falls explains. “Perhaps you want a specific family member to make healthcare decisions if you are unconscious. Perhaps you prefer a specific child or loved one to decide your care if you become incapacitated and need regular care. All of these scenarios can be addressed in your estate plan.”
Getting started can seem intimidating for some women but having a trusted advisor or wealth manager by your side when creating an estate plan can ease the anxiety.
2. Support without creating dependence
For women, it’s important to think about supporting descendants without creating dependency. “Women with a family often want to give their children and grandchildren a hand up without giving them a handout,” says Falls. Providing an inheritance without discouraging motivation can be a difficult balance. Designing a trust with this in mind while setting expectations through open communication is an important aspect of estate planning.
3. Name an estate manager
For some women, the initial instinct is to name a child as their estate manager or successor trustee. However, it’s important to consider the size of the estate, the types of assets in the estate, and the complexity involved in managing the assets on behalf of all beneficiaries. For complex estates that include business interests, income-producing real estate and other assets that require special acumen to manage, choosing fiduciaries with the skills and time to do so is critical. Even for children who have the business acumen to manage complex assets, parents should consider whether the child wants the job. Perhaps they have their own career and are raising children and taking on the responsibility of managing an estate or trust is more than they want to shoulder.
Naming one child to manage the assets can also create strain and negative family dynamics when one child is called on to manage assets on behalf of a sibling. “The individual will have a fiduciary duty to the beneficiaries, and, at times, it can be an overwhelming job, especially if complex assets are involved,” says Falls. For example, if the estate consists of a portfolio of commercial real estate, is your son or daughter with no real estate management experience the best choice to manage the portfolio, or would a professional trustee with a team of asset managers be a better choice?
4. Stay in Step with Tax Law Changes
Tax laws are in constant flux and can have a dramatic impact on your legacy, so a regular review of your estate plan is critical to ensure you are planning accordingly. Wealth and estate planning is an essential part of the legacy you wish to leave. Though it can be a complex task with complicated tax laws, you don’t have to take it on alone. Partnering with wealth and estate planning professionals can take away the burden, allowing you to stay focused on your daily life. Consult with your wealth advisor and partner with a licensed estate planning attorney and tax advisor to develop a formal plan that is right for you.
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Wills, trusts, foundations, and wealth-planning strategies have legal, tax, accounting, and other implications. Clients should consult a legal or tax advisor.
Union Bank does not create estate plans. Estate plans should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in a client’s state.
This is a publication of The Private Bank at MUFG Union Bank, N.A. (the Bank.) This publication is for genera information only and is not intended to provide specific advice to any individual. Some information provided herein was obtained from third party sources deemed to be reliable. The Bank makes no representations or warranties with respect to the timeliness, accuracy, or completeness of this publication and bears no liability for any loss arising from its use.