Nine Things Everyone Should Know About Estate Planning – Especially Women
It is estimated that between 60-70 percent of Americans do not have a will. Everyone has an estate, and everyone needs a plan. However, estate planning is especially important for women. The following outline notes nine things everyone should know about estate planning and why it is important to make plans now.
1. Estate planning affects women more than men. Women live longer and are more likely to be the surviving spouse. Therefore, women need their assets to last longer than men's, and women are more likely to make the final decisions on distributing assets.
2. The current state of estate planning is fluctuating. Given the situation in Congress regarding legislation on some estate planning issues, this is a critical time to be certain that your estate plan is in place and that it will accomplish what you wish.
3. There are both challenges and benefits to effective planning:
Among your challenges:
- Assumptions that your entire estate can be left to your family – or that you wish it to be
- Tax Issues
- Thinking through the many issues involved in good estate planning
Among the many benefits:
- The peace of mind that comes with having a good plan in place
- Directing your assets and social capital to those people and organizations you value most
- Taking the steps to minimize the costs associated with passing your assets
- Protection of your loved ones
4. Charitable giving can be part of good estate planning. You are probably part of the majority of American households which have made charitable gifts throughout your lifetime. The same reasons you give during your lifetime are the reasons you might consider giving through your estate as well. Every dollar you give to Truett-McConnell College carries your values. Good planning may allow you to redirect tax dollars to charitable giving.
5. Know what you have, and where it is located. Estate planning is an act of love for your family and friends. Part of that act is putting things in place so that family and friends don't have to make decisions with inadequate information at a stressful time. It is also a simple matter of having things in order so that you and others can find needed documents and information on short notice, such as before an unexpected trip to the hospital or a planned trip out of the country. Keeping all relevant documents together are accessible makes it easier on everyone. Make lists. Know who owns everything and how it is owned, where it is located and an idea of value.
6. Create the necessary documents. Besides having a will, you also need to designate power of attorney and health care power of attorney, and you need advanced directives. Whom do you trust to make decisions about your finances, your health care, and your life? Have an alternate as well.
7. You will probably need at least one professional advisor, e.g., an attorney, CPA, financial planner, trust officer, etc. A will is best created by an attorney. Having a poorly crafted will is worse than not having a will at all. Depending on your situation, you may also find that you need to consult with other advisors. Note: When you consult with an attorney, you will almost certainly have to bring up charitable giving because he or she may not do so.
8. Keep your beneficiary designations up to date. Many retirement accounts and insurance policies are distributed according to a beneficiary designation form. These are easily updated or changed as needed, but they should be checked regularly. These distributions are directed by the forms on file, not by your will. For example, your insurance company will not know what your will says, nor consult your attorney, so be sure that your documents are in agreement.
9. Keep your plan updated. Pick a good time to review your plan each year and stick to it. Review it when there is any major change in your assets, your income level, your employment, or your family status. Your plan won't be any good if it is outdated.
A lack of planning can adversely affect families with young children or women who own a business. Women who are single or previously married also have issues that need attention.