Compliments of Our Law Firm,
Written By: Roger N. Levine, JD, LL.M, CPA
There was a time when women stayed home, cooked, cleaned, and had babies. No one reading this article was around during those days. Today we have gender equality and many of us even probably know a stay-at-home husband. However, there still are differences and one area women should be concerned about involves estate planning.
Why is Estate Planning Important for Women?
The insurance companies tell us that women have a longer life expectancy than men. Therefore, it is often the women who decide the ultimate estate plan, i.e. where the family wealth ends up. Let’s examine some of the excuses that women believe to be a bar to engaging in proper estate planning.
Excuse A – I Don’t Have Enough to Worry about Estate Planning
Bah-humbug. If this was ever a legitimate excuse, it certainly is no longer such. Perhaps during the time when a woman got married and assets were held in the husband’s name, this was true. However, in today’s modern world, we see that women own assets independently as well as owning them jointly with their husbands. Obviously today it is important for women to engage in estate planning since they not only have acquired their own wealth but upon marriage, in many situations, now own half of their husband’s wealth. Your estate may be worth more than you think. The value of assets you own is not the only criteria for estate planning but the use and protection of such assets after you are gone is the key to the true value of a legacy. In situations where you feel you have a small estate, it may be more important to protect your assets in the event you or your husband need to qualify for Medicaid to pay for long-term custodial needs.
Excuse B – Since My Property is Now Jointly Held, it will Simply Pass to the Survivor
Traditionally real estate was held as joint tenants with rights of survivorship (“JTWROS”), but now almost all assets can be held that way. This is sometimes known as an estate planning shortcut because it avoids probate on the death of one of the owners. However, it is sure that the second owner will also die and this shortcut only avoids probate on the first death, if avoidance of probate was a goal. Many assets do not lend themselves to JTWROS in any event. Clearly, estate planning must include what happens on the second death as well as what happens for assets which are not held as JTWROS. If spouses hold assets as joint tenants, this is not a situation that would avoid the use of all of these assets before Medicaid would apply to a nursing home situation.
More importantly, joint ownership will not protect your descendants in the event your husband survives you and remarries. In the 21st century, remarriage is certainly not frowned upon and seems to be quite an ordinary situation. In your marriage where you had control, do you think the next spouse would have less control? Surely, estate planning is mandatory.
Excuse C – I Will Do Estate Planning When I Get Older
If you could tell me when you’re going to die, I could tell you the exact time to start estate planning. In all other situations, it is never too early and you are never too young to begin a comprehensive estate plan. By the way, what if you don’t die but become incapacitated to the extent that you cannot handle your finances or even medical decisions on your own. And what if contrary to all expectations, you do not get married and need to plan for your retirement. These situations of course mandate comprehensive estate planning.
If you are married, you are still never too young to do estate planning. It is imperative that should you have children and something were to happen to the two of you, the proper person be named as the guardian (physical caretaker) and trustee (financial caretaker) of your minor children. If your children are in their teens, it may be advisable to provide protection of your assets for their eventual use regarding health, education, maintenance, and support. You may already know that a child is a spendthrift. In such case, you may want to prevent the child from dissipating his or her inherited assets before those assets have actually benefited that child the way you have intended.
Estate Planning for Women – We Are Not Kidding!
As you can see, it is important for women to have an estate plan. Women earn substantial salaries, earn significant retirement plan assets, and in some cases, receive expensive gifts. These must all be a part of a formal estate plan. As noted above, statistics tell us that women will be more likely than their husbands to determine who and under what conditions the family wealth will pass. It is time to get started by contacting an experienced estate planning attorney in your area.