Why Estate Planning for Women is more Important than ever Before
As women in today’s world are handling so many things and have so much to do than ever before, sometimes they may not pay adequate attention to what might happen to their assets in the event of incapacity, disability or death. Women put off estate planning for various reasons such as the belief that their healthcare needs are not an issue at present, that their assets are minimal, that their spouse already made a will, that if they die without a will their spouse will inherit, that it is too expensive or because they have already named their children as joint proprietors of property or bank accounts. Some women just believe that their family will handle everything after their incapacity or death. It is important to note however that family do not have automatic rights to deal with the assets of an individual and that formal arrangements will still need to be made. A woman should plan her estate to ensure her own financial security during her lifetime and that of her children, spouse or other family members and to ensure that her assets are distributed according to her wishes upon her death.
Why you should consider doing it:
- Women are living longer than men which means that they will not only be in charge of disposing of their assets but also their spouse’s assets if married.
- Women are at risk of declining mental and physical health due to longer life expectancy.
- More women are getting divorced or choosing to stay single.
- Women may still have minor children at the time of incapacity or death and they would need to ensure they are taken care of by a person or persons of their choice.
- Women increasingly have more assets. They are professionals in the workforce earning more than ever before, they are business owners, entrepreneurs and they may be inheriting twice, once from their parents and then from their spouses.
- Women and their spouses can plan their estates together to have a consolidated plan reflecting shared goals.
- Women can make sure that their assets go to the people they want and some of the assets such as IRAs and 401(K) accounts may not be subject to probate if they have designated beneficiaries.
- Women can make certain that, in the event of incapacity or disability, their assets are able to provide for themselves and their family during their lifetime.
What can happen if you don’t plan:
- Family disputes may arise due to conflicts over healthcare decisions or inheritance squabbles.
- In the event of disability or incapacity the Court may appoint a guardian to control your finances and make decisions about your medical care.
- The Court may also appoint a guardian to oversee the care of any minor children
- In the event of your death, your estate will be divided by the State laws governing intestacy as you would not have left a Will which would have given effect to your wishes as to the distribution of your assets meaning that you would not have a say as to who would be your beneficiaries.
- The birth of a child, a divorce, re-marriage or death of a spouse may affect the way in which your assets may be distributed.
- Probate may be costly and there may be debts and other liabilities attached to the estate so that the Personal Representative may be forced to sell assets at low prices to pay estate liabilities.
You should be aware of the most important documents in estate planning which are:
- Last will
This document will give effect to your wishes as to how your estate is to be distributed, who is to be in charge of the process (Personal Representative), and arrange for the needs of your children after you die such as appointing a guardian for minors. Remember it must be correctly executed by being signed in the presence of two independent witnesses and should be kept in a safe place as the Court would require the original to begin the probate process.
- Durable Power of Attorney
This is a legal document in which you give a person the power to act on your behalf in limited or broader circumstances concerning your finances, property or healthcare. For instance, they may be granted the power to access your bank accounts for the purposes of doing things such as selling property, giving gifts to others or paying your medical expenses. A Durable Power of Attorney would remain in effect during your lifetime even if you are incapacitated.
- Advance Healthcare Directive
This consists of the following:
The Living Will which informs people of your wishes regarding end-of-life decisions. It is invoked when you are unable to make decisions for yourself because, for example, you have a terminal condition or are in a persistent vegetative state. This document will inform your family and medical staff about whether you want to maintain life support or just receive comfort medication. The Living Will will override a Healthcare Surrogate’s decision if the Healthcare Surrogate says something contrary. So, it is important to have a Living Will along with a Healthcare Surrogate designation.
The Healthcare Surrogate and HIPAA which can be separate or joined. The Healthcare Surrogate document is to appoint a person to make medical decisions for you in case you are determined unable to make them yourself. You can also name an alternate surrogate in case your choice is unavailable. The HIPAA form allows medical staff to share your private medical information with another person so that informed decisions can be made about your treatment.
Fiduciary documents that allow someone (the Trustee) to hold assets on behalf of a beneficiary or beneficiaries. They are useful to provide for minor children or if you have a dependent that needs to be cared for after your death. There are many different types of trusts to consider when planning your estate such as living trusts, testamentary trusts, irrevocable trusts and irrevocable ones so it is best to speak with a lawyer to see which are best for you.
If you are considering an Estate Plan, contact an experienced lawyer today. It’s your best option to help ensure your future and the future of your family.