Comprehensive Estate Planning Tips for Women
What Women Need to Know About Estate PlanningEstate planning is critical for every person, but women in particular face challenges that make preparation essential to avoid hardship in later years. At slnlaw, we are fully conscious that estate planning is an issue affects both men and women, but we also know that there are issues that, at least statistically, affect women and their estate plans differently from men.
Below are some things women ought to consider when thinking about their estate plans. |
We're Here to Help.OR
|
Women Are Likely to Outlive Male Spouses
The average life expectancy for women in the U.S. is 80.1 years. For men, it’s 73.4 years. Also, women are more likely to marry older spouses, only increasing the chances that they will be the surviving spouse. This means both retirement and estate planning is more likely to have a direct effect on a woman’s later years.
It’s important to plan in advance, well before retirement. Here’s an example of why: if the woman’s spouse has a pension, they may be able to choose if they should take the higher payments or allow the pension to continue for their wife after they die. The couple should decide together which option to choose so both parties can understand how it will affect both their retirement income and the surviving spouse’s benefits after the pensioner dies.
Also, paying attention to estate planning while both spouses are alive can be a lifeline to the surviving spouse (again, most often the woman) in terms of avoiding a large estate tax hit in the aftermath of a spouse's demise. Specifically, due to allowances like the unlimited marital deduction, there are tax saving strategies women can utilize to reduce estate taxes on their spouse’s assets after they pass on by essentially pooling both spouse's $2 million exemption. This can mean the difference between liquidating hard assets to pay the state and maintaining a home and financial security in the transition. Though it can be a sensitive issue to discuss while both spouses are alive, every scenario should be considered in an estate planning session with an attorney.
It’s important to plan in advance, well before retirement. Here’s an example of why: if the woman’s spouse has a pension, they may be able to choose if they should take the higher payments or allow the pension to continue for their wife after they die. The couple should decide together which option to choose so both parties can understand how it will affect both their retirement income and the surviving spouse’s benefits after the pensioner dies.
Also, paying attention to estate planning while both spouses are alive can be a lifeline to the surviving spouse (again, most often the woman) in terms of avoiding a large estate tax hit in the aftermath of a spouse's demise. Specifically, due to allowances like the unlimited marital deduction, there are tax saving strategies women can utilize to reduce estate taxes on their spouse’s assets after they pass on by essentially pooling both spouse's $2 million exemption. This can mean the difference between liquidating hard assets to pay the state and maintaining a home and financial security in the transition. Though it can be a sensitive issue to discuss while both spouses are alive, every scenario should be considered in an estate planning session with an attorney.
Women Do Not Earn as Much
Over the course of a lifetime, women do not earn as much as men. According to research conducted by the National Women’s Law Center, women in the U.S. lose $403,440 over the course of a 40-year career, and this figure is not adjusted for inflation. The effect accumulates over a lifetime, and can substantially reduce a woman’s ability to take care of herself through retirement, particularly coupled with the loss of income if the woman outlives her spouse. There are state and federal equal pay laws that try to mitigate these issues, but in planning for the future it is important to remember that the wage gap does exist, and can seriously affect a woman's financial security if she outlives her husband by many years.
There are additional statistics that contribute to a woman’s critical responsibility to plan for herself and her loved ones. For example, five out of six women gain sole custody of children in a divorce. Child support notwithstanding, both divorce itself and the primary responsibility for children can add additional strain to the financial picture.
While laws continue to be enacted to remove the wage gap, the fact remains: retirement and estate planning is an essential action to take for women who plan to independently rely on themselves for income in their later years.
There are additional statistics that contribute to a woman’s critical responsibility to plan for herself and her loved ones. For example, five out of six women gain sole custody of children in a divorce. Child support notwithstanding, both divorce itself and the primary responsibility for children can add additional strain to the financial picture.
While laws continue to be enacted to remove the wage gap, the fact remains: retirement and estate planning is an essential action to take for women who plan to independently rely on themselves for income in their later years.
Women May Be Underinsured
According to a 2023 survey by Mutual of Omaha, despite the increasing importance of women's wages and salary in the average family, only 37% of women, compared to 50% of men, carry sufficient life insurance to replace their income. This means that if you do not have a working spouse, or a spouse at all, your loved ones may be left with less of a safety net if something happens to you. They may also face a cash crunch, as probate assets need to wind their way through the probate process, while life insurance proceeds are available to beneficiaries almost immediately.
If possible, women should review their life insurance coverage and make sure if is sufficient to provide for their loved ones. Sometimes age and/or medical status make this impracticable, however. In that case, a conversation with both an estate planning attorney and a financial planner could be in order to make sure that everyone is taken care of.
If possible, women should review their life insurance coverage and make sure if is sufficient to provide for their loved ones. Sometimes age and/or medical status make this impracticable, however. In that case, a conversation with both an estate planning attorney and a financial planner could be in order to make sure that everyone is taken care of.
Your Spouse's Reproductive Years May Outlast Yours
This is simply biology. If you are a woman married to a man, there will come a point where you can no longer bear children but there is no similar age limit for your husband. Why does this matter in estate planning? If a woman is the first to pass, and her estate plan assumes that assets left to her husband will eventually be passed on to their children, there is a non-trivial chance that the husband may remarry and have other children. In that case his motivation to protect all of your marital assets solely for the benefit of your children may be far less.
This means you should consider in your estate plan creating some kind of trust that guarantees your children are first in line for your assets when you ae both gone. We recommend this for all couples with children, but it is of particular concern for women.
This means you should consider in your estate plan creating some kind of trust that guarantees your children are first in line for your assets when you ae both gone. We recommend this for all couples with children, but it is of particular concern for women.
Why an Estate Plan Is Essential for Any Surviving Spouse- Male or Female
An estate plan plays an important role in the well-being of any surviving spouse, whether male or female. In addition to the very real issues surrounding income and protecting family assets from estate taxes, there are other considerations as well. For example, you may not automatically have a healthcare proxy or a durable power of attorney, so creating or updating these documents after a spouse dies can relieve confusion and indecision amongst family members.
If a you outlive your spouse, you are also the one solely responsible for how assets are distributed in the family- mostly likely the deceased spouse will have left all or most of their assets to you, who then has to be the final say in how those assets are distributed when she is gone. You are also the one solely responsible for planning for the possibility of your own serious illness or incapacity, without a spouse to take care of the home and other affairs if you need nursing home or long term care.
An estate planning session with an expert in the field can reveal ways to avoid taxes and ensure the recipients receive the maximum benefit after their death. It can also help you understand how to strike a balance between the assets you need to keep liquid in order to support yourself and strategies like irrevocable trusts to preserve assets for your children should you need to enter a nursing home in the future, or need to move assets out of your own estate for tax planning purposes.
If a you outlive your spouse, you are also the one solely responsible for how assets are distributed in the family- mostly likely the deceased spouse will have left all or most of their assets to you, who then has to be the final say in how those assets are distributed when she is gone. You are also the one solely responsible for planning for the possibility of your own serious illness or incapacity, without a spouse to take care of the home and other affairs if you need nursing home or long term care.
An estate planning session with an expert in the field can reveal ways to avoid taxes and ensure the recipients receive the maximum benefit after their death. It can also help you understand how to strike a balance between the assets you need to keep liquid in order to support yourself and strategies like irrevocable trusts to preserve assets for your children should you need to enter a nursing home in the future, or need to move assets out of your own estate for tax planning purposes.
How We Can Help
At slnlaw, we understand the unique challenges women face in estate planning and are dedicated to providing tailored solutions that ensure your financial security and peace of mind. Our experienced attorneys will work closely with you to create a comprehensive estate plan that addresses your specific needs, from minimizing estate taxes and protecting family assets to preparing for long-term care and healthcare decisions. Let us help you navigate these complexities and secure a stable future for yourself and your loved ones. You can use the button below to schedule a free information call, or give us a call at (781) 784-2322.
Meet Our Estate Planning Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna wrote a book on estate planning: The Road to Peace of Mind: What You Need to Know About Estate Planning. Jenna has helped many individuals and families with planning to protect their legacies and loved ones, and planning for the future and succession of their businesses.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and earned her LLM in estate planning from Western New England Scool of Law in 2016. She has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped many clients with planning for their legacies and their future, and navigating the probate process in Massachusetts after the death of a loved one.
|
|
|
|
|
