Regardless of whether you’re single or married, divorced or
widowed, a parent or not, you need an estate plan, particularly if you are over
the age of 60. This is true for men and women, but women face some challenges
that make it even more important to start planning even sooner.
Women typically live longer, they’re more likely to be
custodial parents and they approach retirement differently than men. In
general, women tend to be caregivers – worrying about everyone else but
themselves – but when it comes to estate planning, it’s more important that
they care for themselves first.
If Your Income Depends on Others
One key aspect of estate planning women will often overlook
is what will happen when their husband, parents or other relatives die. According to the U.S. Census Bureau, 36 percent of women 65 and older are widowed,
compared to 12 percent of men 65 and older.
If you are dependent on someone either financially or
emotionally, what happens if something happens to them, if they are disabled or
For example, if a husband starts to receive his pension
payments, but chooses to get the maximum benefit in his lifetime — it means the
benefits will end at his death.
If he predeceases her, she has nothing. However, if she’d
planned for that 20 years prior to his death, there might have been ways to
Here is another common scenario. A businessman with
significant wealth, will often put his business advisers in charge of his
estate plan, rather than his wife and/or children. Yes, the advisers would have
a fiduciary duty to the wife upon his death, but they’d have all the power to
make decisions about what would be sold, how it would happen, and how it was
For a lot of women, the key is to start planning early.
Have discussions with your spouse or family members and set things up with
longevity in mind.
Start talking to your family about what their estate plans
are. For example, if you’re a caregiver for a parent, talk to your siblings and
parents about the potential implications of that: Does your time caregiving
have implications for how your parent’s estate is divided?
Plans Will Vary
Your estate-plan focus will vary depending on your
situation. Are you married or single? Children or no children?
For a single woman without children, the most difficult
decision is going to revolve around who will take care of you, in the event an
illness incapacitates you, and who will make your medical and financial
For married women with children, often the first two
estate-planning concerns are naming a guardian for the children and planning
for income replacement through life insurance.
For women who are widowed, key considerations include making
sure their estate plan has been revised to reflect the husband’s death and to
assess whether there are different financial-planning opportunities and
challenges to consider.
A first step for anyone who’s gone through a divorce is to
check the beneficiary designations on retirement and other financial accounts. Often
people will walk away from their spouse, but then never do any of the cleanup
Women who remarry or those who come to a marriage with
significant assets, should think carefully about their estate plan before tying
Women tend to be hesitant to discuss their net worth going
into a new relationship, but that can be a big mistake. If they keep control of
their assets separately, if they divorce, the new spouse won’t have access to
In Washington, a spouse of someone dying without a Will gets
100% of the Community Property and 50% of the deceased separate property. If
the spouse dies with a Will, the Will language controls. However, not all
assets pass under the Will. Some pass by beneficiary designation (think life
insurance and IRA) and some by joint tenancy with right of survivorship (think
There are a couple of ways to forestall that issue, though
none are ideal.
One tactic is to make sure beneficiary designations on retirement
plans are set such that your children or other heirs inherit — but those
designations need to be in place before you get married. Changing beneficiary
designations after you get married may be difficult, because some
financial-services firms won’t allow changes that entail disinheriting a spouse
without the spouse’s consent.
Another solution is to set up a trust, naming a child or
other relative as the recipient, and put assets into it before you get married.
You can still borrow from the trust, but the husband will not have access to
that money if you die.
Women who remarry should realize that any assets they
brought to the marriage are on tap to pay for the new spouse’s medical bills —
that includes nursing-home care, which can quickly drain one’s resources. It
doesn’t matter whether you’ve been married two days or 50 years, the spouse will
have to pay for medical care. Your assets are going to be on the line for their
medical care, and you can’t get around that.
Women who bring a significant amount of money to a marriage
should consider protecting their assets by purchasing a long-term-care policy
for her spouse, setting up a trust before the marriage, and working with an
attorney prior to the marriage.
Estate Planning is Important
The prospect of estate planning can be overwhelming. The
first hurdle is simply facing the fact of death. The next hurdle is trying to
get a handle on complex topics that are often difficult to understand. Then
there’s the question of finding and hiring an attorney.
No matter what your age or how much money you have,
consider getting these items into place:
- A financial power of attorney,
naming the person who will make money decisions for you if you can’t
- A health-care power of attorney,
naming the person who will make health-care decisions for you if you can’t
- A living will, which will specify
your end-of-life wishes
- If you have minor children, a will
that names a guardian for them
- Beneficiary designations on
retirement accounts and life-insurance policies are up-to-date
- Banking and other financial
accounts have designated your assets as you see fit
- Picking the people who you trust
the most, who will agree about the best course of action concerning your health
care and finances
And finally, it’s not a bad idea to have one person in
charge of your health-care decisions and a different person in charge of your
money. One person may not think it’s a good idea to spend money on
round-the-clock care, whereas the person who has the health-care proxy may see
no problem with that. Try to think through these types of conflicts when making
At Smith Alling in Tacoma, we are always working on ways to help
you. If you are just beginning to think about your planning, we highly
recommend attending a FREE workshop put on by our attorney, Bob Michaels, to learn more about how to start,
and the most important documents everyone needs to have in place.