Whether you're married, single, divorced or widowed, it’s important for women to plan for what will happen to their assets.
Because women statistically live longer than men, it’s likely many women will be responsible for making key decisions about the future of their family’s wealth.
How can you be ready? Here are five tips to help you with estate planning:
- Take care of yourself first. Many women (and married couples) forget to ensure they will be financially secure if their spouse predeceases them. For example, consider at what age you or your spouse should start collecting Social Security benefits and compare strategies for maximizing the benefit amount. Furthermore, your will and any other estate planning arrangements should be set up to provide enough financial resources for a surviving spouse before passing along assets to other heirs.
- Educate yourself on estate-planning basics.You should know the basics of estate planning long before you actually need them. This means understanding how your assets — and any assets you own jointly with a spouse or someone else — are invested and how to access them. Be aware of any contact information for your financial advisors and the usernames and passwords you might need for online accounts. Also understand basic regulations for passing along wealth, such as annual gifting rules, the federal estate and gift tax exclusion, and any potential state taxes.
- Have a written plan. The best way to make sure your family is financially protected in the event of your or your spouse’s death is to have a written plan. Even if you’re still relatively young, writing a basic plan will force you to think through some key decisions: Who do you want to inherit your wealth? Do you want to leave everything to family members, or would you like to donate a portion of your estate to a favorite cause or charity? If you have younger children, who should be their guardian? Revisit your will or trust ever few years to ensure that it is up to date and reflects your wishes.
- Designate beneficiaries on key accounts — and keep them updated. Chances are, you have accounts such as a 401(k) or an individual retirement account (IRA) that allow you to name a beneficiary for those assets. It’s important that you do so — and keep those beneficiary elections updated — as they supersede those in your will. Review your beneficiary designations at least once a year and especially after major life changes, such as a birth, death, or divorce in the family.
- Consider trusts and other estate-planning mechanisms. Certain trusts can provide you with greater control over how your assets are distributed to your heirs and help you reduce the tax consequences of that wealth transfer.
Your Regions Wealth Advisor can help you evaluate your situation and build estate plans tailored to your needs and long-term goals with a team of experts.
