Whether you’re single or married, divorced or widowed, a parent or not, you need an estate plan. That’s true for men and women, but women face challenges that make it even more important for them to start planning sooner rather than later. It’s not that there are different estate-planning tools for each sex. But women are likelier to live longer, they’re likelier to be custodial parents and, speaking generally, women often approach the topic differently than men.
“Estate planning is different for women and men, but not because of anything technical. It’s different because of the psychologically different way that women approach the process,” said Patricia Annino, attorney at Prince Lobel and author of “Women and Money: A Practical Guide to Estate Planning.” “Women spend all their time taking care of everybody else,” she said. In the process, she said, they forget those flight-attendant instructions. “You must put the mask over your own face first.”
What Happens If…
One key aspect of estate planning that women often overlook is what will happen when their husband, parents or other relatives die. Consider this: 36% of women 65 and older are widowed, compared with 12% of men 65 and older, according to the U.S. Census Bureau. “People that you are depending on either financially or emotionally: What does it mean to you if something happens to them, if they are disabled or die?” Annino said.
She cited the example of one of her clients: The woman recently found out that when her husband started his pension payments, he chose to get the maximum benefit in his lifetime — a choice that means the benefits will end at his death. “When he predeceases her — and he just had a stroke — her income goes to zero, because they’re living off of his income and it ends with him,” Annino said. “If you knew that 20 years ago, you might try to plan for that.”
Another of Annino’s clients, a wealthy businessman, came into review his estate and business-succession plan. He was leaning toward putting his business advisers in charge of his estate plan, rather than his wife and three adult daughters. Annino advised him to reconsider.
If the advisers are in charge, the wife “would be absolutely at their whim,” Annino said. “They’d have a fiduciary duty to her, but they’d have all the ability to make all the decisions about what got sold, how it happened, how it was valued.” She added that the wife made a mistake in not joining her husband at the meeting. “She knew where he was going,” Annino said. “She failed to understand that it was about her.”
For a lot of women, Annino said, “The keys to the kingdom are on the table and they just don’t understand that and they don’t pick them up.”
Start talking to your family about what their estate plans are. This doesn’t apply solely to married women. 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? A woman “can start a conversation that makes them put their planning into place,” Annino said.