When we think of estate planning, we often have in mind the image of an older well-dressed couple situated amidst the trappings of accumulated wealth. Images of winged back chairs in front of the fire or the stately columns supporting the front portico or, perhaps, the charming cottage on the Cape at sunset come to mind. However, reality shows us that this image can easily be replaced with one of a vibrant and savvy single women, who is forging a successful career and celebrating the freedoms that abound in the single life.
While women have come a long way over the past few decades with regard to business and politics, it might amaze you to know that only about one-half of single American women—or any Americans for that matter—have a will or a trust.
Women who have become single by virtue of divorce often leave their estate plan, as previously handled by their ex-spouse, to remain unreviewed by an estate planning attorney and unchanged to accommodate their new lifestyle. This leaves women exposed to a myriad of problems including paying estate taxes that could have been avoided, and having someone other than a first choice administer assets should she become incapacitated or die.
If you are one of said single women, listen up: It’s about time single women took charge of their destiny.
Being single means you are solely responsible to direct how you manage your assets. Your assets are anything of value that you own. Even if you don’t have vast wealth at this time, most of you have a few items that you would like to pass along to people who are special to you. Hence, you have the very beginning of the need for an estate plan.
If you have trouble immediately comprehending the unsavory topic of dying, try the possibility of not dying but rather being involved in a serious accident or developing a debilitating disease of some sort. Think of the possibility of being incapacitated, either temporarily or permanently, and needing someone to handle your financial and personal matters in a manner that is in sync with your wishes. This scenario represents just another aspect of estate planning. With a proper estate plan in place, you will have already appointed someone you trust to represent you and carry out your specific directives regarding the handling of matters while you are incapacitated. Without a proper estate plan in place, the Court will make those decisions for you, including who will be the guardian of your minor children if that issue applies to your situation. If you happen to be the caregiver for aging parents, you need to further plan for their continuing care and the management of their individual finances as well.
Many single females in America fail to address the importance of estate planning because they are of the opinion that they don’t have enough of an estate to worry about right now. Being the savvy businesswoman that you are and probably in possession of a small portfolio of your own, the Standard and Poors index has experienced an average increase of somewhere around 10.4% annually since the 1920s. Based on that figure, your portfolio should double about every seven years. (And you thought you shouldn’t be worrying about estate taxes!)
Now is the perfect time to implement an estate plan that will help you to minimize estate taxes and preserve the legacy of your future accumulated wealth. Why make sound investments only to lose a substantial amount to taxes due to poor or non-existent estate planning?
Are you the entrepreneurial type who owns a business? A well-written estate plan will set forth specifically who will receive control of your company if you become incapacitated or die. You need to plan who will be the recipient of delicate assets such as business “secrets” and other private documents. You should plan and direct to whom sensitive information should be revealed (safety deposit box information, payroll information, off-shore account information, codes and passwords for your business accounts). These are “intangible” assets but planning to share this information with a person you trust implicitly can assist your business to grow and prosper during your period of incapacity or after your death.
Finally, for you single women, who are thinking of changing that status, please remember that the “p” word (the dreaded prenuptial agreement) is also an essential part of estate planning. While many think this takes the “romance” out of romance, given the statistics that about one in three marriages ends in divorce, it is better that you go into the marriage with eyes wide open and cards on the table. Romance is emotional, marriage is financial.
A prenuptial agreement and all the preliminary discussions that precede its final documentation help to ensure the financial well-being of the union. The history of prenuptial agreements goes back thousands of years when royal families of European and Far Eastern cultures made specific provisions for protecting their wealth. The same issue prevails in our modern society. You should consider a prenuptial agreement if, prior to the marriage, you own your own home, have a stock portfolio or a retirement account. If you own a business, a pre-nup is of the utmost importance. Factors such as receiving an inheritance, having children from a previous marriage, being wealthier than your intended, caring for an elderly parent, or anticipating a large increase in your own earning capacity via the pursuit of a degree/license or business surge add up to one important message: Initiate a prenuptial agreement so that you are in control of your financial destiny. Likely your intended will appreciate your honesty, openness and business acumen.
Take control of your destiny now. With the help of an estate planning attorney, you can easily put your affairs in good order, have a well-written and well-planned course of action, and then you can take a deep breath and enjoy the peace of mind that comes with the knowledge that your legacy will be carried out precisely to your specifications.