Special Considerations for Women When Estate Planning

Let's start by acknowledging that estate planning is incredibly important for every adult person in America.  No matter what level of wealth, or lack thereof, and no matter what your gender, marital status, or age, if you are an American over the age of 18, you should have at least basic estate planning in place.  By "basic estate planning" I simply mean the collection of documents that establish what will happen to you, your family, and the things you own if you become unable to make your own decisions ("incapacitated") or upon your death.

According to the Center for Disease Control's National Vital Statistics Report, American women live on average 4.8 years longer than American men.  Because women typically outlive their spouses, their estate planning documents are usually the ones that actually determine what happens to the family assets.  However, the longer life span of women also means that women are more likely to experience a period of time at the end of their lives when they are unable to make their own decisions because they are incapacitated due to some medical condition.

A typically longer life span means that the legal and financial planning in place for women (or the lack thereof) usually has a larger impact than the legal and financial planning in place for men.  This is a general statement with many exceptions of course, but one that my team and I have seen play itself out many times in our office.  An issue that further complicates things is the fact that women typically still earn less income than men both during their lifetimes and during retirement.  This can lead to an insufficient amount of income for a woman to survive on during the later years of her life.  This occurs because a deceased husband's income through things like social security, pensions, or annuities may be largely or completely eliminated for the surviving widow.

All of this means that women are more likely to need to turn to programs like Medicaid to pay for their care in the later years of their lives.  Estate planning should always take into consideration the likelihood that a woman will need programs like Medicaid, and what steps may need to be exercised well in advance of applying for that program in order to ensure eligibility for it.

Another reason solid financial and legal planning is so important for women is that whether right or wrong, women still tend to be more directly involved than men, on average, with the care and support of other people in their lives (friends and family) and with the support of important causes (charitable or community interests). Without proper planning in place, a woman's ability to provide for these important people and organizations in their lives will be greatly diminished.

The Pew Research Center reports that about 52% of divorced or widowed women will remarry during their lives.  A second marriage adds complications to legal and financial planning for women.  The obvious issues include how resources that each person brings to the second marriage will be characterized (are they separate or community property), and how will the children from each spouse be provided for in the estate planning of the newly remarried couple?

Another common issue we see at our firm is that divorced and widowed women have not updated their beneficiary designations on assets like life insurance and retirement accounts. This can lead to some terribly unintended consequences upon their deaths.  In general, if a woman has usually left the legal and financial decision making to her husband throughout life, she will be unfamiliar and unprepared for the types of decisions that need to be made if her husband dies before her or if they become divorced.

The good news is that every woman can put herself in a much better position to be sure that her best interests and her goals are attainable under any of the circumstances that life may throw at her.  Every woman deserves to have that confidence and getting these important documents in place is typically easy to do. Some law firms, such as my own, will offer you a free consultation to come discuss these topics and even review any of your existing documents to be sure they will accomplish your desired outcome.

This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.