Why women need to have a financial plan and be involved with it ongoing
Why is it so important? Women outlive men on average by 5 years. 9 out of 10 women will be solely responsible for their finances at some point during their lives. So even if you are part of a couple, it is imperative that you participate in your household’s finances. In my next few posts over the coming weeks, I will highlight one area that can significantly impact the financial plans for women.
Estate Planning-This has moved up the to do list for many people in light of COVID 19. It is an opportune time to revisit your documents.
With the increase to the Federal Estate Tax credit, older documents may inadvertently put the majority or all of the assets in the family trust. This may limit the surviving spouse’s ability to access the assets, without justifying the expense or having to ask a third party trustee.
Are you aware that Illinois has a $4 million exemption for estate taxes? It is neither indexed for inflation nor is it portable to the surviving spouse. Review your options to ensure that the first spouse to die will use their full exemption.
Interested in gifting to your children or passing the business on to the next generation? It is a great time to review transfer strategies; given lower valuations of assets and lower interest rates.
If your spouse/partner handles your finances: Do you know where they keep passwords? Do you know how to contact your Financial Advisor, CPA and attorney? Do you know where you have accounts? Do you have access to bank accounts (personal & business)? Do you have access to sufficient supply of cash immediately at their death? Do you know how and when income streams and assets will flow to you?
If your partner/spouse recently died, have you reviewed who will make decisions on your behalf in the event you no longer can? Do they still make sense? Have you discussed your wishes with them?
If you are single, take the steps to solidify your financial plan so you know what next steps you need to take to secure your financial future. If you are in a relationship, do the same and ensure that your plans account for the likelihood that the female in the relationship will be the survivor.