Women and Estate Planning

By Suzanne M. Rehmani, Esq.

In the past twenty years women have made great steps in the world of business and politics, but in stark contrast, many women still rely on men to handle their financial matters, especially in estate planning. However, in the wake of a spouse’s death or divorce, the wife is usually left in a much more precarious financial situation than their husband would be. The reality is that women need to take a hands-on approach when it comes to planning for their financial future and estate planning.

Consider the following:

• Women live 5 to 7 years longer than men.
• Women earn, on average, 74 percent of their male counterparts.
• Women opt out of contribution pension plans and deferred savings plans, if married, because of the need for current income.
• Women have, on average, smaller pensions and social security benefits due to career interruptions for child birth and elder parent care.

In the long run, the women will be the one to bear the burden of the result of the financial, retirement and estate planning selections made, or the lack of such planning and selections. Therefore, it’s clear that women today must begin making financial, retirement and estate planning decisions and be active, educated participants in the implementation of financial freedom. Here are a few issues to spark action:

Marital Situation: If you’re a single woman, you need an estate plan to give your assets to the people and organizations of your choice. Without a will, the State has a distribution plan for you which may not match your wishes.

Dependents: Are people (children, grandchildren, elderly parents) financially dependent on you? If so, what provisions have you made for their care if you should die before them? Have you clearly identified who will care for your children in the event of your death?

Joint Tenancy: Do you and/or your spouse own property as joint tenants with another person (s)? If so, this arrangement may keep your children from inheriting that property? Moreover, owning property as joint tenants with your spouse will reduce probate expenses but it may cause you to pay more in estate taxes than necessary in California, which is a community property state. 

Change In Marital Status: Have you become widowed or single through divorce? If so, you should make sure your estate plan still meets your needs. If you are now divorced and the plan was executed jointly with your former spouse, the entire plan is now null and void by virtue of the divorce.

Long-Term Care: Have you made provisions in case you need long-term care? Do you have a living plan in the event you need assisted living or any other arrangements?

Women need to address these issues for themselves. If you are married, you should discuss them with your spouse so that you have a clear understanding and a mutual agreement about what will happen if you are left alone. If you’re still a young woman, you have the advantage of being able to begin planning for retirement at an early age. Most young women today can expect to have less than a third of their final earnings made up by employer-provided benefits, depending on these benefits. Therefore, starting your own retirement savings will not only give you a more financially secure retirement, it will also provide the freedom to change jobs without jeopardizing your retirement. As always, consult an estate planning attorney and financial planner for the proper advice.

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Suzanne M. Rehmani is an attorney in the Business and Estate Planning/Probate Department of the law firm of Kring & Chung, LLP. For more information or with questions regarding real estate law, please contact Ms. Rehmani at (949) 261-7700 or via email at srehmani@kringandchung.com

** The information contained herein is for informational purposes only and should not be relied upon in reaching a conclusion in a particular area. The legal principles discussed herein were accurate at the time this article was authored but are subject to change with time. Applicability of these same legal principles may differ substantially in individual situations. Please consult an attorney before making a decision in a particular area using only the information provided in this article.