Estate and Wealth Planning can be hefty processes that can hold back many women from securing their future. It is no secret that we live in a complex world with an immense list of responsibilities, which, quite frankly, can lead us to lose sight of essential tasks that need to be completed. Although women may view planning as complicated, having a detailed plan to account for accumulated wealth is key to securing your financial future.
As opposed to societal norms decades ago, women nowadays are more interested in becoming financially independent, and therefore, want to make sound financial decisions. Not only do women consider themselves when planning their financial future, but also their children, potential entrepreneurial ventures as well as their preferred retirement age and a myriad of other factors. So, what exactly is it that’s holding women back from actively investing in planning for their future? After all, women do tend to outlive their spouses, and thus, will likely end up managing the wealth that gets passed down. Is it a lack of time from living a working lifestyle? Some say it’s a fear of the complicated process of financial and estate planning. Others put the blame on lingering credit card debt or a general lack of financial literacy.
Fortunately, recent polls indicate that a wave is approaching of women looking for a new way to be involved and be serviced by the financial industry – particularly with the goal of building a trusted relationship with the whole family about financial status and eventual estate distributions. Technicalities aside, the best wealth plans are flexible, living documents that are reviewed and updated frequently and that allow for life to play its course.
Of course, a key part of a secure financial and estate plan is having good investments which one day should hopefully provide the investors with a significant return. Being relatively new to the realm of finances, it is not uncommon for many women to feel lost at sea when it comes to making sound investments. One of the most important things to remember is to not overcomplicate; whether investing by yourself or with an advisor, make sure to consider investing in what interests you and what you support, whether financially or emotionally. Reflect upon your values and make sure that your assets are invested accordingly.
On another note, no long-term plan is complete without a properly structured estate plan with clear indications regarding how assets are to be divided when the time comes. Creating an estate plan is not as daunting as it sounds and can be completed in a few steps. While some estate plans can be effectively completed without professional help, we highly recommend you consult with a professional estate attorney who can guide you through the rough legal waters of estate planning. Below is a brief description of the process that you should be familiar with when thinking about drafting an estate plan.
Firstly, you should gather any documents that are relevant to your estate, such as any bank accounts, retirement plans, life insurance policies, property information, and other similar documents. This information will come in handy when creating a will and further legal documents during the estate planning process.
Secondly, once you decide on an attorney, it’s time to create a will. Wills are legal documents that provide instructions on how your property and custody of children should be handled after you pass away. Regardless of your financial situation, you should definitely create a will; it will help your family avoid a ton of headaches when the time comes to distribute your assets. Your estate plan should also include a living trust if you own real estate. If you have a living trust, your estate will likely avoid probate which can save you a good sum of money.
Additionally, creating a Durable Financial Power of Attorney is essential because it appoints a trusted individual, perhaps a family member or friend to manage your finances in the event you become incapacitated and are unable to handle these matters on your own. You should also appoint a Health Care Power of Attorney which allows a trusted individual to make decisions regarding your health if you are again incapable of making these decisions yourself.
Lastly, designating beneficiaries is an essential step during the estate planning process. By naming beneficiaries for bank accounts and retirement plans, the assets will skip the probate process and will be transferred to them directly.
There is little doubt that financial and estate planning can certainly be intimidating for people new to the financial world, including both men and women. However, as more and more women are becoming financially independent and thus, financially literate, it is important that they take the right path when it comes to having solid and properly structured long term financial and estate plans.