Estate planning for women is important, whether you are single, married, or living with a partner. With many more women serving as breadwinners for their household, getting divorced, or living with a long-term partner, it is more important than ever for women to be informed and educated regarding the ins and outs of estate planning. In this article, we discuss three things women should know about estate planning.
Women Live Longer
In a traditional household, women usually outlive their husbands because 1) on average in the U.S., wives are 2-3 years younger than their husbands, according to the US National Library of Medicine of NIH and 2) women live longer than men. In fact, women outlive men by about five to six years, according to Scientific American. As such, estate planning is important to understand, and to actively participate in the decision making process, because there is a good chance women will be around for seven to nine years after their husbands pass away. Moreover, everyone benefits from having a well-crafted estate plan.
Estate Plan Basics
The most basic and essential part of an estate plan is a simple will. A will is essential for distributing assets to beneficiaries, establishing your last wishes, creating funeral and burial arrangements, establishing guardians for minor children, and much more. Every estate plan must include a will, and each spouse needs his and her own will. Without a will, your assets will be distributed according to state law. In Maryland, that likely means that your parents and any children will automatically receive benefits from your estate. An unmarried partner will be entitled to nothing, without a will or trust. Blended families, in particular, may benefit from a Trust, instead of a standard will.
Blended families often result when two people both have children from a prior relationship; but will your children or step-children receive their fair share of assets after your death? Not without a will or trust! Estate planning for women is especially important to ensure that your children are provided for and to formalize your intentions with a will or trust. In some cases, a husband or spouse can pass assets to their own children, their step-children, or grandchildren. Many women are unaware of the implications of simply being married without a will, so be sure that you discuss your unique situation with the lawyers at Frame and Frame to receive personal legal guidance if you are in a blended family.
Three Types of Trusts That May Benefit You
There are many different kinds of trusts that can be used to set yourself and your loved ones up for financial success. Below are three common types of trusts:
- Revocable Trust—Used to distribute assets to beneficiaries, revocable trusts can be modified during the grantor’s lifetime. Revocable trusts can be used to avoid taxation and probate, and are also a great tool for minor children, as a trustee can be established to control the funds until a designated time, such as the child’s 25th birthday, for example.
- Long Term Care Trust—Women spend more time in long term care than men, and most Americans will spend at least some period of time in long term care. A long term care trust is used to spend down your assets (and keep them at the same time) so that you can qualify for Medicaid—the federal program that helps seniors pay for long term care in nursing homes and assisted living facilities.
- Special Needs Trust—If you are a mother to a child with special needs, the thought of your adult or minor child being denied federal healthcare and benefits after you pass away is daunting. Yet, this often happens when parents bequeath their estate to their special needs child, thinking that they are setting him or her up for financial success. Instead, those assets make the adult child ineligible for Medicaid and Supplemental Security Income. A special needs trust allows the funds within it to be made available to your adult child, while also keeping them eligible for federal and state run social programs.
Reach Out to a Maryland Estate Planning Attorney Today
Estate planning for women is an important subject. Contact the experienced Maryland estate planning attorneys at Frame & Frame to get started on your estate plan. To schedule a consultation today, call 410-255-0373. You can also check out our free estate planning guide for additional information about the dos and don’ts of estate planning.
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Marriage and Life Expectations (Max Planck Institute)
Marriage and Life Expectancy (US National Library of Medicine of NIH)
Why Women Live Longer (Scientific American)
Three Most Common Estate Planning Mistakes To Avoid (Frame & Frame)