An estate plan is never too early for a woman to protect herself against financial risks. Women can and should think beyond estate planning for retirement to meet financial challenges such as being a single mom, possible remarriage, or widowhood. Well-known considerations are longer life spans coupled with lower salaries. Economic uncertainty and tax law changes also strongly support women and estate planning. We'll discuss the top three reasons for having an estate plan and how trusts help protect against financial risks.
Women marrying for the first time or remarrying can heed the warning in Kiplinger's article, "What Every Woman Needs to Know Before Retiring." Four months into Caroline's second marriage, the Internal Revenue Service (IRS) notified her they were taking $1,600 of her tax refund to make up the difference in back taxes her new husband owed. The IRS froze the couple's joint bank account a few months later because he was not paying withholding taxes.
Caroline's financial risk from her second husband totaled $50,000 and took two years to resolve. Women in Mineola reading this story can use it as inspiration to create an estate plan protecting them in the case of remarriage and other financial risks. Engage with a Mineola estate planning attorney like Bradley Campbell for strategies that help preserve funds, build wealth, and protect yourself.
According to the Pew Research Center's article, "Gender pay gap in U.S. hasn't changed much in two decades," women tend to live more years in retirement and earn roughly 84 cents for every dollar men earn. Women represent 55% of all Social Security beneficiaries aged 60 and older, and their percentages rise as the population ages. The highest rate of divorces now involves couples between ages 55 and 64, which leaves older women vulnerable to having fewer retirement assets when the marriage and joint finances end.
It's recommended that women should plan for themselves out how much wealth you need for a comfortable retirement and senior living. Work with an experienced Texas estate planning attorney for help choosing the best tools to meet your financial goals while protecting your money. Combine tools that protect you from a spouse's debt or other creditors, offer tax advantages, and authorize a trusted person to act in your best interests if you are incapacitated. Estate planning can preserve wealth so you pass on more to your heirs.
Revocable or living trusts are flexible tools in estate planning that transfer ownership from the creator to a trustee who manages the assets and distributes them to named beneficiaries. Revocable trusts are flexible, allowing the creator to access, change, or cancel the trust while alive. How the trust is structured helps protect trust assets and property from creditors. Revocable trusts avoid probate and simplify the distribution of assets to beneficiaries.
Irrevocable trusts are better asset protection tools, but as the name implies, they don't offer flexibility to access, change, or cancel. An irrevocable trust is used primarily for its status as a separate entity, removing the trust assets from the creator's estate. This type of trust can be used in Medicaid planning. Work with a trust and estate planning attorney to discuss trust options.
There are many other types of trusts in estate planning that can protect and preserve your wealth. Read our blog, Asset Protection Trust: Secure Your Wealth and Future to learn more about trusts.
Estate planning is often associated with older, very wealthy men. As family structures change and more women raise children and build wealth independently, they can and should plan for financial security earlier in life. Have you considered the financial risks when couples create joint bank accounts and comingle assets and unwittingly take on each other's debt? If a woman is divorced or widowed without an estate plan, she may face a long, bumpy road to financial security. For an experienced estate planning attorney in Tyler or Mineola, book a consultation with Bradley Campbell.
Book a consultation with Campbell Law Firm. Together, we can create a plan that brings peace of mind and security for your future and those you care about.
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