Even in this age of equality, women have a tendency to leave the decisions and details of estate planning to their husbands.
According to a 2012 Wells Fargo/Gallup investor and retirement survey, almost 50 percent of men say they take the lead in their family’s financial decision making, compared with just 21 percent of women. What makes that even more problematic is that, because women live longer than men, they are more likely to receive an inheritance — at which point, of course, they’ll be left alone to handle it.
In fact, many wealthy women are in place to receive a double inheritance — from their husbands and from their parents. A proactive financial advisor will make sure these women are ready to deal with those assets before they ever receive them.
Here are some issues to present to women even before those inheritances come in, to make sure they are properly prepared.
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First of all, make sure the existing estate plan deals with inheritance. And make sure the wife is present when the conversation about any possible inheritances takes place. It’s not just that she needs to know what the plan calls for in case her husband passes away; this is a great opportunity for the wife to ask questions about anything she doesn’t understand.
Encourage wives to ask for assistance. Once you’ve had that initial conversation, make sure they know they can come back to you with questions at any time. Some wives feel intimidated by their husbands and are more likely to open up about things they don’t understand when they’re on their own. In the 2012 Charles Schwab Women and Financial Independence study, 84 percent of the women surveyed said that face-to-face meetings with their advisors are important.
Think long term. Studies have shown that women often procrastinate when it comes time to make decisions regarding their financial planning. Don’t let short-term decisions about paying off debts come at the expense of long-term planning. Women who outlive their husbands often have 10 years or more of life remaining, and that extra time must be addressed.
Consider setting up an inheritance account. In most states, an inheritance becomes the sole property of the spouse who received it, rather than joint property. If your client receives an inheritance from a late parent or other family member, it might make sense to set up a separate account to hold it. That could benefit not only the estate situation but shield the money from creditors, should the client’s spouse run into debt problems.