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.
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.
Talk to her parents. If the client expects to receive a sizable inheritance from her parents, encourage them to have a detailed talk about this before it’s too late to have the conversation. An expected inheritance is much easier to plan for than a windfall that comes out of the blue.
Discussing personal items and keepsakes with her parents can be a good way for your client to broach this sensitive topic: “You know that sculpture you and Dad have on the back patio? I’ve always hoped that someday it would be in my house.” Especially if the older generation is downsizing their home, this may be a conversation they very much want to have.
Think of the legacy. After a spouse’s death, many people’s thoughts turn to what they might leave behind in the world. The client may well welcome this opportunity to revisit the legacy she can establish.
Take your time. Losing a spouse is an incredibly traumatic event for most of us. Many widows speak of living in a fog for a year or so after their husband’s death. This presents two contradictory issues. A good financial advisor will guide the recently widowed to take steps that are necessary to preserve her wealth. At the same time, the advisor needs to guard against impulse decisions that can devastate the widow’s financial needs.
See also: The widow planner
Don’t assume you have all the answers. In that 2012 Charles Schwab Women and Financial Independence, 88 percent of the women surveyed said they want a say in how their advisor invests their money. Even women who have let their husbands take care of such things for decades will now appreciate the opportunity to step up and take control.
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