Co-authored by Jennifer Porath, CPA, a manager in Wipfli’s tax practice.
The following article was prepared in collaboration with our affiliate, Wipfli LLP. Wipfli ranks among the top accounting and business consulting firms in the nation.
As a single woman, you probably don’t think about your estate planning needs very often, if at all. But you have assets and wealth — and without a plan in place, if something were to happen to you, your wealth may not go where you intended.
Since none of us know how long we will live, the most important step you can take in estate planning is actually getting started. Here’s what to expect out of the process and advice we have to help ensure the best outcome for your estate:
1. Don’t wait any longer
There are a range of reasons to stop waiting — not just the fact that your estate will end up in probate without proper planning.
Working with financial and legal advisors during the estate planning process can help you consider everything you may need as you get older. For example, it’s difficult to think now about how you may need assisted care if you live to an advanced age, but without the right insurance coverage, many people have had to sell their homes to afford this type of long-term care. Estate planning is about preserving your wealth for the next generation, so it will provide you with opportunities now to plan not just what will happen after your death but also what lifestyle you can afford to have as you get older.
Women who are divorced have another reason to jump on estate planning. Have you updated your medical power of attorney? Who can legally make decisions for you if you’re incapacitated? We’re guessing you may not want it to be your ex-spouse.
Lastly, any future plans you have should not impact your decision to begin estate planning now. If you do get married and/or have children, you can review and update your estate planning documents according to your changing goals and beneficiaries. In fact, we recommend everyone with estate plans regularly review them to ensure they still align with their goals.
2. Analyze your goals and understand your options
Speaking of goals, once you make the decision to start the estate planning process, your next step is figuring out what you want to happen after your death. Do you want your wealth to go to charity? Do you have specific family members or friends you’d like to inherit your estate?
Once you know your goals, your advisor can walk you through your options — everything from whether you should put assets into a trust to what you can do now as a single person to preserve and grow your wealth, such as itemizing deductions, gaining deductions for charitable contributions and making Roth IRA contributions.
3. Designate your beneficiaries
If you don’t have children, it can be a struggle to choose your beneficiaries. But whether you ultimately choose your parents, nieces/nephews, cousins, other family members or even friends, the most important step is making your intentions known. Designating beneficiaries helps ensure your estate will go to who you want it to, in the percentages you desire, and help prevent family conflict.
Just remember to update these beneficiaries as life events occur. You may gain new nieces and nephews you’d like to add. It’s also likely you’ll outlive your parents and need to update the percentage of your estate you designated to them. Or you may become passionate about a specific charity and want to give part of your wealth to further their mission.
4. Create a list of assets
Similarly, you’ll want to decide on an executor of your estate — and almost more importantly, you’ll want to make it easier for them to be the executor. All too often, we see family members who are grieving the passing of a loved one and struggling to sort through their estate. They have no idea what assets even exist or who to reach out to for help.
It’s a good idea to work with your advisor to put together a list of your assets, including account numbers, the location of safe deposit boxes, etc. You should also have a list of who makes up your advisory team — your CPA, your financial advisor, your lawyer — so your family knows who to go to for information and these important documents.
5. Don’t be afraid to ask questions and rely on your advisor
Your advisor is there to help ensure you make the right decisions for your financial future. To do so, they need to see the full picture. For example, even if you don’t think you have complicated taxes and feel comfortable doing them on your own, you may be leaving money in the table. Working with a CPA can help maximize your savings, just as working with a financial advisor can help maximize your wealth over the long term.
We recommend having your advisor accompany you when meeting an estate planning professional. They can help you ask the right questions and ensure the estate plan is a good fit to meet your goals. Similarly, having your CPA, lawyer and financial advisor in the same room can help you more fully tackle discussions around topics like gifting. They can bring different insights and opportunities into consideration and help ensure there are no gaps in your plan or opportunities you missed.
How we can help with estate planning for singles
As financial and tax advisors, we can’t recommend strongly enough that single women start the estate planning process now so they can protect and continue growing their wealth. We’re committed not just to serving our clients but also serving them holistically. Wipfli Financial Advisors and Wipfli collaborate to meet our clients’ tax, gifting, succession planning and estate planning needs.
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