It is important for us to ensure that our families and financial goals are met after our death. As an attorney, it is my opinion that we as women face unique challenges when it comes to estate planning. Beyond our inherent emotional attachments, we are often financially responsible as mothers, wives, sisters, aunts, widows, employers and friends. Culturally and biologically, women are caretakers. We are often confronted with tough choices about finances, beneficiaries and health care. We do not always have the benefit, during these confrontations, of possessing all the knowledge that we need to make informed decisions. As wives, we do not always know or understand what estate planning our spouses already have in place. As single mothers, we are confronted with the dilemma of the continued care of our children without the benefit of partners. We are all faced with a variety of important decisions that result from different life circumstances and choices. As varied as those life circumstances and choices may be, there is one common goal. After we die, what are our wishes? What do we want for the people that we love?
After fifteen years of practicing law, I have found that conversations discussing death can be difficult for many of my clients depending on what stage of their life they are currently in. The gamut of emotions I see ranges from humor to sadness and from acceptance to fear. But death is a reality for all of us and timed without our control. Estate planning is better dealt with now than not at all for the sake of our loved ones..
In 2009, the estate tax hit $3.5 million. It was completely phased out in 2010 and was reinstated in 2011 at $5 million. Many people think that estate planning is not necessary or applicable to them if they do not currently have $5 million in assets. Nothing could be further from the truth. Estate planning is not just about tax planning. Tax consequences are always an important consideration in estate planning and people should seek competent legal and financial counsel in these matters. But estate planning is so much more. After we die, what are our wishes? What do we want for the people that we love?
It is about planning for our children and naming their guardians. It is about planning to protect and care for our spouse, partner, relative or dear friend after our death. It is about planned charitable giving to a great cause that is close to our heart. It is about planning to effectively manage assets received from the divorce or death of our spouse. It is about planning for the future of our businesses, whether by sale or its transfer to our family.
Estate planning is a legal vehicle to dictate how, to whom and when we want our estate assets to be distributed. I know my children would not have been financially mature enough to manage a substantial amount of inherited wealth upon turning eighteen years old. I shuddered at that possibility and urged my parents to extend the age to twenty-five when I hoped they would be possibly more mature.
Whether for the benefit of children, spouses, partners, businesses, charities or churches, your estate assets must be set to transfer in a legally effective manner mirroring your desires. No matter what a person’s net worth is, it is important to have a basic estate plan for all the fore –mentioned reasons. It is also important to discuss your wishes with your heirs to avoid confusion and minimize conflict after you die. It is a necessary conversation that is conducive to effective estate planning.
At a minimum, a basic estate plan should include a will, a financial power of attorney and an advanced care directive. These basic estate documents address after-death issues such as who the asset will goes to, who is handling the financial affairs and who is responsible for making medical decisions upon an individual’s medical incompetency. A trust may be the chosen vehicle for some people depending on their estate planning goals. More and more people are using trusts as an estate planning vehicle. Trusts allow people to put conditions on how and when their assets are to be distributed. Trusts are often used to reduce estate and gift taxes. Trusts are also private documents and avoid the delay and publicity of probate court.
Every individual should have a will. A will indicates exactly where you want your assets to go upon your death. Dying without a will, or dying intestate, leaves it up to the laws in the state where you die on how your assets are to be distributed which may not coincide with your own personal wishes and adds delay to the administration of your estate. A will is also the best place to indicate who you want to be the guardian of your minor children if you die before the children reach the age of majority. Even if you have a trust, a will is used to distribute assets outside of the trust. A person’s assets may include real estate, bank accounts, business interests, insurance policies, investments and retirement accounts.
Estate planning is as individual as we are as women. It is a necessary reality of our lives to effectively carry out our wishes in our deaths. It may be the final chapter for us as caretakers.
Mary-Anne E. Martell, Esq., is Senior Legal Counsel and Founder of Seacoast Law & Title, a three-attorney law firm in Westbrook specializing in estate planning, real estate, business and family law. Mary-Anne welcomes comments or questions at email@example.com or (207) 591-7880.