Page 28 - Investment Advisor - Jan/Feb 2021
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WOMEN IN WEALTH
By Mela Garber
For Wealthy Women, Tax and Estate
Planning Is a Weak Link
Biden’s election, which may mean future tax policy changes, should be a
wake-up call to women to get their estate plans in order.
or most high-net-worth indi- tive words like fear, anxiety, inadequacy
viduals, election cycles mean and dread with financial planning, and
Freshuffling tax planning strate- that they start managing money later
gies around areas such as estate, chari- than men.
table donations and capital gains. And despite progress in granting
Given the expectation the Biden women more rights, cultural attitudes
administration will roll back some of towards women always have been even
Trump’s policies of the past four years, slower to shift than legal ones. While
tax consultants and accountants are men were historically brought into
already hard at work. the financial planning fold early in
But for HNW women, dealing with their youth, their sisters were likely
election fallout is minor compared to relegated to eavesdropping outside
the bigger fish they have been frying in closed doors.
the tax pan for decades. The Spousal Lifetime Access Trust This lack of financial education
is an irrevocable trust available for has posed a major challenge for these
‘WHAT IF?’ BECOMES ‘WHAT NOW?’ couples but not to singles. In fact, the women, and condescending and patron-
In the event of a sudden death or SLAT agreement may include a provi- izing advisors only feed into the feedback
divorce, HNW women can find them- sion that terminates any spousal trust loop. This outsider status has created a
selves in a precarious financial position rights upon divorce. Women should feeling of avoidance for women, becom-
if they haven’t prepared. While no one is plan their lives under the assumption ing a self-fulfilling prophecy of sorts.
ever “prepared” to lose a spouse, women that these assets might not be accessible Because each woman’s situation
are at a particular disadvantage because upon divorce. is different, however, it is essential
in many cases they are not responsible There also are future costs associ- that they have an honest, one-on-one
for managing the household finances. ated with losing a spouse — women conversation with an advisor they
But as women tend to outlive men, should consider purchasing long-term trust. And in choosing an advisor,
there always should be a plan for unex- care insurance for themselves as they they need to find one who is an ally,
pected events. get older. not an aggressor.
Also, as attitudes shift and more Advisors need to understand that
women build wealth for themselves, AN AVOIDANCE ISSUE scripted webinars and prepackaged
they are less likely to stay trapped in Many women find themselves unpre- advice make tax planning inaccessible
unhappy marriages. While divorce rates pared to deal with the legal ramifications to women, and they will avoid advisors
are declining in the United States, for that often accompany the emotional who don’t give them the financial atten-
couples over age 50 the numbers are trauma of life changes like the above tion they need.
increasing. For more U.S. women today, scenarios. As a rule, divorcees and wid-
“What ifs?” are becoming “What nows?” ows do not have the same tools available THE GIFT OF GIVING
One essential step in planning for as married couples, so they need to Once a plan is in place, women need to
HNW women is to consider what assets be more proactive with estate planning consider their long-term estate plan-
they will require to live comfortably, prior to major life events. ning with children. This is where tim-
and what assets will be available to For women, this sounds easier than it ing and tax policy changes from the pim pic/Shutterstock
them should they lose a spouse to death is. A 2020 U.S. Bank Survey revealed that incoming administration are crucial
or divorce. more women than men associate nega- to understand.
26 INVESTMENT ADVISOR JANUARY/FEBRUARY 2021 | ThinkAdvisor.com