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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
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