Finance

Women and Estate Planning Basics

Published

11 years ago

August 1, 2014

Women estate planning

When it concerns estate planning, females have unique concerns. The fact is that women live approximately 4.8 years longer than men. “That’s significant because it means that there’s a greater chance that you’ll need your assets to last for a longer time period and a greater need to plan for incapacity,” says Martin Walcoe, EVP at David Lerner Associates. “It also means that you’ll have to take responsibility for your very own estate plan.”

What is an estate plan?

An estate plan is a map that reflects the way you want your personal and financial affairs to be handled in the event of your incapacity or death. It allows you to control what happens to your property if you die or become incapacitated.

If you’re married, the odds are that you’re going to outlive your husband. That’s substantial for a few reasons. First, it means that if your husband passes away before you, you’ll likely acquire his estate. More importantly, though, it means that to a large extent, you’ll probably have the last word about the final disposition of all the assets you’ve collected during your marriage.

Estate planning may be especially needed if you have minor kids; your net worth exceeds the federal transfer tax exemption amount ($5,340,000 in 2014, $5,250,000 in 2013) or, if less, your state’s exemption amount; you own property in greater than one state; monetary privacy is an issue; or you own a business.

Planning for incapacity

Incapacity can happen to anyone at any moment, but your risk generally increases as you age. You must consider what would happen if, for instance, you were unable to decide or conduct your personal affairs. Failing to plan may mean a court would have to appoint a guardian, and the guardian might make decisions that would be different from what you would have wanted.

Health-care directives can help others make sound decisions about your health when you are unable to. These might include:

Living will – a document that lists the kinds of medical treatment you would want, or not want, under particular circumstances.
Durable power of attorney for medical care (health-care proxy) – lets several family members or other trusted individuals make medical decisions for you.
Do not resuscitate (DNR) order – a legal form, signed by both you and your doctor, that gives hospital staff permission to perform your wishes.

There are also tools that help others manage your property when you are unable to, including:

Joint ownership – allows another person to have the same access to the property as you do. For instance, if you and your spouse have a joint checking account and you become incapacitated, your spouse would still have the ability to make mortgage payments on schedule.
Durable power of attorney – lets you name family or other trusted individuals to make financial decisions or negotiate business on your account, even in the event that you are disabled, or perhaps because you are disabled.
Living trust – a follower trustee can move into your shoes to manage property in the trust if something should happen to you.

Wills and probate

A will is quite frequently the cornerstone of an estate plan. It is a legal document that directs how your property is to be distributed when you die. It also allows you to name an executor to perform your wishes as specified in the will and a guardian for your minor children. You can also create a trust in your will. The will should be written, signed by you, and witnessed.

Most wills must be probated. The will is filed with the probate court. The executor collects assets, pays debts and taxes owed, and distributes any remaining property to the rightful heirs. The rules vary from state to state, but in some states, smaller estates are excluded from probate or get an expedited process.

For most estates, there’s little reason for avoiding probate, as the real time and costs involved are modest. And, there are actually a few benefits to probate. Because the court supervises the process, you have some assurance that your wishes will be followed. And probate offers some protection against creditors, since creditors are generally required to make their claims against the estate in a timely manner.

However, there are a variety of reasons for avoiding probate also. For some complex estates, probate can take up to two or more years to complete and bind property that your family may need, while adding executor fees, attorney fees, and insurance costs. And, if you have property in over one state, probate may be required in each state. Also, wills and other documents submitted for probate become part of the public record, which may be undesirable if you or your family have privacy concerns.

There are ways for you to avoid probate, if that is your desire. Probate may be avoided by owning property jointly with rights of survivorship; by completing beneficiary designations for property like IRAs, retirement plans, and life insurance; by putting property in an inter vivos trust; and by making lifetime gifts.

What happens if you die without a will or an estate plan?

Regardless if you have a will, some property passes automatically to a joint owner or to a designated beneficiary. For instance, you can transfer property including IRAs, retirement plan benefits, and life insurance by naming a beneficiary. Property that you own mutually with right of survivorship will automatically exchange the surviving owners at your death. Property held in trust will pass based on the terms you lay out in the trust.

Property that does not pass by beneficiary designation, joint ownership, will, or trust passes according to state intestacy laws. These laws vary from state to state. The state laws for intestate succession specify how property will pass, generally in certain proportions to numerous related persons. Such as, a typical state law might specify that property pass one-half to a surviving spouse, with the remainder passing equally to all kids.

Trust basics

A trust is a flexible estate planning tool that can protect against incapacity; avoid probate; minimize taxes; allow professional management of assets; provide safeguards for minor children, old parents, and various other recipients; and protect assets from potential creditors. Most importantly, trusts can provide a means to administer property on an ongoing basis according to your desires, even after your passing.

A trust is a legal entity where someone, referred to as the grantor, arranges with another individual, called the trustee, to hold property for the advantage of another party, named the beneficiary. The grantor names the beneficiary and trustee, and develops the rules the trustee must follow in a record called a trust agreement. With a trust, you can provide various interests to different beneficiaries. For instance, you might provide income to your children forever, with the rest heading to your grandchildren.

You can develop a trust while you are living (a living or inter vivos trust) or at your death (a testamentary trust). A trust you create during your life can be either revocable or irrevocable. You retain the right to change or revoke a revocable trust. An irrevocable trust cannot be altered or revoked. A trust you create at death is irrevocable.

Transfer taxes

When you get rid of your assets during your lifetime or at your death, your transfers may go through federal gift tax, federal estate tax, and federal generation-skipping transfer (GST) tax. Your transfers may also undergo state taxes.

Lifetime Providing

Making gifts during one’s life is a common estate planning technique that can serve to avoid probate and reduce transfer taxes. One way to perform this is to capitalize on the annual gift tax exclusion, which lets you give up to $14,000 (in 2013 and 2014) to as many people as you want gift tax free. In addition, there are several other gift tax exclusions and deductions available to help you lessen transfer taxes. Making a gift can also let you see the receiver enjoying the advantage of your gift while you are still alive.

*National Vital Statistics Report, Volume 61, Number 4, May 2013. Header.

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. Member FINRA & SIPC

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Finance

Navigating the Digital Crypto Currency Landscape

Published

5 days ago

May 16, 2025

Good Life Guide

The world of cryptocurrency is experiencing a notable resurgence. Bitcoin has surpassed the $104,000 mark, and Ethereum has seen a 40% increase over the past week. These developments are fueled by optimism surrounding potential U.S. interest rate cuts and a surge in institutional investments.

Bridging Traditional Finance and Digital Assets

The integration of cryptocurrency into mainstream finance is becoming more apparent. Galaxy Digital’s debut on the Nasdaq and eToro’s public listing signify a growing acceptance of digital assets in traditional financial markets. Additionally, Coinbase’s inclusion in the S&P 500 index underscores this trend.

Regulatory Developments on the Horizon

Regulatory clarity is essential for the continued growth of the crypto market. The U.S. Securities and Exchange Commission (SEC) has announced plans to establish new rules for crypto tokens, aiming to provide a clear framework for issuance, custody, and trading. This move is expected to foster innovation while safeguarding investors.

Innovations Making Crypto More Accessible

Emerging cryptocurrencies are introducing features designed to enhance user experience. JetBolt (JBOLT), for instance, offers zero-gas technology on the Skale blockchain and has already sold over 353 million tokens during its ongoing presale. Cardano’s integration with Brave Wallet and Tron’s surpassing of Ethereum in stablecoin supply highlight the evolving landscape of digital currencies.

What This Means for Everyday Investors

For those new to cryptocurrency, the current environment presents both opportunities and considerations. The increased involvement of established financial institutions and the development of user-friendly platforms make entering the crypto market more approachable. However, it’s essential to do your homework and understand your financial goals and risk tolerance before investing.

Staying Informed and Secure

As with any investment, staying informed is crucial. Recent events, such as Coinbase’s reported cyberattack, underscore the importance of security in the digital asset space. Prospective investors should prioritize platforms with strong security practices and remain cautious of scams or hype-driven trends.

As always, before making any financial decisions or investing in cryptocurrency, consult a licensed financial advisor to ensure it aligns with your personal financial strategy.

Finance

Why Financial Planning Isn’t Just for the Wealthy

Published

3 weeks ago

May 1, 2025

Good Life Guide

When most people hear the term “wealth management,” they assume it’s only for millionaires with investment portfolios and private banking relationships. But here’s the truth: financial planning is for everyone—especially those who don’t yet consider themselves wealthy.

The past few years have shown us how quickly financial stability can be disrupted. Whether it’s a job loss, an unexpected emergency, or a global crisis, having a financial plan in place can make a huge difference in how you weather the storm.

The Misconception of “Wealth Management”

There’s a popular myth that only the rich need to manage their money. But that idea misses a crucial point—wealth doesn’t come first. Planning does. You build wealth by managing what you have, even if it’s not much right now.

According to a Global Wealth Report by Credit Suisse, only about 6 percent of Americans are considered “wealthy,” with a net worth of $1 million or more. That leaves the vast majority—94 percent of us—outside of that elite bracket. But that doesn’t mean financial literacy and planning aren’t for us. In fact, it’s quite the opposite.

Why Financial Literacy Matters

More than half of Americans don’t use a budget, and many don’t know how much they spent in the past month. Shockingly, almost half of American households had no savings in retirement accounts and average hundreds of dollars a year in avoidable fees like overdrafts and late payments.

These stats reflect a broader issue: a lack of confidence and understanding when it comes to money. Building financial literacy means learning how to:

Create a budget that reflects your lifestyle and goals
Save consistently, even in small amounts
Avoid unnecessary debt
Plan for short- and long-term financial goals

You don’t need to become a financial expert—you just need to start with the basics.

Start Financial Planning Where You Are

Whether you’re living paycheck to paycheck or enjoying a stable income, there’s never a bad time to take control of your finances. Start small: track your spending for a month, build a basic budget, or open a savings account just for emergencies.

If you’re not sure where to begin, consider working with a financial professional. They can help you set goals, make smart choices, and create a roadmap for your future.

It’s not about how much you make—it’s about how well you manage what you have.

Financial planning is not reserved for the ultra-wealthy. It’s a vital step toward a more secure and empowered life. The earlier you start, the more options you’ll have later.

Finance

The Financial Literacy Gap Facing Today’s Youth

Published

4 weeks ago

April 22, 2025

Good Life Guide

It wasn’t long ago that Boomers and Gen Xers were lamenting the rise of Millennials. But the generational spotlight has shifted. Now, it’s Gen Z and the up-and-coming Generation Alpha who are stepping into the world—and bringing with them a new set of financial challenges.

Who Are Gen Z and Gen Alpha?

Who Are Gen Z and Gen Alpha?

Gen Z, also called “Zoomers,” includes those born between 1997 and 2012. They’re currently between 9 and 24 years old, making up nearly 68 million people in the U.S. Generation Alpha follows, with children born starting in 2012 and expected to continue through at least 2025. This youngest generation is already more than 48 million strong in the U.S. alone.

Here’s a quick generational breakdown in terms of current U.S. population:

Baby Boomers (Ages 57–75): ~71.6 million
Gen X (Ages 41–56): ~65.2 million
Millennials (Ages 25–40): ~72.1 million
Gen Z (Ages 9–24): ~68 million
Gen Alpha (Born 2012 onward): ~48 million

Influence Is Everything

Millennials—many of whom are now parents—once led the charge in digital culture. But their kids are the ones shaping the future of consumer behavior. A recent survey shows that 37% of parents say their children ask for toys or gadgets because their friends have them. Another 22% say online influencers play a major role in what their kids want.

This early exposure to digital marketing and peer influence only underscores the importance of equipping kids with solid financial knowledge from an early age.

Financial Stress Starts Young

Financial anxiety isn’t waiting until adulthood to take hold. A study by Junior Achievement USA and Citizens Bank found that 54% of teens worry about how they’ll finance their future. Rising tuition costs are a major concern—almost 70% said those expenses have changed their post-high school plans.

One possible reason? A lack of financial education. More than 40% of teens say they haven’t taken a financial literacy class in school. Nearly as many believe that simply understanding how student loans work would help ease their concerns.

As David Beckerman of David Lerner Associates puts it, “Gaining a better understanding of financial basics and developing good fiscal habits are the best way to stay in control of your money and financial future.”

Tools to Build Financial Confidence

The good news is there are more resources than ever to help parents, teachers, and teens improve financial literacy. Here are a few accessible platforms and tools:

NerdWallet: Offers easy-to-understand guides, calculators, and articles covering everything from budgeting and student loans to investing and credit cards.
Greenlight: A debit card and app for kids that lets parents manage spending, set savings goals, and even automate allowances. It’s a hands-on way to teach money management.
Cash App: While primarily used for peer-to-peer payments, Cash App also includes features like a debit card, savings options, and even investment tools that can introduce older teens to basic banking and finance.
Khan Academy: Provides free courses and videos on personal finance, economics, and money basics—great for students and educators alike.
Junior Achievement: Offers in-school programs and digital content designed to teach financial literacy, entrepreneurship, and career readiness.

The Bottom Line

Financial literacy isn’t just about knowing how to balance a checkbook—it’s about building a mindset that helps young people feel empowered to make smart, informed decisions. And while schools and institutions may lag behind, parents and mentors have the tools today to help bridge the gap.

Start early. Stay consistent. And don’t underestimate how powerful a little financial education can be in shaping a confident, capable next generation.