Women, Wealth Transfer, and Estate Planning

Aug 16, 2022 | Estate Planning & Administration

Women control a third of total U.S. household financial assets—more than $10 trillion. Globally, women’s wealth is expected to reach $93 trillion by 2023.

Women are also the largest beneficiaries of the current transfer of wealth—living an average of five years longer than men and often continuing to age into their 80s and 90s. In fact, by 2030, U.S. women are projected to manage much of the $30 trillion in financial assets that the Baby Boomer generation will hold.

A longer life-expectancy rate means that while women work to balance careers, caregiving, and life transitions, they may need to consider additional planning concerns — including ensuring their assets last through a longer retirement and can support extenuating healthcare costs.

Some women may face financial challenges due to shorter work histories if they chose to put their careers on hold to raise their families or care for an aging parent or family member. This decrease in income could reduce the amount of savings these women will accumulate for their retirement.

However, more women than ever are the family breadwinners and financial decision makers, and this trend does not appear to be declining anytime soon. Today, women hold 30% of board seats at S&P 500 companies. Research also shows, Millennial women (born 1981-2000) are now entering the highest circles of asset ownership faster than women born earlier. 22% of Baby Boomer women (born 1946-1964) have $5 million or more in assets, compared to 32% of Millennials.

This economic influence only emphasizes how important it is for women to manage and protect their assets and have a clear plan for distributing those assets in the future.

An organized estate plan can help with the transfer of assets. Here are a few important items to consider in your plan:

  • Think about your legacy. How will you provide for your family’s needs after your death? Which person(s) or charitable organization(s) do you wish to name as beneficiaries?
  • Meet with an estate planning attorney. Whether establishing a will or creating a trust for asset protection purposes or determining guardianship of minor children in the event of both parents’ deaths, it is important to have a customized plan and strategy in place to preserve family harmony and avoid family conflict. Other important documents to consider when drafting a will include power of attorney(s). A healthcare or financial power of attorney can give the individual(s) you select the authority to make healthcare and financial decisions on your behalf in case you become incapacitated. Alternatively, advance directives (e.g., a living will or do-not-resuscitate (DNR)) help guide the specific decisions of doctors and caregivers if you become incapacitated and incapable of expressing your wishes regarding your medical treatment. In these instances, planning for the unimaginable may help avoid unnecessary guilt and stress and relieve caregivers of decision-making burdens during unexpected medical emergencies.
  • Meet with a financial advisor. Maintaining a relationship with a trusted financial advisor can help you determine and meet your financial goals now and in the future.
  • Review beneficiary designations. Remember to review named beneficiaries annually for brokerage accounts, savings accounts, 401(k)s, ROTHs, or any other types of retirement accounts. Accurate beneficiary designations will ensure assets pass directly to the person(s) you choose and simplify the transfer process since these asset types can often be designated to pass separately from the instructions in a will. It is especially important to review these designations when you’ve had important life events, such as the birth of a child, adoption, marriage, or divorce.
  • Talk to your family about your estate plans. It is important to talk to your family about the estate plans you establish. Doing so can prevent arguments and disputes among family members after you are gone. The conversation does not need to focus solely on money, but on your intent. Discuss distribution of your possessions with your family—if there are specific items you want to go to a certain beneficiary, make sure there is verbal understanding, but also dictate your wishes in writing.