Women in Ohio and throughout the U.S. live longer than men in general, which means they have unique needs when it comes to estate planning. An article in Forbes magazine puts the average life expectancy of women at nearly five years longer than men, with some living well beyond those five years.
Additional factors that make estate planning for women unique is their work and salary history. Some women take time off from work to raise children, returning after several years away. Others work part-time for several years. Either way affects their retirement savings.
Whether married or single, it is important for women to ensure they have the resources they need for retirement. The first step is taking inventory of their assets, which includes accounts for saving and checking, as well as investment and retirement plans. Women who are beneficiaries of an insurance policy can consider the policy an asset, but need to consider whether the benefit is enough to meet their needs should their spouse die first.
Three essential estate planning tools for women are:
- Durable power of attorney in health matters: This allows another person to make health care decisions for someone who becomes incapacitated.
- Living will: This is a legal record of a person’s wishes for their end-of-life care.
- A will: This document details how assets will be distributed after death.
According to FindLaw, an online legal resource, those who inherit assets outright from a spouse do not have to pay this tax, but all other heirs do, as will heirs of the surviving spouse. These taxes can take as much as 55 percent or more of high-value estates.
One way to reduce estate taxes is to make gifts. Federal law allows one to give up to several thousand dollars annually to someone without imposing taxes. Such gifts are typically for children and grandchildren, but they can be made to anyone, and they can be made to the same people year after year.
Gifting in this manner allows an estate holder to benefit heirs early while driving down the overall value of the estate. A lower-value estate means there less money lost to taxes upon inheritance.