There is constant buzz out in the world about legacy planning:
However, there’s less talk about this topic: what if you don’t want to leave an inheritance at all??
The number of women not having children is on the rise. According to the Institute for Family Studies, “More U.S. women are skipping motherhood today. In 2020, 1-in-6 women reaching the end of their childbearing years had never given birth, according to a new Institute for Family Studies analysis of Census data. This share was lower in 2016, when 14% of women ages 40 to 44 had never given birth. At the same time, the share of women who have had two or more children declined from 32% in 2016 to 30% in 2020.”
In my blog, we try to tap into the many questions that single Gen X women have about money. So, it makes sense to talk about this elephant in the room.
Whether you don’t have children by choice or by circumstance, you might be wondering how to handle your finances if leaving a legacy isn’t a consideration. So, let’s talk about that.
I often joke with my clients that if they can tell me exactly how long they will live, I can tell them how much money they can spend. Since that is not an option (if you CAN do this – call me!!) it is difficult to find the balance between running out of money and not leaving a lot of money behind.
A financial advisor can help run the advanced calculations necessary to get close. However, if you make sure that you don’t run out of money, you will absolutely have money “left over.” The safest option is to get close to spending all of your money and have an estate plan that honors your wishes with the money you leave behind.
One option that few people consider is gifting money while you are alive vs. leaving it to heirs after you pass. You still won’t know how exactly how much is safe to give away, but the older you are, the easier it is to know if you have excess funds. We in the biz like to call that “giving with warm hands instead of cold.” A bit morbid, but it can be so rewarding to help while you are alive to see the impact your money is making.
Making sure your money is left to the heirs or charity that you would like depends on what kind of asset it is. Retirement accounts allow you to designate beneficiaries. This choice supersedes a will or trust, so it is very important to keep these up to date. Non-retirement accounts have a similar option, and you should discuss this with your advisor or bank representative. Assets such as a house or personal property can be designated through a will or trust, and this should be done with an estate planning attorney who is licensed in your state.
Speak with your financial advisor, bank representative, and/or your estate planning attorney. Once you have established your estate plan, changes generally should not be too difficult to make.
Ultimately, the choices you make about your money should be discussed with a financial planning professional. We understand that your decisions are personal and they’re YOURS. We’re here to listen to your needs, values, and goals so that we can help you make the right choices for your individual situation. So, if you’re ready to run the numbers, I’m here to help you. CLICK HERE to make an appointment.
The number of single people in the US is on the rise. According to the 2021 Census Report, “there are now 122 million Americans who are divorced or widowed or have always been single,” a number that has risen from 118 million in 2019. (Source)
Whether you’re single by circumstance or by choice, there are some things that you should be aware of when it comes to your future. Estate planning is something that every adult should check off their to-do list, and creating a solid plan can vary depending on your situation.
Estate planning for single women is less about making sure loved ones are protected and more about ensuring you’re protected when it comes to medical and financial decisions.
Designating people for these roles is something you should carefully consider and determining who they are now – before an emergency should occur – allows you to clearly outline your wishes. “For those who have trouble naming a proxy due to a lack of family, an estate planning attorney can help to identify a financial institution that can serve as a proxy and act as a co-trustee.” (Source)
Let’s say you have a cousin you can’t stand and haven’t talked to in 10 years. And let’s say something should happen to you and you haven’t designated any beneficiaries for your assets.
Guess what?
Your estate has now been handed over to a probate court which will decide how your assets are distributed. They’ll start with relatives and work their way through the list. And that annoying cousin could be who ends up with your hard-earned money.
Another thing to keep in mind is, if you’re single because of divorce, in some states, like Colorado, if you don’t want your money to be left to your spouse, this requires specific action. However, “a single person does not need to worry about ancillary documents, such as a marital agreement, in order to disinherit someone.” says Kim Raemdonck, owner of Legacy Planning and Probate and current President of the Women’s Estate Planning Council.
When it comes to your assets, indicating your wishes means that YOU decide what person or charity receives your money. If there are organizations near and dear to your heart, this is a great way to leave a legacy.
When I work with a client, I’m looking at the entire picture – now and long into the future. It’s important that my clients know that everything within their control has been taken care of and it’s my job to make sure the boxes are checked.
If you have questions about living your best (financial) single life and are ready to take care of a few things you know you should…let’s talk!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
