Women today are not only in charge of running the household, but a majority of them are highly educated with masters and doctorate degrees. Some own their own businesses and others manage and oversee businesses of others. However, women still fall victim to thinking their husbands will take care of financial and estate planning needs for the household. Usually, that’s not the case.
Potential concerns for a Fort Lauderdale, Florida married woman in her late 30’s:
Rachel, a married woman has 1 young child from her first marriage and 2 young children from her second marriage. She owns 50% of a local South Florida business recently appraised for several million dollars. Rachel is concerned about disputes with her business partner. To top it all, she is in the process of a divorce with her second husband.
At this time, Rachel has no will or trust in place. She is a woman, getting divorced, with children different marriages, a multi-million dollar business, an estate possibly subject to estate taxation, and problems with a business partner. The urgency and need to consult with an estate planning/asset protection attorney is huge. She needs to start planning now to avoid losing all that she has worked for!
Consequences for Rachel not having a will or trust in place:
Under Florida law of intestacy (meaning no estate planning in place), Rachel’s ownership interest in the business would be divided as follows: ½ to her ex- husband and ½ divided equally among her 3 children. All other assets (besides business ownership) would be divided the same way.
Without a will or trust, the assets her minor children would inherit will be subject to court supervised guardianship. This includes additional expenses that would not be applied if proper estate planning were in place. There will be fees for the guardian, attorney for the guardian, and the court will have to approve all expenditures. Worst of all, all assets inherited by each child will be turned over to the child at age 18 to do with whatever they please.
With proper planning, assets for minors can be placed in a trust and you can direct (from the grave), how and when the child will receive their assets. For example, you may want to give ¼ of the assets to the child when they enter college, give another ¼ to the child when they graduate, then give the remaining ½ when they turn 25 or 30 years of age. You hope that at that time they will be responsible with their inheritance.
With respect to Rachel, her children and ex-husband would become partners in the business. The court appointed guardian would become a new partner in the business with respect to her minor children’s interest.
Rachel currently has a life insurance policy. Life insurance is an extremely useful tool in estate planning to help properly provide for your children’s needs you’re your death. Rachel would have to make sure that it was payable upon her to death to her children and not to her ex-husband. If the beneficiary information is not updated and changed, an ex-spouse can receive a nice chunk of change upon your passing. Pretty sure no one would want that to happen!
Furthermore, Rachel has no planning in place in case she was unable to make financial or medical decisions for herself. If she were to get into an accident, and was unable to make an emergency medical decision, and she had a health care surrogate drafted, that person could act on her behalf for medical decisions. If,by chance, she falls into a vegetative state and does not wish for her life to be prolonged, she would need to prepare a living will that clearly outlines her final wishes.
Rachel’s action plan to prepare her estate accordingly:
(1) Review all of her beneficiary designations and change them to someone other then her ex-husband.
(2) Prepare a will that will identify who she wants to care for her minor children
(3) Look over her life insurance policy and meet with a representative to see if she has enough coverage to care for her children.
(4) Prepare a trust so her assets can avoid probate.
(5) Prepare a living will, healthcare surrogate, durable power of attorney
(6) Make sure she has a buy-sell agreement with her business partner
(7) Make sure she has a business continuity plan to provide for continuation of the business in the event of her death or disability
Contact an experienced estate planning/asset protection attorney at The Hershey Law Firm, in Fort Lauderdale, Florida, at (954) 303-9468 to discuss your estate planning needs.