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Special considerations for older women in estate planning

Medical advancements have yet to change one thing that has been true for decades -- on average, women outlive men. The U.S. Census Bureau reports that 36 percent of women over the age of 65 are widows. Alternatively, only 12 percent of men in the same age group are widowers. This presents a different set of challenges for Washington, DC women when estate planning.

Many women depend on their husband as their sole financial support later in life. For instance, when a woman's husband was eligible to take his pension, he often took the maximum, and that income provided the couple's sole support. When he dies, that income stream will stop. Without planning, this situation could put a woman in a precarious position.

Widowed women also have issues to consider as well. A widow's estate plan will need to be updated to reflect her husband's death and to account for any changes in beneficiaries his death may necessitate. If a widow or divorced woman remarries, her new husband is entitled to a statutory claim against the estate if she predeceases him. It may make sense to consider estate planning issues prior to any subsequent marriage, particularly when the widow has children from a prior marriage.

A surviving spouse's statutory claim provides for the right to an amount from a deceased spouse's estate that equals the share that would have been available had the spouse died without a will. This right of election by a surviving spouse typically overrides any wills or beneficiary designations made during the marriage, since public policy does not allow people to disinherit their spouses. Therefore, if a woman does not want her new husband to inherit certain premarital assets, some adjustments to her estate plan may prove beneficial. Putting certain assets into a trust and changing the beneficiary designations on retirement accounts and insurance policies prior to marriage, along with keeping the assets separate during the course of the marriage, may ensure those assets are distributed in accordance with a woman's wishes.

Washington, DC residents hear often that estate planning is crucial, but why it is may not always be explained. Older women may not readily understand how their financial situations can dramatically change if they are widowed -- and then if they remarry. Taking the time to consider the issues and create an estate plan accordingly could provide everyone peace of mind.

Source: marketwatch.com, "How women can make estate planning easier", Andrea Coombes, May 8, 2014

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