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Practical Planning Tip: Women and Wealth - Estate Planning For High Net Worth Women

April 01, 2024

Today we’re going to continue our discussion on women & wealth and, the topic I want to discuss today is Estate Planning Considerations for High-net-worth Women:

Estate Planning Statistics show that the majority of women will be managing their estates on their own, at some point in their lives, due to outliving their male partners or the increasing likelihood of becoming divorced or choosing to remain single. Furthermore, many women may accumulate wealth from multiple sources, including inheritance from parents or a spouse, creating their own wealth as business owners or professional. In my practice, I have female clients who received an inheritance from their parents, their husband, and sold a business. This may be a substantial amount of assets that need to be managed correctly and prudently.

Based on a woman’s marital situation and financial status, there are various items to keep in mind when arranging for the orderly disposition of their assets.

High-net-worth women: The U.S. estate, gift, and generation-skipping transfer tax exemption amount available to U.S. citizens, is $13.61 million per individual. Notably, this increased exemption amount is a “use it or lose it” opportunity, given that it’s scheduled to sunset after 2025, when the exemption will revert back to $5 million and will be indexed for inflation.

For women of means, deciding whether to gift their assets to loved ones to take advantage of the temporary increase in the exemption amount should include considering the level of their wealth, asset protection planning, the need for future access to gifted assets, and the income tax consequences of the transfer. For residents of states with a state estate tax, gifting during life using the exemption amount may enable those funds to escape a state estate tax that could otherwise have been imposed at death.

I have actually found that the strategy of GIFTING to be very appealing to many of my female clients. Oftentimes, they want to have an impact NOW on the lives of their children and charities they are involved with, rather than wait until death. Of course, this decision is personal and different for every client, but it’s important to bring up the strategy of gifting to most efficiently remove assets from one’s estate.

You can WATCH the full video here.