by Deborah Jeanne Sergeant
For many reasons, it’s important for women to understand estate planning. Statistically, women outlive men by five years, according to the CDC. Relying solely on a husband’s estate planning is not practical, as situations may change in those five or more years. More women own assets in their names alone and operate businesses independently of another person. And many farm women want to pass down their ag businesses to the next generation or see that their assets go to the causes they support.
To address these issues, Christa Kemp, director of donor relations with Vermont Land Trust, hosted an online discussion of women’s estate planning with panelists Susan Fowler, the trust administrator for Trust Company of Vermont in Brattleboro, and Livia DeMarchis and Jeanne Blackmore, tax and estate planning attorneys with Gravel & Shea in Burlington.
Years ago, Kemp realized, there wasn’t explicit education for women about finances. They ran three focus groups of women and found they wanted collegial, supportive environments where they received expert advice for free. “We’ve found that these workshops have been incredibly helpful for people.”
By 2030, U.S. women will hold roughly $30 trillion in wealth. “There’s a lot of power within our gender to change the world and leave legacies or build a future we want to see happen,” Kemp said. “I also know that 68% of Americans do not have a will. Your assets may end up doing things you don’t wish they will do.”
DeMarchis explained, “A will is a document that allows you to decide who will receive your assets and when and how. When we do estate plans, we do revokable trusts as a document outside wills to avoid the probate court process. As soon as you have or are expecting any kids, that’s when you need to put a will in place, or you have assets in your name and you want to make sure your assets pass to anyone else.”
Blackmore said you’re never done planning a will. “You can only plan your estate for what is right in front of you,” she said. “Whatever you want to happen today is what you can plan for. Revisit your estate plan when there’s a change in your plans or the law or what you want to have happen with your assets.”
A trust is a different financial planning tool. Fowler explained, “A trust is a way to have your assets distributed without going through probate.” It’s an entity that essentially owns a person’s assets and upon death, a specified person or company will take care of those assets according to the deceased’s wishes. “You avoid having the court involved,” Fowler said. “Unless you set up a trust in your will, everything will be distributed at the time of your death.”
Blackmore said that with a trust, “you can pass your assets. While you’re alive, you title all your assets in your trust. If you forget something, your will designates your trust as the sole beneficiary. When you have a trust, you still have an executor but the goal is not to have the executor do his job.” Some things put in trusts are blanket documents, such as “all my livestock.”
Finding an attorney can begin with talking with your county’s probate court. “They can give you a short list of names,” Fowler said. “The court deals with these attorneys all the time.”
Blackmore warned of lawyers to avoid, such as someone who can’t explain something plainly. “I’m also nervous about people who charge a flat fee for estate plans,” she said. “A lawyer should not consider you ‘one and done.’ The relationship should be continuous. An accountant may recommend an estate planner. They should work hand-in-hand, especially those who have complicated estates.”
Anyone involved in estate planning wants to minimize what goes to taxes and maximize what goes to heirs. Blackmore said when looking at estate taxes, it can be helpful to give some to charity to reduce the amount going to taxes. Those with no children can name organizations as beneficiaries.
The cost of making all of these estate plans depends upon the complexity of the farm and also what a particular attorney charges. It ranges from $2,000 to $3,500 (or more for complex estates).
To save money, women can record their assets on paper to better organize their information. “That is an enormous time saver and a way for people to put their minds around what they have and what they want to have happen to their assets,” Kemp said. They can also download a form will to better organize their thoughts before meeting with their attorney.
“It’s almost impossible to execute your own will,” Blackmore said. Those adamant about doing their own will should take it to their attorney to execute it properly and file it with the court.
When appointing an administrator, Fowler advised selecting someone who lives in the same state. “If you don’t have someone, appoint your lawyer,” she said.
Appointing a family member may not be the best option. “It’s on a case-by-case basis,” Fowler said. “Don’t assume if your kids don’t get along when you’re alive that they’ll get along when you’re dead. Consider getting a capable person to do it.”
The attorney may not draft the documents either. Blackmore said it’s not a good idea, though technically not a legal barrier. Instead, she advised selecting a professional trustee. “When you set up your estate plan, your trustee will only then come into action,” Blackmore said.
Talking with family about estate plans can be difficult. DeMarchis said the family should have a general idea of the assets and inventory involved. “Figure out who is the most responsive, not necessarily who is the most financially savvy or has any legal expertise,” she said. “Figure out who would be the person who is the most equitable, fair in distributions and will have the easiest time coordinating with your attorney, accountant and financial advisor. They will work with those agents to see your plans through to their conclusion.”
Kemp advised talking with family members sooner rather than later so no one experiences surprises while also feeling emotionally raw from bereavement. “I worked with a family with two daughters and they shared from an early age what they wanted to do with their assets,” Kemp said. “It was a holistic way to handle it. It’s very hard to separate yourself and step back emotionally.”
For those who want more privacy, Fowler advised writing a letter of intent as part of their estate documents. “That explains why they are doing what they’re doing,” she said. “We keep it here and we distribute it when the time comes.”
“There’s no one size fits all,” Blackmore said. “People can be silent because they are afraid to face what their assets are and whether they have enough to make it to the end of their lives. But that doesn’t mean you have to tell your family what you have.” She added that a surprising number of people are unaware of what they own and owe. “Financial literacy is Step A to getting this going,” she added.
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