Estate planning is one of those topics that many of us know we should address but often put on the back burner. The truth is, having a solid estate plan is not just about allocating assets—it’s about safeguarding your future, your family, and your peace of mind.
For women, particularly those navigating significant life transitions like divorce, widowhood, or a career change, estate planning takes on an even more crucial role. It’s about ensuring that your wishes are honored and your loved ones are taken care of in the way you intend.
In a recent conversation with Jane Bassett, a seasoned estate planning attorney with over 31 years of experience, we delved into what makes estate planning so vital, especially for women. Jane’s expertise spans a broad range of life scenarios—from aging and disability to the intricacies of adoption and assisted reproduction.
We covered everything from the basics of what estate planning entails to the specific challenges women face after divorce, and how to ensure that your personal and financial interests are protected, no matter what life throws your way.
fFor those who want to dive deeper into the conversation, the full video is available on our YouTube channel, where Attorney Bassett shares even more detailed advice.
What is Estate Planning and Why is it Crucial for Women?
Estate planning is often misunderstood as something reserved for the wealthy, but as Jane explains, it’s for everyone. “Every single one of us has an estate. We are our own estate—our income, property, and personal belongings.”
This means that estate planning is essential for anyone who wants to retain control over their assets and personal decisions, especially women who might be going through significant life transitions such as divorce or widowhood.
Jane emphasized that estate planning is about protecting your autonomy and ensuring that your wishes are carried out, particularly when it comes to your children and any dependents. Without an estate plan, someone else may end up making decisions for you.
What Should Women Look for in an Estate Planning Attorney?
Choosing the right attorney can make all the difference in your estate planning process. Jane compares it to choosing a doctor, stressing that “if you don’t trust them, you won’t follow their advice.” She advises women to find someone they are comfortable with and who listens to their unique situation rather than applying a one-size-fits-all approach.
Your estate plan should reflect your family dynamics, personal values, and future aspirations. Jane also noted that it’s important to choose someone who doesn’t push cookie-cutter solutions but instead takes the time to understand what’s important to you and tailors the plan accordingly. If you don’t feel a good vibe with the attorney you’re consulting, it’s okay to find someone else who is a better fit.
“Choosing the right attorney is like finding a doctor—you need to trust them fully.”
Common Misconceptions About Estate Planning
One of the most common misconceptions Jane encounters is that estate planning is only necessary for those with substantial wealth.
“Everyone has an estate, regardless of the size of your bank account,” she says. Another common myth is that everyone needs a trust. While trusts are valuable tools in certain situations—such as when leaving money to minors, managing assets in a blended family, or protecting assets for a disabled beneficiary—they are not necessary for everyone. Jane explains that many people can accomplish their estate planning goals with simple beneficiary designations and wills.
However, she also cautions against falling for the “one size fits all” approach when it comes to trusts. Understanding whether a trust is right for you depends on your specific circumstances which we cover in more depth on here.
Challenges Women Face in Estate Planning After Divorce
Divorce brings significant changes, and updating your estate plan is one of the most critical steps to take once the process is finalized. Jane emphasized that “if you’ve named your ex-spouse as a beneficiary or patient advocate, those designations are often automatically revoked upon divorce.”
However, certain assets, like employer-sponsored life insurance, may still list your ex-spouse, so it’s important to make changes proactively. Jane also pointed out that after a divorce, many women are emotionally and financially drained, making it even more essential to ensure their estate plan is updated to reflect their new reality.
Failing to do so could result in unintended consequences, such as your ex-spouse making decisions about your assets or healthcare.
Understanding Probate
Probate is often misunderstood and can be a source of stress for many families. It is the legal process of administering a deceased person’s estate, and it covers any assets that do not have a joint owner, beneficiary designation, or trust designation.
“Probate can take anywhere from six months to several years, depending on the complexity of the estate,” Jane explains. Assets like life insurance policies, retirement accounts, and jointly owned property typically bypass probate, but anything left without such designations will go through this process.
Jane also highlighted that probate is a catch-all for anything left unmanaged, and it can be costly and time-consuming. To avoid probate, Jane advises ensuring that all assets have clear beneficiary designations or are placed in a trust.
“Not having a will means the law decides who gets your assets, not you.”
Essential Estate Planning Steps for New or Single Parents
For parents, especially those newly single, estate planning is crucial to ensure your children are cared for if something happens to you. Jane advises setting up a trust to manage your children’s assets and naming a guardian in your will. “If you leave assets directly to minor children, the court will appoint a conservator to manage that money, and by law, the other parent has priority to be that conservator,” Jane explains.
This could mean that your ex-spouse ends up controlling your child’s inheritance. Jane also discussed the importance of expressing your guardianship preferences in your will, even though you can’t override the other parent’s rights unless legally terminated. As children grow older, they can express their preferences to the court, which can influence guardianship decisions.
Updating Your Estate Plan After Major Life Events
Jane strongly recommends reviewing your estate plan every three to five years or after any major life event, such as a birth, death, marriage, or divorce. “Life moves fast, and what was appropriate a few years ago might not be today,” she says. For example, if you named a sister as your trustee, but she develops a condition like dementia, you’ll need to update your plan to ensure someone else can step in.
The same goes for significant life changes in the people you’ve named in your estate plan. Jane also pointed out that failing to update your estate plan can lead to unintended consequences, such as outdated beneficiary designations leading to assets going to the wrong person or even into probate.
Managing and Protecting Inherited Assets
When inheriting assets, especially after a significant life change like divorce, it’s important to keep them separate from joint assets with a new spouse. Jane advises keeping inherited accounts in your name alone to protect them from becoming marital property.
“If you mix inherited assets with joint assets, they could become subject to division in a divorce,” she warns. Additionally, Jane suggests using beneficiary designations to ensure these assets go to the intended recipients, such as your children, rather than a new spouse.
She also discussed the risks of putting adult children on your accounts as joint owners, which can expose those assets to your children’s creditors. Instead, Jane recommends using a power of attorney to give them access without transferring ownership.
“Estate planning is about more than just money; it’s about peace of mind for you and your loved ones.”
The Role of Taxes in Estate Planning
Taxes can play a significant role in estate planning, and it’s important to understand how they might affect your estate. While most inherited assets are not subject to income tax, there are exceptions, such as tax-deferred accounts like IRAs or 401(k)s. “You will be responsible for paying taxes on withdrawals from these accounts, but there are strategies to minimize the tax burden,” Jane explains.
Estate taxes typically apply only to very large estates, but capital gains taxes can impact those who inherit appreciated assets like real estate or investment accounts. Jane also pointed out that when you inherit property, the capital gains tax basis is reset to the value on the date of the original owner’s death, which can significantly reduce your tax liability if you sell the property later.
Understanding the Importance of Beneficiary Designations
Jane emphasizes the importance of keeping your beneficiary designations up to date, particularly after major life changes. “Without updated beneficiaries, assets like life insurance and retirement accounts may end up going through probate or, worse, to someone you no longer wish to receive them,” she explains.
This can be particularly problematic if you’ve named an ex-spouse or someone who has since passed away. Keeping these designations current ensures that your assets go directly to the people or causes you intend.
Jane also discussed the importance of naming contingent beneficiaries, so if your primary beneficiary predeceases you, the assets will still pass according to your wishes.
The Significance of Power of Attorney in Estate Planning
As we age, it becomes increasingly important to have a power of attorney in place. Jane explains, “A power of attorney allows someone you trust to manage your affairs if you become incapacitated.” This document is especially critical in ensuring that your financial and healthcare decisions align with your wishes, even if you’re unable to make those decisions yourself.
Jane also noted that in Michigan, the Medical Power of Attorney, also known as a Patient Advocate Designation, is a vital document that allows you to name someone to make medical decisions on your behalf.
This document should be updated regularly and should include a backup person in case your primary advocate is unable to serve.
How Women Can Educate Themselves About Estate Planning
The internet can be a double-edged sword when it comes to learning about estate planning. While it’s a great place to start, Jane cautions against relying solely on online information, as laws vary by state, and not all advice is applicable or accurate.
“Don’t be afraid to consult with an attorney,” Jane advises, noting that a professional can provide personalized advice that’s relevant to your specific situation. She also suggests being cautious with free seminars or “trust mills” that may offer cookie-cutter solutions without considering your unique needs.
If cost is a concern, Jane recommends asking about payment options or looking into legal services insurance, which some employers offer as a benefit. For those interested in learning more, Jane shares even more tips in the full video available on our channel.
Final Thoughts
Estate planning is a deeply personal process that requires careful consideration and professional guidance.
As with any legal information you find online, consult a local estate planning attorney for customized guidance based on your state. Because as Jane aptly puts it, “If it’s not down in writing, it’s not going to happen.” Taking the time to plan now can save your loved ones significant stress and uncertainty in the future.
For those who want to explore these topics in more detail, be sure to watch the full video of our conversation here. Jane shares even more insights and practical tips that can help you take charge of your estate planning journey.
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