Estate planning for those who are widowed or divorced can feel complicated. Even if you have a clear idea of who you’d like your beneficiaries to be, or how you want your estate to be distributed, there are several other factors to consider.
One of the primary roles that single women need to fill in their estate plan are those of a trustee and/or an executor.
Trustees and executors act in a similar capacity when it comes to your estate plan.
Trustee: A trustee is responsible for managing a trust on behalf of its beneficiaries. This is often a concern for single women who have a trust in place to pass their wealth on to their children. Without a spouse or partner in the picture to help manage the trust, many women may feel uncertain about who to turn to.
Executor: An executor’s role is to execute your last will and testament when you pass away. For women who have children who are still minors, it’s critical to fill this role with someone who is trustworthy and has the best interest of your family in mind. If you don’t have children and are single, it’s still critical that you find an executor who understands the type of legacy you want to leave behind and respects the decisions you've made about your estate.
If you’re divorced or widowed with children, setting up a will and a trust to protect your children’s future assets can help to create a smooth transition of wealth if you pass away. Your trust can dictate beneficiaries, dictate how and when funds can be withdrawn and used, and ultimately protect your children’s best interests.
When naming a trustee, you may want to look for someone who is in your family or a close family friend who is in the children’s lives. Naming someone who you trust and who, ultimately, cares for your children is critical. This person may or may not also be the executor of your last will and testament. If you’re widowed, the guardian of your children may be a natural candidate. However, if you’re divorced and don’t want your ex-partner to have access to your children’s inheritance (even if they’ll be their full-time guardian in the event that you pass away), you may look for a neutral third party who can help to monitor the use of funds in your trust.
Creating an estate plan when you’re single and don’t have children may not feel like a priority. However, everyone stands to benefit from an estate plan! Take time to consider the type of legacy you want to leave, and how you want your estate to either to support those around you and/or make an impact. For example, if you’re interested in supporting your extended family or nieces and nephews with your estate, selecting an executor or a trustee who knows your family’s dynamics may be wise. Alternatively, if you’re passionate about leveraging your estate to better your community or support nonprofit organizations you love, enlisting the help of an estate planning attorney who has experience in charitable giving may help you to put appropriate trusts in place to donate easily after you pass.
One way to get started creating an estate plan is by working with a fee-only financial advisor. Together with our clients, we help to create a list of goals and values that guide their financial decisions in their day-to-day and as part of their overarching legacy plan. Want to learn more? Get in touch with us today by clicking here.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education, and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.