As parents age, it is more important than ever to discuss estate planning with children.
According to a recent Family and Finance study from Fidelity Investments, nearly all families recognize this fact, with 97% of them acknowledging the importance of such conversations.
And yet, these conversations aren’t happening as often as they should. Nearly half of the families surveyed by Fidelity admitted they had not yet had such a conversation.
one in Summary Regarding Fidelity’s findings, Timothy Habershon – managing director and founder of the Fidelity Center for Family Engagement – says:
“As people get older – especially after age 70 – they often become less willing to talk about things like estate planning, long-term care, or how to include their family in planning and decision-making. But with trillions of dollars preparing to change hands, millions of families are going through a generational transition.”
Today American women are wealthier than ever. In fact, it is estimated that by 2030 women will own nearly two-thirds of all personal wealth in the US. report By McKinsey.
According to a Bank of America Institute report, women’s rising economic status is due to recent wage increases and the increasing amount of inherited wealth.
Fidelity says most women report having a financial plan. But the facts show something else. In fact, a large percentage of women lack the following key documents – including the most important ones.
1. Will or estate planning
Fidelity says only 30% of women have a will or estate plan or both. This may be the most important legal financial document.
As we mentioned earlier, a will can set out what will happen to your valuables when you die. It can also determine who will serve as your executor and explain the funeral plans you would like to see executed.
An estate plan usually includes a will, but it also includes other documents that outline what should happen to you and your assets if you die or become incapacitated.
Without a will or estate plan, you may be left behind unnecessary chaos as your family and the legal system try to determine what will happen to your estate.
For more information on this important topic, see “7 Things You Should Not Include in Your Will.”
2. Health Care Power of Attorney
According to Fidelity, nearly one-quarter of women – 27% – have handed over health care power of attorney. Taking this step allows you to name a person who will make medical decisions on your behalf in the event you cannot make such instructions.
Some people who assign health care power of attorney do so instead of completing a living will, another document that helps detail your preferences for medical treatment when you are too ill to do so. Others have both a health care power of attorney and a living will.
3. Financial power of attorney
According to Fidelity, only 24% of women have financial power of attorney. A financial power of attorney allows you to designate someone to make financial decisions on your behalf.
Without a power of attorney, your loved ones will have to go to court to appoint a guardian to make financial decisions on your behalf when you are unable to do so. This can be a time consuming and expensive process.
To learn more about protecting yourself and your loved ones, read “8 Essential Legal Documents to Make Before It’s Too Late.”