Leadership and Executive Development for women of all races, cultures and backgrounds
Issue link: https://diversitywoman.epubxp.com/i/632328
DW Life > 54 D I V E R S I T Y W O M A N Winter 2016 d i v e r s i t y w o m a n . c o m attorney at Stoner Law Ofce in Philadel- phia. "If your estate is large enough, estab- lish trusts as a legacy to support multiple generations, or set up some kind of trust to support your church or your alumni." In the absence of a will, distributing your assets becomes the responsi- bility of the state in which you resided. MISTAKE NO. 4: Assuming you're too young for disability insurance. Don't wait until you turn 50 to buy disability insur- ance. More than 50 percent of the population will become disabled before age 65, says Lee. If you have the discretion- ary income, buy it early. "You may want to even start early with long-term care insurance, so that if you need additional assistance in later years, it is covered by insurance," says Stoner. Taking action can determine the quality of care you receive. MISTAKE NO. 5: Leaving advance direc- tives undone. Whether you are having minor surgery or sufer from a debilitating medical condition, you need to have medical directives in place so you can stipulate who can make decisions for you. "It's not just about your money, it's about your health as well," says Lee. A health-care proxy and a liv- ing will are two types of advance directives. Tey communicate how medical decisions should be made if you cannot make your own decisions. MISTAKE NO. 6: Delaying creating a power of attorney. If you become incapaci- tated—meaning you are unable to make de- cisions—a power of attorney is critical. It's a document that gives your agent (the person you choose) the authority to enact fnancial and health-care decisions, pay creditors, rec- ommend a guardian, and even make end-of- life and medical treatment decisions on your behalf. Choose someone you trust, because this person will have the right to handle one issue (a specifc power of attorney) or most of your personal and fnancial matters (a general power of attorney). "If you don't have a power of attorney and something happens to you, then your family can't do anything to handle your afairs unless they become a court-appointed authority," says Stoner. For women with no husband or children, it's even more important to have a power of attorney and a will. "If you have a spouse and children, there's an assump- tion they will look out for your best inter- est," says Stoner. "Otherwise, you have to rely on friendship, which makes people stop the process of appointing a power of attorney because they don't know whom to appoint, let alone whom to leave their as- sets to." Tere are several types of powers of attorney, depend- ing on your needs. Discuss your options with an estate-planning attorney. MISTAKE NO. 7: Neglecting to transfer real estate titles after a divorce. You've just married the love of your life, but he still owns property with his ex-wife. If he has either moved on from the property or suddenly dies, you can only inherit his half. "I've had women clients who have to deal with a prior wife who is not willing to give up her half, even though it might have been agreed to as part of the divorce settlement," explains Stoner. To avoid this situation, make that title transfer a part of the divorce proceedings, and remember, whoever owns the deed owns the property. MISTAKE NO. 8: Misunderstanding probate vs. nonprobate assets. All of us would like to pass on a legacy of fnancial wealth to loved ones without them having to go through costly probate proceedings. State law controls the process for requir- ing whether your loved ones go through probate or not. Probate is a legal process that involves fnding and securing a per- son's assets, liquidating liabilities, paying taxes, and distributing property to heirs. "Nonprobate means an asset automatically transfers to another person by contract, as is the case with an annuity, a pension, joint bank accounts, or a life insurance policy," explains Stoner. Tis is also the case with assets you own jointly with your spouse or others, assets in your name only that have a payable on death or transfer in death designation, and assets owned by your revocable living trust. "Having a will is just to ensure that, if you have an asset in your name alone at death, you are di- recting where it should go," says Stoner. If you want your assets to pass to your heirs without going through probate, create a living trust, which places your assets and property "in trust." Tose assets are man- aged by a trustee (such as an attorney) for the beneft of your benefciaries. MISTAKE NO. 9: Assuming your surviv- ing spouse will receive everything and skip probate. Since laws vary state to state, don't assume that a surviving spouse will automatically receive everything. "If your spouse's accounts are in his or her name only, the only way to get those accounts open is to go through probate," says Stoner. If the property is owned in joint tenancy, if it is community property with the right of survivorship, if it is an account owned by several people, or generally, a bank account transferred to someone when the owner dies, then generally, the property goes to the surviving spouse. Bottom line: Check with your estate-planning attorney to de- termine how to protect your assets. MISTAKE NO. 10: Forgetting to update your estate plan. "Review your plans at least every three years, but always do so in the face of the fve D's: Death, Disability, Divorce, Distance [i.e., you move], and De- scendants," says Lee. As you make plans, share your wishes with your family. Yes, it's difcult to dis- cuss end-of-life decisions, but leaving your family to make critical decisions about your fnal wishes is stressful and confusing. Tell them what you want, how it should be ex- ecuted, and where to fnd the information to get things done. "Everyone thinks that they are going to do an estate plan," says Davis, the frst woman and person of color to hold an ex- ecutive vice president title at Barnabus Health. "If there are people in this world who you care about, do it yesterday. Other- wise, you are placing them at a signifcant disadvantage." DW Tanisha A. Sykes is a personal fnance and career development expert and seasoned jour- nalist. Follow her on Twitter @tanishastips.