Welcome to Season 2, Episode 9 of Meet the Expert® with Elliot Kallen!
In this episode, Elliot Kallen brings on Leslie Geller, Attorney at American Funds, to discuss how women can arm themselves with the knowledge and perspective they need to understand and take control of their financial lives.
Meet Our Guest
Leslie Geller
Attorney, American Funds
Leslie Geller received an LLM in taxation from New York University School of Law, a juris doctor from Boston College Law School and a bachelor’s degree from Washington and Lee University. Leslie is based in Los Angeles.
Women and wealth: the statistics
Based on the data, all women should expect to be solely responsible for their financial well-being at some point in their lifetimes:
- On average, women are expected to live for 5 years longer than men
- About half of first marriages end in divorce
- The median age of widowhood is 59 years
- Women spend an average of 10+ years alone after the death of a spouse
- 69 percent of divorces are initiated by women
But married women are not preparing themselves for this event.
Although they often handle the day-to-day family finances, like paying bills and budgeting, the majority of married women defer to their spouses on matters of financial planning and investing.
Percentage of women who deferred to a spouse on investment and financial planning (61% of millennials)
Percentage of women breadwinners who left major financial decisions to their spouses
Percentage of women who reported satisfaction with the division of labor, with respect to finances
Because it’s more common for women to leave the workforce (for reasons including maternity leave, child-rearing, or caring for aging parents), women have a unique set of needs when it comes to financial planning and guidance.
That underlines the importance of preparing women investors with foundational financial planning information.
Case Study: Anne
Anne and her husband, Joe, are reviewing their financial plan. In the next month, they have meetings scheduled with their accountant, advisor, and attorney.
Anne is in her early 60s. She is a successful marketing executive, and is also the beneficiary of an irrevocable trust created by her father.She has been married to Joe for 20 years, and it’s both of their second marriages. Anne and Joe each have children from their first marriages.
Joe owns an interest in an established, successful business.
Although Anne likes to stay informed on family financial matters, Joe has always managed the relationships with their attorney, accountant, and financial advisor.
Anne’s dilemmas
Anne is concerned about what would happen to her family in the event of a divorce, or Joe’s death – particularly if it happens prematurely.
So, Anne wants to ask the right questions to successfully navigate her family’s financial future and avoid pitfalls along the way.
She wants a thorough understanding of what her rights and obligations would be, so she can avoid legal trouble and litigation, financial difficulties, and family discord.
Things Anne should consider
Here are some of the biggest concerns that Anne may come across – as well as the questions she should be asking her estate planning attorney, accountant, and financial advisor along the way, along with the appropriate steps to take along the way.
Anne should use these guideposts to effectively navigate the planning process and control her financial future.
Situation: A legal battle with her stepchildren over ownership of assets
Anne needs to ask:
What is mine?
What is Joe’s?
What is ours?
Anne’s guideposts include:
- Default marital property law in the state of residence
- Title of family assets
- Treatment of family assets during marriage
Situation: Surprise liability for Joe’s debt
Anne needs to ask:
What do I owe?
What does Joe owe?
What do we owe?
Anne’s guideposts include:
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Situation: Tension with the trustee
Anne needs to ask:
What do our estate plan documents provide?
Anne’s guideposts include:
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Situation: Running out of money after Joe’s death
Anne needs to ask:
If Joe predeceases me, will I be left with the appropriate amount and composition of assets to maintain my lifestyle?
Anne’s guideposts include:
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Situation: Unfair alimony obligations upon divorce
Anne needs to ask:
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Anne’s guideposts include:
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Situation: Losing out on her fair share of Joe’s business
Anne needs to ask:
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Anne’s guideposts include:
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Situation: Trouble with the IRS
Anne needs to ask:
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Anne’s guideposts include:
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Estate planning tips for a blended family
If you are on your second, third, or fourth marriage, blending finances and assets can complicate and permanently strain family dynamics.
Leslie recommends that everybody keep their assets separate, and stay out of each other’s businesses. Why? Once you start blending assets in accounts, then the surviving spouse has a claim.
Instead, select a third-party individual or a financial institution to serve as Executor for your estate.
As a wife, make sure you retain the right to remove and replace a Trustee.
Fair vs. Equal: What’s the difference?
“Fair” is subjective. “Equal” is objective. Each one of your children will have different needs, depending on:
- Their profession
- Whether they marry
- Who they marry
- Where they live
If you want each child to receive an equitable amount, you can incorporate equalization provisions in your trust. In short, an equalization clause states that if any assets pass outside of probate to any of the beneficiaries of the estate, then the Executor of the estate can adjust the shares of the beneficiaries from the probate assets accordingly.
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DISCLAIMER: Prosperity Financial Group and Meet the Expert® with Elliot Kallen do not make specific investment recommendations on Meet the Expert® with Elliot Kallen or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of the Meet the Expert® with Elliot Kallen guests, and not necessarily of Elliot Kallen or Prosperity Financial Group.
