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Season 2, Episode 9: Women’s Financial Empowerment

Meet The Expert S2 E9 Be Prepared Be Empowered American Funds

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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:

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:

  • Terms of cosigned loans or guarantees
  • Imputed or secondary liability
  • Mortgages or liens encumbering marital property

Situation: Tension with the trustee

Anne needs to ask:

What do our estate plan documents provide?

Anne’s guideposts include:

  • Probate vs. nonprobate assets
  • Dispositive scheme
  • Liquidity issues
  • Family home
  • Effect of divorce
  • Order of death
  • Trustees, executors, agents

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:

  • Family balance sheet
  • Composition of investment portfolio
  • Financial consequences of Joe’s death
  • Retirement assets

Situation: Unfair alimony obligations upon divorce

Anne needs to ask:

What is Joe’s claim to my income and assets in the event of divorce?

Anne’s guideposts include:

  • Source of funds for family expenses
  • Commingling/segregation of assets
  • Anne’s claim to Joe’s assets

Situation: Losing out on her fair share of Joe’s business

Anne needs to ask:

What are my rights to Joe’s interest in the business upon divorce or Joe’s death?

Anne’s guideposts include:

  • Title
  • Value of business interest
  • Compensation structure
  • Put/call provisions
  • Postnuptial agreement

Situation: Trouble with the IRS

Anne needs to ask:

Am I comfortable with the contents of my joint tax return?

Anne’s guideposts include:

  • Consequences of signing joint tax return
  • Areas of potential concern or liability
  • Relationship with accountant

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.

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