Need to adjust your estate plan? Financial professionals share essential insights for updating these documents this year.

Since the onset of the pandemic three years ago, many working women have encountered job losses, pay cuts, and have had to leave jobs to provide care for children and elderly relatives.

These changes have had significant impacts.

According to a survey, 89% of estate planners report that their female clients have experienced adverse effects from these circumstances. Consequently, 87% of planners have updated their female clients' estate plans to align with their current financial realities.

Understanding the Changes

Let’s explore the reasons behind these updates. Kalimah White, a Wealth Strategist, notes that the lack of childcare during the pandemic made it challenging for women to maintain their pre-pandemic work patterns, particularly in roles that couldn’t be done remotely. Financial shifts often necessitate alterations in estate plans.

Moreover, women have used this period to reassess their personal relationships. White observes that the pandemic prompted many to reflect on their lives, leading to potential changes in guardianship for children, beneficiary designations, or powers of attorney. This indicates a reevaluation of whom they trust to manage their estates. “It’s likely that these realizations were brewing for some time, but the pandemic has made it urgent for many women to take action in revising their estate plans,” she adds.

Healthcare costs are another concern, particularly with women living longer. The pandemic has shifted how many women approach these costs, prompting them to consider healthcare expenses before a crisis arises, according to White.

Taking Action

Wondering if it’s time to adjust your estate planning? Given that our financial situations are continually changing, now might be the ideal moment to reevaluate your plans. Key life events, such as having children, caring for aging parents, going through a divorce, retiring, or starting a business, signal the need to update your estate plan.

Changes are warranted whenever your circumstances shift, whether due to life events or changes in tax laws, White explains. Regularly reviewing your estate plan is essential to ensure it reflects your current lifestyle. For example, an estate plan that names an ex-spouse as a life insurance beneficiary could cause distress for a surviving spouse.

Be prepared for potential family conflicts when modifying your estate plan. A survey found that 34% of estate planners noted that communication breakdowns often lead to disputes, particularly in blended families. Open discussions about your plans with trusted family members can help minimize confusion and disagreements later, White advises.

Once you've decided to make changes, collaborating with a reliable advisor—such as an attorney, CPA, or wealth advisor—is vital. White emphasizes that the laws surrounding estates, trusts, and taxes are constantly changing, so expert guidance is essential for keeping your goals on track.

Essentials to Remember

White highlights the importance for women to actively engage in their financial futures and their family’s estate planning needs, regardless of whether they have a partner handling these matters. Statistically, women tend to outlive men, and at some point, 90% of women will take charge of their financial decisions. Therefore, it’s crucial to review and update your estate plans at least once a year, regardless of your relationship status.