A specialist accredited for wills and estates has called for advisers to be more proactive in identifying inadequate estate plans, which disadvantage women more often than men.
Anna Hacker, national manager of estate planning at Australian Unity Trustees, says studies show women live longer than men and are more likely to be in a weak financial position as they age. As a consequence, they are also more likely to be disadvantaged by a poorly constructed estate plan.
“Statistically, women tend to outlive their male partners and will, therefore, find themselves in the position of having to deal with joint bank accounts, superannuation death benefits, life insurance lump sums and so on, on their own,” Hacker says.
These issues usually emerge at a time, she says, when women are grieving and emotionally vulnerable. This often opens the door to elder abuse, such as family members denying them control of their funds or forcing them to change their will.
“It’s also the case that women from older generations may not have worked throughout their adult lives, and may have left the finances in the control of their husband,” she says.
While this dynamic is changing, it is still common to see widows who have not been involved in the family finances flounder when their partner dies.
“This may change in the next generation,” Hacker says, “but my experience is that when the husband passes away, the wife is quite often not across the finances.”
Advisers play a key role in identifying possible instances of insufficient or disadvantageous estate planning, Hacker says. While it’s common for people to discuss wills with their adviser around events such as marriage, divorce or buying a property, other significant events often fail to trigger an appropriate estate planning check.
“What really tends to get missed is an inheritance,” Hacker says. “When I think of my clients, so few of them think to change their will when they receive one. Given that it usually occurs when the mortgage is already paid off, there are often large assets like shares or parcels of money that need to be dealt with individually.”
Broaching the topic can be problematic for advisers, but Hacker says that if you have a genuine relationship with the client, “it’s easy to have a genuine conversation about what’s right for them”.
“Be direct,” she says, “but empathetic. Don’t skirt the issue. Keep in mind that you are the one they are relying on to have that conversation, and you’re in the best position to navigate the discussion.”
Advisers should be on alert for wills that unfairly discriminate or limit a person’s access and control over the estate if their partner dies.
“If you have a couple [whose wills have] significant differences in the way they’re constructed, that doesn’t necessarily mean they are wrong, but it may be worth talking through how it would work in practical terms with the couple,” Hacker explains.
If the document doesn’t match what you’d normally see in an estate plan, and you don’t understand the reasons why, it’s probably worth bringing up, Hacker says.
“The main thing is communication,” she emphasises. “Get it out in the open, discuss it, and let them air any grievances.
Women and philanthropy
Hacker’s colleague, Emma Sakellaris, who is executive manager at Australian Unity Trustees, says women’s longer lifespan makes them more likely to receive a ‘double inheritance’ than men.
“Although life expectancy is increasing for both men and women in developed countries, women are still living longer than men,” Sakellaris explains. “As such, they are likely to inherit twice – from their parents, and then from their spouse.”
This underscores older women’s need for financial advice, Hacker says.
Sakellaris adds that the double inheritance contributes to a wide disparity in philanthropy across genders. Studies show that 73 per cent of donors to charity are women, and the most common age bracket for givers (33.8 per cent) comprises those born between 1946 and 1964.
Despite high-profile philanthropists such as Mark Zuckerberg and Bill Gates, Sakellaris says, “It is, in fact, women who are really moving the dial on philanthropy around the world. Women also give to more organisations than men, act collaboratively in their philanthropy, and pool their giving with others.”
Estate planning is among the key topics at Conexus Financial’s Post Retirement Conference, retail day, in Sydney on March 21. To register, click here.
TOPICS: estate planning