In 1972, men were the primary or sole earner in 85 percent of opposite-sex marriages, according to the Pew Research Center1. By 2022, that number had shrunk to 55 percent. According to that same study, in that same time, the number of marriages where the woman was the primary or sole earner grew from 5 percent to 16 percent, and the number of egalitarian marriages (where the man and the woman earn roughly the same) grew from 11 percent to 29 percent.
What鈥檚 coming next, however, could be far more transformative. A 2020 McKinsey2 study estimated that by 2030, American women could control as much as $30 trillion in transferred wealth.
Known as the 鈥済reat wealth transfer,鈥� it has the potential to reshape the economy and the financial industry. Because women tend to live longer than men, much of that wealth may pass to spouses. The rest could be passed down to the next generations, offering opportunity and the need for careful planning 鈥� a process that should start prior to (not after) an inheritance.
For parents, leaving an inheritance is an opportunity to leave one last gift, but talking about it can be uncomfortable for everyone, whether it鈥檚 a conversation between spouses or between parents and children. But it鈥檚 an important conversation to have 鈥� if only to help ensure wishes are followed and affairs are handled properly after a loved one鈥檚 passing. There are also tax implications and potential family disputes to think about. It may seem like a difficult discussion, but it could be easier than you think while helping save a world of difficulty later.
If you鈥檙e unsure how to start, keep it simple and ask your parents, 鈥淒o you have an estate plan?鈥� If there is no estate plan, it鈥檚 an opportunity to emphasize the importance, the benefits and the fact that estate planning isn鈥檛 just for the wealthy. Nearly everyone benefits by putting a plan in place.
If there is an estate plan, find out where the paperwork is and which financial professionals have worked on the plan. It鈥檚 also worth discussing passwords, account numbers and other important financial information.
Is there a living will or any health care directives? How much is the estate worth and how is it structured? Having a better understanding of those basic facts can help smooth the process and allows the surviving family to better plan for whatever inheritance will come their way.
When you do inherit money or property, the first thing to remember is you aren鈥檛 in a rush. Take time to process and understand your new financial situation. A financial professional can help you consider the tax implications, develop tax-reduction strategies and plan your financial future 鈥� including your estate planning, if you haven鈥檛 yet started 鈥� in a way that allows you to develop a retirement planning strategy that matches your financial goals.
While you鈥檙e having these discussions, it鈥檚 a good time to make sure your estate is in order. Do you have a will? It鈥檚 important for more than just figuring out who gets what 鈥� especially if you have minor children. A will can ensure they鈥檙e looked after according to your wishes without the state getting involved.
A trust is another option to explore. It can prevent your estate from going into probate and make the distribution of assets easier. And finally, power of attorney is important. Someone will need to make sure your bills are paid and decisions are made with your best interests and wishes in mind.
An inheritance can help you in any number of ways. It can pay for education or assist you in your retirement, but only if you plan well and then execute that plan. A financial professional can help you organize and answer the most important questions.
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