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Estate planning tips for Georgia women: estate tax exclusions

Estate planning is a matter of financial literacy, but the estate planning field is still primarily dominated by men. Georgia women should make sure that they are at least equally involved in the estate planning process because the consequences of not being involved in the estate planning process are frequently more serious for women than men.

Forbes reports that almost 42 percent of women age 65 and older are widowed, whereas only 14 percent of men in the same age group are widowers. Women also tend to have longer life spans, lower lifetime earnings, and older spouses, which means that the financial safety of many Georgia women will be compromised if proper estate planning is not done.

One of the most important things that every Georgia woman should know is what deadlines apply after the death of her husband. A surviving spouse can take advantage of “portability” rules which allow the unused estate tax exclusion of the deceased spouse to be used by the surviving spouse.

Forbes reports that portability is not an instant process and that the deceased spouse’s executors have to file an estate tax return to take advantage of portability. The exclusion is currently at $5 million, so a widow can use up to a $10 million exclusion if her husband did not need to use any of it.

Even those Georgia widows who do not have $5 million should see that their husband’s executor files an estate tax return because a widow’s financial situation may change.

There is also a nine-month deadline for turning down, or disclaiming, any inheritance from a spouse. Disclaiming is the act of turning down an inheritance so it can go directly to surviving children or a trust. Although it may not be necessary or advantageous to disclaim an inheritance under the current laws, widows should be aware of the applicable deadlines because the estate tax laws many change.

Source: Forbes, “Estate Planning For Women (And the Men Who Love Them)” Deborah Jacobs, 5/19/11