Female Financial Future Courage Acid Test: Ready to take it?

June 30, 2004 -- The following quiz will help women assess their planning personality. Answer yes or no to the following questions to gauge your money management skills, then check your answers below and get advice on improving your financial savvy.

1.    Is it important for me to be informed about my family's financial situation, including the account numbers and locations for all of our bank accounts, IRA's, stocks, and insurance policies?

2.    Do I need to worry about outliving my money?

3.    Should estate planning decisions be made solely by my planner or spouse because he/she knows best?

4.    Will asking questions about financial issues make me look stupid?

5.    Am I supposed to dread visits with my estate planner who has little patience and intimidates me?

6.    Must I outline my short-term and long-term financial goals?

7.    Is losing a little in the market now worth it if I can make a big score later?

8.    Do I have to know my net worth and how much I need to live on?

9.    Is having a will which I update regularly important?

10.    Are there special arrangements to be made to ensure my children will receive their full inheritance?

11.    Will jointly owning assets with my husband safeguard us and protect our children's inheritance?

12.    Can I trust that my spouse will make the right decisions for me if I become incapacitated?

Answers:

1.    YES Because men have historically handled the finances, women must make a conscious effort to be informed about their family's assets. "Though today a high percentage of women are employed outside the home and handle their own estate planning, that was not the case fifty years ago. Women who are baby boomers or older are more likely to have maintained the home and left money matters up to their spouses, which is problematic if the spouse dies or becomes incapacitated without transferring his knowledge," stresses Scifo.

2.    NO According to Scifo, one of the most common traits, especially of our typical senior women client, is their fear of outliving their money. "No matter how many times I tell them their fears are unfounded, that they could never spend THAT much money in their remaining years, they still have concerns," he states.

3.    NO Knowledge is power, believes Scifo, who goes to great lengths to ensure that his clients thoroughly understand their financial situation. "Far too often women will say, ‘John, just tell me what to do.' Though I appreciate my clients' trust in me, I refuse to do that. No matter how long it takes, I make sure all my clients, but particularly women, are educated enough to make their own informed decisions."

4.    NO Scifo says that asking questions is essential to building a knowledge base and alleviating fears. "I guide my clients and offer advice, but encourage them to ask questions that lead to more in-depth discussions." The old adage "knowledge is power" can never be overstated.

5.    NO "It's your money!" exclaims Scifo, "Why shouldn't you feel comfortable voicing your opposition if you disagree with an advisor's recommendations?" Feeling intimidated or pressured by your estate planning professional is counterproductive. For the partnership to yield maximum results, there needs to be a foundation built on trust and mutual respect.

6.    YES with the help of your estate planning professional. Mapping out where you are now and where you want to be going forward is necessary for creating an efficient estate plan. "Consideration must be given to current assets and how the client wishes to allocate those assets in the future," suggests Scifo.

7.    MAYBE Depending on your investment style and future plans, you may be more or less tolerant to investment risk. "High-risk investments may yield a higher return, but they are just that: high risk. However, there are a number of investment vehicles available, depending on your age, such as immediate annuities and life insurance policies, with NO risk that can yield substantially higher results," maintains Scifo.

8.    YES Again, knowledge is power. Knowing how much you have and how much you will need frees you to sit back and enjoy your life without worrying whether or not you'll have enough to live.

9.    YES and NO Surprise! Although having a will is far better than having nothing at all, a revocable living trust that you update regularly supercedes that. A will guarantees a date in probate court. A revocable living trust avoids probate and allows for lack of competency instructions.

10.    YES Having an estate tax plan is key to ensuring that your heirs get what is rightly theirs and while minimizing or eliminating the amount of estate tax, your heirs may have to pay.

11.    NO Surprise again! Though jointly owned assets are most common, they can be a huge mistake. When spouses jointly own assets, it can create an extra state tax of $705,000. In addition, if one spouse dies, the surviving spouse receives all the assets. If the surviving spouse remarries, the new spouse is then eligible to receive all those assets, not your children.

12.    NO Scifo warns against assuming that your partner knows your wishes and will make the right decisions for you. "Simply put it in writing while you still have your faculties," he advises.

For more information, call Carol Bloom Stevens, MSCO, 914-251-1500, ext. 112.



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