Common Mistakes Some Smart Women Still Make With Money, Estate and Legal Planning

I’m fortunate to deal with a number of successful women across the U.S. Whether they are C.E.O.s, doctors, some other kind of professional or business owner or simply the stay at home family C.E.O. that helps manage the family’s wealth and success.

Over the last ten we’ve seen both positive and negative behavior patterns among different demographics, including women, repeated on a consistent basis. While these issues certainly aren’t exclusively things that women do, they seem to be at he forefront of many of the problems that we have to help them through.

Some Common Errors:

1. Letting their husband/significant other mange the finances in a vacuum, this can be financially fatal in the event of a death, divorce or illegal act by the husband (think Mrs. Madoff);

2. Being underinsured on their own life, disability and long term care insurance. I often see couples with millions in life insurance on the husband and only a courtesy $250K on the wife;

3. Not protecting wealth and being proactive about risk. Many women are great earners and great spenders but overlook the exposures that could put everything they own at risk – they need to understand Asset Protection planning, at least at a basic level;

4. Working on trust instead of with formal legal agreements like contracts;

5. Being “too nice for their own good”  and not ending relationships that are negative and toxic, both personally and professionally with employees and partners.

6. Paying themselves LAST. Many successful business women put the business, employees and family before themselves and their own savings and solvency, you can’t be generous if you’re broke, protect the source;

7. Not getting a prenuptial agreement;

8. Not getting what is owed to them out of pride, aversion to conflict or frustration, the old, “They owed me more but I was just mentally done with it and wanted to move on”. Great, move on with your money.

9. Not knowing where key documents are and who the players in their financial and legal world are. you should be able to tell me the name of your lawyer and financial advisor without having to look it up.

I realize this may sound chauvinistic, it’s not. Take it as  the observation of someone who has dealt with these issues for a very diverse national client base for a decade. A list of issues and bad behavior specific to men would be even longer.