Health accounts, including HSAs and FSAs, are designed specifically for covering out-of-pocket medical expenses (excluding your monthly premiums). While they operate similarly, HSAs and FSAs offer distinctly different features and eligibility requirements.

Let’s take a look at what makes these accounts unique, and what sort of costs you can cover with your tax-advantaged health account.

Health Savings Accounts (HSAs)

An HSA (Health Savings Account) is available to individuals and families enrolled in a qualified High Deductible Health Plan (HDHP). If your health plan meets IRS criteria and you don’t have disqualifying coverage (like an FSA through a spouse or a Medicare plan), you’re typically eligible to contribute. 

The HDHP criteria for 2026 are:

• Individual deductible: $1,700 or higher
• Family deductible: $3,400 or higher
• Individual out-of-pocket maximum: $8,500 or less
• Family out-of-pocket maximum: $17,000 or less

And the contribution limits for an HSA this year are:

• Individual: $4,400
• Family: $8,750

Once you open an HSA (either with your employer or a separate financial institution), the account is yours to keep, even if you leave your job. The funds in the account don’t expire, meaning you can allow your savings to continue compounding and growing for as long as you like.

While you cannot use your HSA to cover your monthly premiums, it can be used to cover just about any other healthcare-related expense:

• Deductibles
• Co-pays
• Prescriptions
• Medical equipment (beds, walkers, CPAP machines, etc.)
• Over-the-counter medications
• Medicare premiums (after age 65)

HSA Tax Treatment

Aside from helping you build dedicated savings for medical costs, HSAs also boast a triple tax advantage:

1. Contributions are made pre-tax (or tax-deductible if made on your own)
2. The funds grow tax-deferred 
3. Withdrawals are tax-free when used for qualified medical expenses

That combination makes HSAs one of the most tax-efficient savings vehicles available. Unlike many other benefit accounts, HSA funds can be invested and allowed to grow over time, which is why some people choose to pay current medical costs out of pocket and treat their HSA more like a long-term savings bucket.

After age 65, HSAs become even more flexible. You can still take tax-free withdrawals for qualified medical expenses, but you can also withdraw funds for non-medical purposes without a penalty (though those withdrawals are taxed as ordinary income). 

Flexible Spending Accounts (FSAs)

Unlike HSAs, flexible spending accounts (FSAs) are not tied to high deductible health plans. An FSA is actually an employer-sponsored benefit account that allows you to set aside pre-tax dollars from your paycheck to pay for qualified medical expenses. 

Your FSA eligibility depends on whether your employer offers it as part of your benefits package. If they do, you can usually elect an annual contribution amount during open enrollment and fund the account through payroll deductions.

FSAs are also tax-advantaged, since contributions are made pre-tax, which lowers your taxable income for the year, and withdrawals for qualified medical expenses are tax-free as well.

Use It or Lose It

Most FSAs are subject to a “use it or lose it” policy, meaning unused funds are forfeited if not spent by the plan deadline (usually end of year). Some employers offer limited flexibility, such as allowing a small rollover amount into the next year or a short grace period to spend remaining funds. FSAs are also employer-owned, so if you leave your job, you typically forfeit any unused balance unless you qualify for continuation coverage.

Common Questions from HSA and FSA Participants

So, what can you buy with the funds stored up in your HSA or FSA? The IRS continues to expand eligibility, with more items getting added to the list every year.
We thought it’d be helpful to share some of the most frequently asked questions people have about qualifying HSA and FSA expenses:

Are over-the-counter pain relievers considered HSA-qualified expenses?
Yes, over-the-counter (OTC) medications, including pain relievers, can count as HSA-qualifying expenses. This is a relatively recent change that went into effect on January 1, 2020 as part of the CARES Act. As with other purchases, keep your receipts as proof of eligibility if necessary.

Where can I find a list of HSA or FSA-qualified expenses?
You can find the most current list of qualified medical expenses in IRS Publication 502.

Can I use my HSA for alternative medicine treatments?
The list of eligible expenses for HSAs has grown considerably and includes some alternative treatments, including Christian Science practitioners, acupuncture, and naturopathy. You may be required to provide a letter of medical necessity (LMN) from a doctor for the expense to qualify.

Can I use my HSA card at major pharmacy chains for qualified expenses?
Yes, you can use your HSA card to purchase qualifying items at major pharmacy chains and grocery stores (for eligible expenses only). You can also purchase qualifying items on dedicated marketplaces, such as HSAStore.com and FSAstore.com.

What products are covered under HSA/FSA qualified expenses?
As the criteria for HSA and FSA qualifying expenses continue to widen, the list of products and services has grown exponentially. Expenses generally qualify if they’re related to your physical and mental health. Aside from prescriptions, co-pays, deductibles, and other common medical costs, this can include some surprising medical expenses too including skin treatments and red light therapy masks, bicycles, smart watches, sun screens, air purifiers, etc. Just keep in mind, some expenses do require a letter of medical necessity from a doctor.

Need Help Maximizing Your Health Accounts in 2026?

There’s really been no better time to open an HSA or FSA, considering the rising cost of healthcare and expanded eligibility for qualifying expenses. If you have the opportunity to contribute to a tax-advantaged health account, it’s well worth the consideration, even if you’re in good health. Given the vast number of eligible expenses, it’s likely you’ll find some way to spend your savings (even when you’re facing “use it or lose it” deadlines).

If you’d like to discuss your options or learn more about making the most of your health savings this year, reach out to our team anytime. We’d be happy to discuss how your healthcare costs play into your greater financial picture and goals.

The post What Qualifies as an HSA or FSA Expense? Your 2026 Guide to Maximizing Health Savings appeared first on WealthChoice.

It’s understandable to feel uncomfortable. Talking about a prenup can feel like questioning the strength of your relationship or your partner’s integrity. Here’s the good news: while it might not spark as much romance as a getaway to the tropics, it’s a proactive financial planning tool that can actually strengthen healthy communication, set expectations, and head off future disagreements.

So, what’s the best way to tackle such a potentially touchy subject? 

Frame it as a mutual strategy session, not a test of love. Here’s what you need to know and how to broach the prenup conversation in a way that honors your commitment to one another as well as your financial reality.

What a Prenup Actually Protects (and What It Doesn’t)

Think of a prenup as a conversation starter to help you discuss what’s yours, mine, and ours, creating a clear distinction between assets you own before marriage (separate property) and assets gained after the wedding (marital property). For high-earning women, this can help protect:

• Business interests
• Stock options
• A professional practice built prior to the marriage
• Retirement Accounts
• Investment portfolios

A prenup can also protect you and your partner from negative assets incurred before you say “I Do,” like credit card debt or student loans.

What it can’t do is predetermine child custody, support, or visitation rights. It also can’t override certain state laws or dictate routine matters of married life, like whether the silverware goes right side up or down in the dishwasher. 

The biggest misconception about prenups is that they spell certain doom for a relationship. In reality, they offer a practical way for each partner to have a voice. It’s an intentional conversation that opens the door to vulnerability, trust, and mutual respect. 

Special Considerations for High-Earning Professional Women

If you’re still on the fence about a prenup, another thing to consider is your career and income trajectory. What happens to increased earnings from promotions or bonuses after marriage? Or, what if your future income includes non-equity compensation, like stock options or restricted shares? Vesting schedules can make dividing these assets complicated, especially from a tax perspective, which makes having a plan even more important.

Assets like a business or professional license create another layer. For business owners, prenups can offer protection, such as insulating your company from legal action if your spouse were to get sued. And while your medical license might not be something the courts can split in the event of a divorce, it does carry monetary value, especially if your partner supports you during medical school. 

Another consideration is family wealth or a future inheritance. You may want to share it, or not. Or, you may want to split the interest from inherited funds, but not the principal. Whatever you decide, talk about it now–not when you’ve just come into money and are potentially also grieving.

Having “The Conversation” – A Strategic Approach

Now, to address the elephant in the room: how do you actually start a conversation like this?

1. Timing Is Everything – Talk about a prenup before the seating charts and dress alterations take over your free time. Wedding planning can be stressful; avoid letting it spill into an important financial conversation.
2. Emphasize “Us,” Not “Me vs. You” – A prenup is all about mutual protection and ensuring each person has a voice, championing clear communication–a healthy habit in any relationship. 
3. Encourage Independent Legal Representation for Both of You – Don’t leave room for either side to feel outmatched or in the dark.

Try starting with “I want to make sure that when things get tough, we can fight for each other out of love, not the fear of a financial mess,” or “I want us to be clear about our financial future so we can focus on building our life together.”

Working with the Right Professionals

Hard conversations benefit from the right help, especially when they involve complex legal and financial matters. When searching for a family law attorney, ask questions like:

• How much experience do you have?
• How do you handle negotiations while ensuring everyone feels valued?
• What about fees and billing practices?
• What are the state requirements for prenups?
• What if we need to change anything in the future?

Once you’ve found the right help, bring in a trusted financial planner. They can help you anticipate financial and tax implications within the scope of your long-term plan.

Ready to take the next step? Contact Amanda D. Singer, Esq., MDR, CDFA® for a consultation, and connect with the WealthChoice team to build a prenup that complements your financial strategy.

Sources:

https://www.forbes.com/sites/kimelsesser/2025/05/05/women-who-outearn-husbands-face-higher-marital-strain-study-says

https://wcnllp.com/something-old-something-new-something-smart-a-prenup

https://www.legalzoom.com/articles/prenuptial-agreements-what-they-can-and-cannot-protect

https://themckinneylawgroup.com/prenuptial-agreements-and-professional-licenses-protecting-your-future-earnings/

https://state48law.com/benefits-of-a-prenuptial-agreement-for-business-owners/

https://www.millerlawattorneys.com/single-post/the-role-of-a-prenup-lawyer-when-to-hire-and-what-to-ask

The post Do I Need a Prenup if I’m the Breadwinner? appeared first on WealthChoice.

The key to successful multigenerational wealth planning is to start early, facilitate open conversations, and engage with a professional who can direct your loved ones even in your absence. For family matriarchs, being a good steward of multigenerational wealth becomes increasingly important as women face unique challenges like longer life expectancy and widowhood—both of which put them in the role of primary financial decision-maker for their families. 

Let’s take a look at what goes into preserving your family’s financial legacy for many generations to come.

3 Challenges Affecting Wealth Transfer

Why, exactly, is transferring wealth from one generation to the next such a challenge?

Not only is there a level of fiscal responsibility each member must uphold, but the family dynamics and interpersonal relationships can add a level of complexity as well. Here are three challenges many families face when establishing a wealth transfer plan.

Financial Literacy

Financial education is not often taught in schools, meaning it falls to the parents, grandparents, or to the young people themselves to increase their financial literacy. But without a basic understanding of financial concepts like budgeting, saving, investing, and thinking long-term, your next generation of wealth stewards will likely not be able to manage a large inheritance responsibly.

Lack of Communication

You know what they say about making assumptions. When it comes to building a plan for the future of your wealth, never assume your children or grandchildren know exactly what you want. One of the biggest pitfalls of multigenerational planning is neglecting to communicate openly between generations.

Money may still feel like a taboo topic in your family, but it must be discussed. You want your younger generations to be good stewards of their inheritance, and they want to understand your wishes, values, and strategies for building and preserving wealth.

Set aside time to encourage your family members to ask questions, include them in meetings with your professional advisors, and start to pull back the curtain on your portfolio (even if it feels uncomfortable). 

Complex Assets

Generally speaking, the larger an estate, the more complex it becomes. Your multigenerational wealth plan may involve all sorts of assets, from investment properties and trust funds to family businesses and large brokerage accounts. Your next generation of family leaders aren’t just receiving a lump sum of cash—they’re being entrusted with a variety of assets that involve different tax treatments and levels of oversight. 

4 Key Components of Effective Multigenerational Wealth Planning

Now, let’s take a closer look at what goes into building an effective multigenerational plan for your family. 

Tax Efficiency

The tax treatment of your assets, particularly during the wealth transfer process, can have a significant impact on the longevity of your family’s wealth.

You’ll need to work with a financial advisor and tax professional to incorporate tax-minimizing strategies. For example, you may find opportunities to reduce estate taxes (federal and state, if applicable), leverage lifetime gifting, and coordinate income tax strategies across generations.

A well-constructed wealth transfer plan will also likely include tax-advantaged investment vehicles, such as Roth accounts or trusts. By being proactive with your wealth’s current and future tax liability, you can help your loved ones preserve more family wealth and avoid the erosive effects of unchecked tax liability.

Legal Planning

Certain legal tools and documents can serve as the foundation for long-term multigenerational wealth transfer. This may include, for example, establishing certain trust structures to preserve wealth and provide control over how and when assets are distributed. 

Tools such as family limited partnerships and LLCs can also be used to manage business assets and real estate holdings. Your legal strategies and planning can also extend to include some estate planning essentials, such as healthcare directives and durable powers of attorney. Once established, these documents help ensure your loved ones can act on your behalf when needed. 

Charitable giving strategies, such as donor-advised funds or family foundations, can also be incorporated to reflect your values and provide benefits to both your family and the causes you care about.

Family Governance and Communication

Affluent families that are able to preserve wealth from one generation to the next often have one clear trait in common—clear family governance backed by strong inter-generational communication.

Beyond holding an occasional meeting, true family governance requires a steady structure that can be used for decision-making, resolving conflict, and ensuring a shared understanding of family goals. You may consider, for example, creating a family mission statement and forming a family council. These guardrails can help guide future decision-making while providing clarity and continuity over time. 

Legacy Preservation Beyond Money

Your family’s wealth legacy goes beyond bank accounts and balance sheets. It’s just as important to pass down the values and stories that give each family member a sense of shared purpose as well.

Consider what can help you build a more meaningful and lasting legacy beyond a financial inheritance. Perhaps you’d like to start documenting in books or videos some of your family’s history or volunteer alongside your children or grandchildren on a regular basis. 

If you own a family business, having a clear succession plan is also vital to ensuring continuity and protecting the business’s long-term value.

Special Considerations for Women

As the matriarch of your family, your multigenerational wealth plan should account for the unique responsibilities (and challenges) that come with a longer life expectancy. For example, consider what proactive strategies you can leverage now to cover your future financial needs (like long-term care) without diminishing your loved ones’ inheritance.  

Statistically speaking, you’re likely to become a solo decision-maker later in life, which means you’ll also need to start building your support network now. Find a financial advisor you trust to guide you and your family through this wealth-generation strategy, and get your children or grandchildren acclimated to your financial landscape early on. You don’t want to leave your loved ones with surprises or questions that can’t be addressed later on.

Empowering your daughters and granddaughters with financial knowledge and independence is one of the most impactful gifts you can offer. A thoughtful, forward-focused multigenerational plan can do just that.

How WealthChoice Supports Women in Multigenerational Planning

At WealthChoice, we take a proactive, family-centric approach to wealth management that recognizes the vital role women play in shaping their family’s financial future. We work closely with our clients to create customized strategies that reflect their values, goals, and family dynamics.

Through facilitated family meetings, financial education tools, and ongoing support, we help ensure that each generation is prepared and engaged. Our process goes beyond planning for what happens when you’re gone—we focus on empowering you and your family to make confident financial decisions today.

If you’re ready to start building your family’s financial future, we invite you to begin the conversation with our team today.

The post Multigenerational Wealth Planning: Preserving Your Family’s Financial Legacy appeared first on WealthChoice.

Assessing Your Financial Health Is Step One In Preparing for a Layoff

Before taking any specific steps, it’s essential to understand your current financial situation. Start by reviewing your savings and emergency funds to ensure you have a safety net. Ideally, an emergency fund should cover 3-6 months of living expenses. 

Next, calculate your monthly expenses, including rent/mortgage, utilities, groceries, transportation, insurance, and discretionary spending etc. Separate what is essential from what isn’t so you can have this number in mind. This will help you identify areas where you can cut back if necessary. 

Finally, assess your debts, including credit cards, student loans, and car loans, to prioritize payments and manage obligations more effectively. Effective debt management can reduce financial stress during a layoff. Prioritizing paying off high-interest debts, such as credit card balances, to reduce the overall financial burden is a great goal to focus on now, while income is consistent. 

Understanding your financial health is the foundation for building a robust strategy to weather a layoff or any kind of financial change. 

Building an Emergency Fund

We know you’ve heard it before, but this is your reminder that having a robust emergency fund is critical for financial resilience and preparing for a layoff. Aim to save at least 3-6 months’ worth of living expenses to cover essential costs such as housing, food, utilities, and insurance. If your emergency fund is lacking, consider ways you can reallocate spending – only for a time- to build this back up. 

The best way to make this happen is to automate savings, ideally to a high-yield savings account. You can set it and forget it, knowing you’re building an important cushion for any potential job cuts in the future. We know it’s not a glamorous topic, but building an emergency fund is a proactive choice that provides financial security during uncertain times.

Diversifying Income Sources

Diversifying your income streams can provide additional financial security. We know you’re a busy executive, so side hustles aren’t going to be the ideal choice here. Instead, consider investments that provide passive income, like dividend-paying stocks or building a portfolio with rental properties. Diversifying income not only increases financial stability but also builds a safety net to cushion the impact of a layoff.

Updating Your Resume and LinkedIn

A not-often-considered way to build up financial preparedness is updating your resume and your LinkedIn. 

Take a moment to update your resume with recent achievements.  Don’t forget to include KPIs that you directly contributed to within your current position as these can be powerful on your resume. 

Then, log-in to LinkedIn and ‘dust-off’ that profile. Staying relevant in your professional network – even while in high-powered positions – can be a great tool for finding a new job, should you need to. This is also a great time to reach out to colleagues from the past and request a recommendation for your LinkedIn profile. 

Mental and Emotional Preparedness

We know a layoff can be emotionally challenging, and maintaining a positive mindset is essential. Seek support from friends, family, or a professional counselor to discuss your feelings and concerns. Stay positive by focusing on your strengths and accomplishments, and remember that a layoff does not define your worth or capabilities. Continue to make time to take care of yourself and reduce stress – maybe even try a new hobby. Don’t forget you can always join our community as a way to have support right in your inbox. 

Proactive Financial Planning Is Key When Preparing for a Layoff 

Proactive financial planning is the key to staying resilient in the face of potential layoffs. By assessing your financial health, building an emergency fund, diversifying income sources, updating your resume and skills, and maintaining emotional well-being, you can navigate job loss with confidence and stability. We want you to start preparing now, because it’s a choice that will only benefit you- whether or not a layoff happens for you. By taking the steps above, you can begin to build financial resilience and ensure you are ready to face any economic challenges that come your way.

Curious about working with us? You can find out more about our unique process here. 

The post Preparing for a Layoff: Financial Strategies for Women to Stay Resilient appeared first on WealthChoice.

The gender pay gap sees women paid about 82 cents to every dollar earned by a man, according to analysis by the Pew Research Center in 2022. This pervasive divide is driven in part by gender and racial discrimination, workplace harassment, job segregation and a lack of workplace policies that support family caregiving, which is still most often performed by women.

Women who leave work to raise their children face decreased wages when they return. They also face very real biases about being less committed to their work, which can lead to a lack of growth opportunities. Age is another factor that is wrongly synonymous with “worth.” For women aged 45 and over, the pay gap extends to 73 cents for every dollar a man makes at the same age. When looking at race, the gap only grows.

As well as seeing my clients battle with this, I’ve experienced the gender pay gap firsthand.

After repeatedly confronting the unique financial challenges that women executives face, I knew I had to go my own way. WealthChoice was created as a place where I can do the work I love in a way I know will have the most impact, and that I am fairly compensated for.

It seems like the most basic request: to simply be paid the same as men who do the same work as us (or sometimes even less!). And yet a gender wage gap has been recognized in a shocking 94% of occupations, stretching all the way to the C-suite. The gender wage gap continues to permeate our professional lives, impacting the health, wealth and well-being of women across the whole of the US.

So What Can Be Done About the Gender Pay Gap?

My job is to advocate for the betterment of the lives of the women I work with. I take great joy in watching them find empowerment and satisfaction in their financial lives. So it really galls me when I hear of the unequal pay or stifled professional development they experience at work.

While I can’t change the numbers on their paycheck, a major way I can help my clients is by ensuring they use the money they do earn as wisely as possible. And the good news here is that there are certain wealth strategies we can put in place that will cushion their financial plan from the negative impact of the gender pay gap.

I recently took on a new client, a woman who is a top tier executive in a large tech firm. When discussing her income I sadly wasn’t surprised to learn of the pay disparity she experiences, despite her senior position.

We spent a lot of time chatting about how this affects her at work, and the mental and emotional toll it takes when feeling so overlooked and underappreciated by her male peers. Then – with an admitted glimmer of “We’ll show them!” – I set about telling her how I will help her work to negate this wage gap as much as possible through well considered and impactful financial choices.

Pay parity is a hugely important element we factor into our planning processes with our clients at WealthChoice.

After all, the earning power of women dictates our ability to live the life we want – and that is the hallmark of our approach to financial planning and the management of women’s wealth.

Working closely with our clients to understand their dreams, goals, ambitions and areas of personal fulfillment is integral to how we operate. Having a plan to maximize your income is critical for any executive – male or female – but it is a really important consideration for female executives, business owners and professionals who are battling an uneven playing field.

The Importance of Knowing a Woman’s Worth

When you’re not getting paid what you’re worth, you don’t get the opportunity to save as much as you should. That translates to lost incomes, lost social security benefits (which are scaled on your pay), and lost portfolio growth over time.

While we’re all familiar with the fact that women executives are paid less than men for doing the same jobs, a lesser known fact is that the average woman executive leaves a million dollars on the table over the course of her working life, simply by not knowing how much she is worth, or asking for what she deserves.

How is this possible, you ask? It starts with knowing your professional value. Where men generally have no problem asking (or overasking) for what they are worth, women seem instinctively averse to it. Moreover, women executives often don’t know the market value of their work. Women report salary expectations between 3 percent and 32 percent lower than those of men for the same job.

Failing to negotiate plays a significant role in wage disparity. A study from Carnegie Mellon University revealed that 8 times as many men as women graduating with a master’s degree negotiated the starting salary of their first job. The first job sets the tone for your earning potential over your entire career. By not negotiating, a woman stands to lose over $500,000 by age 60.

What Does the Gender Pay Gap Mean for Our Economy?

Gender equality around pay has long been an issue in the US labor market. June this year marked 60 years since the passing of the Equal Pay Act, which “prohibited discrimination on account of sex in the payment of wages”.

Yet the situation in the US is still only slightly better than the world average – where most women are paid around 20% less than men – but 18% less can still make a significant impact to a well-structured financial plan. This has a persistently negative impact on the American economy as a whole.

According to Moody’s Analytics, we can expect to see an additional $7 trillion injected into the global economy – that is about 7% – if the pay gap between men and women is narrowed more rapidly. The problem is, at the current rate, the gender pay gap will only be closed in about 132 years.

However, if women in the US were to receive equal pay, then it is anticipated that this would cut poverty among working women and add in the region of $482 billion to the American economy.

For example, in the state of California, where we have a number of clients, pay equality would equate to a significant economic boost. “If women were paid the same as comparable men in California, the state’s working women would have earned $51.8 billion more dollars, an earnings increase that, by itself, is greater than the entire economy of South Dakota ($45.9 billion)”, wrote the authors of briefing paper for The Institute for Women’s Policy Research, Heidi Hartmann, Jeff Hayes and Jennifer Clark.

How Does This Impact Women’s ‘Wealth Gap’?

As I wrote in my book, Corner Office Choices, no matter what industry you work in, being a woman in that industry will bring unique challenges that men don’t have to deal with. The response isn’t to resign ourselves, nor is it to get overly caught up in fighting for systemic change. Instead, the most constructive approach is to identify what those challenges are, and get the resources you need to overcome them.

Over the past two decades, very little has been done to fundamentally shift the status quo. This means more women play a juggling act with their time and their money, but with fewer opportunities to invest more into their own financial futures.

Just recently, the Center for American Progress think-tank released a paper determining that persistent gender pay gaps had cost American women $61 trillion in financial resources since 1967, when the Equal Pay Act was signed. While all women are impacted, Latina and Black women workers continue to be worse off.

The personal upshot of this is that women continue to be caught in a ‘wealth gap’, unable to catch up with their male counterparts. As Rose Khattar, Director of Economic Analysis at the Center for American Progress, said about the report’s findings: “That’s lost wages that could have been injected into the economy in the form of consumer spending. That’s wages that women could have used in terms of investments to build up their wealth.”

Just consider these three personal impacts that the wealth gap might be having on your own financial planning:

• Retiring in Style: The long-term implications of the gender pay gap are particularly noticeable when you start drilling down into the retirement income women can expect versus men. Since earnings over the course of a woman’s life are below that of a man, they receive less in pensions and Social Security which means that when it comes time to retire they can expect to have 70% of a man’s retirement income. Worryingly, many women go into retirement with less income than they had when they were working; making it impossible to maintain their standard of living.
• Emergency Fund Savings: As a female breadwinner, or as a working woman contributing to the family finances, some believe it is important for women to save even more into their emergency funds. This is, in part, due to the household demands on women and their more precarious standing in the labor market. And yet they have one hand tied behind their backs as they build up these savings.
• Investing in Stocks: Earlier this year a report by BNY Mellon noted that if women invested in the stock market at the same rate as men, there would be – at very least – an extra $3.22 trillion in assets under management. The gender pay gap was just one of the factors behind this imbalance highlighted in the report, the others being financial confidence, education around investing and less disposable income (which is where the pay gap really bites).

The Benefit of Women-Focused Advisory Firms

Many of the issues impacting how women accumulate wealth can be linked to personal preferences for investing – since traditionally women tend to be more conservative and have lower risk tolerances – but also because the financial world is geared towards men and, by and large, continues to be male dominated.

However, having a female financial advisor in your corner also makes a big difference. After all, women have unique financial needs and often find themselves handed cookie-cutter advice that might suit a man, rather than benefiting from crafted solutions that help them live their best life.

Women want more than just accepting what is pushed across the table at them, they value honesty and transparency, relationships built on trust and access to investing information that aligns with their personal values. Many women find they can get this by using a female advisor.

It’s important for women executives to recognize that no matter where they start, there’s only so much time they have left, and only so much money they can make within that time frame. It is vital to understand the long term implications of how they choose to use their resources.

My job is to help women executives understand that their current way of life is a choice, and to help them see what other choices are available to them. What do they need for their own life? What does quality of life mean to them? And what is involved in creating it?

At WealthChoice we tailor-make our clients a financial plan that not only takes the issue of gender pay disparities into account, but seeks ways to counter these issues and provide sustained financial stability and growth.

Please do get in touch if we can help you navigate any gender pay gap issues you’re experiencing. We stand as your advocate, support system, and ultimate cheerleader as you head to work every day and learn to bridge the gaping wage divide until the day eventually comes when we no longer have to. Until then, we’re here for you.

The post Women Executives and the Gender Pay Gap. What Can We Do? appeared first on WealthChoice.

It is telling that, although women enter the legal profession in roughly equal numbers to their male counterparts – and 55.3% of all law students in the US were women in 2021, they leave the law in such numbers that by 2022 only 38% of all lawyers across the US were women.

These statistics confirm what I’ve observed over the years working closely with exceptional women lawyers in various stages of their careers and at differing seniority levels. I wrote about one such woman, Sophie, in my book Corner Office Choices: The Executive Woman’s Guide to Financial Freedom.

An absolute go-getter, who in her mid-30s was already an equity partner in a well-known law firm and pulling up to $1 million a year, when I met her Sophie’s life was ruled by work and dominated by stress. As I described her situation at the time:

“She was working at an unsustainable pace, with no time left in her life for fun, adventure, or relaxation. Even while making money hand over fist, she felt the stress of being financially strapped. She had only $100,000 in her 401(k), not nearly enough to fund her lifestyle for a year. As we continued talking, her face, voice, and demeanor bore the evidence that she couldn’t keep up this pace much longer. I’ll never forget her words: ‘It feels like I’m on a treadmill that I can’t get off’.”

I’ve worked closely with Sophie over the years, and together we reshaped her finances, gave flight to her dreams and set her up with the option of an early retirement. Today, Sophie is living the dream: working flexible hours with clients she loves and who appreciate her expertise, from an idyllic European village with an ocean view.

When I engage with female lawyers, I often refer to Sophie’s story because she is proof that you can get off the hamster wheel and create the life you’ve always wanted. Even in a high-pressure career like the law, burnout does not need to be the end of the story.

The Challenges Impacting Women in the Law

I say this not to diminish the very real challenges facing women in the legal profession. As research from the American Bar shows, the challenges of being overlooked for promotions, earning less, battling bias and ingrained prejudice, and juggling unrealistic demands on their time, impact women in the law and, as a result, their career longevity.

For women who are already in high-stress careers like the law, pressure and burnout are very real concerns. When you add financial anxiety to the mix you have an even more potent cocktail.

During a chat with Peachie Thompson, on her Just Peachie Show podcast, we spoke about the discomfort many professional women experience over their financial situations. Just like my client Sophie, they might be making good money but they can be insecure about their spending, saving and investment habits. This ongoing anxiety is bruising for women who are already carrying too much on their shoulders; until you get to grips with the numbers and get a plan in place.

This is why I am a strong advocate for creating a financial plan that can help to direct decision making and support women across all aspects of their lives.

How Can You Turn Things Around?

Besieged with the unrelenting pressure of a demanding profession, alongside personal responsibilities, family, parents and the financial stress of often being the main breadwinner at home, I have found over the years that women lawyers in particular need to take the utmost care to create a financial plan early on in their careers.

This plan should inform decision making about career progression and make provision for the fact that, as personal demands grow, a complete change in career or direction might be on the cards. It also needs to include a relevant and personal financial plan that encompasses wealth and estate planning and investing.

Working with an expert firm such as WealthChoice is an astute move, but so too is becoming curious about investing and financial decision making, and taking ownership of your financial and lifestyle goals, passions and pursuits. As CLA Health and Wellness Committee Member Jala Eaton puts it in a 2022 article: “You have to be willing to learn what you are doing. No one cares about you and your success the way you care.”

Never Lose Sight of the Bigger Picture

I would broaden this assertion further still, and say you are doing yourself a disservice if you don’t find the right financial planning partner to help you explore all available ways and means to craft your best life.

Earlier this year, when I spoke to a group of women lawyers as part of a DRI event, the multifaceted nature of what brings fulfillment and meaning to life was brought home to me. The women lawyers I work with want to be challenged, they build strong relationships and they want to feel valued – this combination contributes to their feelings of success, over and above the financial benefits of the role. If one of these three areas are not being fulfilled, then I would argue it is time for a rethink.

During my talk – which I titled What it Takes to Get to the Top – I spoke about the passion that drove me to start WealthChoice in 2016 and my ambition to serve women professionals in a meaningful and holistic way.

At the time I felt out of balance with my life, I felt undervalued and underappreciated. So I pivoted. My advice to the women lawyers during that talk was: “If you enjoy practicing law, but not where you are, change that. Or if you don’t enjoy practicing, revisit that. Or if you enjoy practicing where you are, ask yourself if the challenges are insurmountable.”

In spite of the biases and the pressures, many women feed off a career in law. However, many more feel stuck in the profession and out of options. My message is: If you plan your choices and have the courage to change, you too can find your sweet spot.

Burnout and Bias: Two Antidotes

Two things that helped me on my journey, which I would suggest for any women struggling against bias and burnout, are:

• I found a community of like-minded women. In my case, Equita Financial Network, of which I am a co-founder, helped me build my firm by providing emotional and professional support and wonderful relationships. This community has absolutely supported the success of WealthChoice. If you can’t find a community of women lawyers you connect with, then reach out to colleagues and friends and create your own sisterhood.
• Know when and what to delegate. In my case, I was able to focus my time and attention on offering top-notch service to my clients by working with a great operations team, trading team and marketing team, rather than trying to do everything myself. This helped me grow my firm, stay true to my dreams and still spend time with my family.

Empowering yourself by partnering with a financial advisory firm like WealthChoice is often the first step in taking control of your time and creating a sustainable, long-term plan for your life and future financial security. I encourage you to get in touch today.

The post Burnout and Bias: Why Financial Planning Is Critical for Women Lawyers appeared first on WealthChoice.

Like so many working women before her, this woman was feeling overwhelmed by the demands of a professional career and a family. She was finding it challenging to manage intense full-time work while giving her spouse and young children the time they needed. She felt trapped, spread too thin and overawed by the demands of juggling almost every aspect of her life.

I was extremely grateful for the feedback I gained from this interaction, specifically because I know from past experience that the WealthChoice way can – and will – help her manage all these touchpoints.

For many executive women, life is a day-to-day tightrope walk while juggling career and family. Many of these women have little time to live life on their terms, let alone have some sort of financial strategy for the future they’d like to enjoy.

Fortunately, my brand of bespoke financial planning, which considers all aspects of a woman’s working and personal life, breaks away from the traditional one-size-fits-all model of financial planning to create holistic solutions that support busy breadwinner businesswomen and enable them to live their best lives.

Starting a Family Takes Precision Planning

The process starts with an open and honest conversation, an in-depth examination of your financial health, your goals and your specific personal and professional challenges. From there, we craft a life plan that works – for you!

In my experience, working women – and particularly breadwinner businesswomen – should begin to plan financially from the moment they start thinking about starting a family. This includes putting in place a plan for job flexibility and understanding the maternity leave options at their company.

In particular, it’s important to focus on the following:

• Know Your Maternity Leave Income Coverage: Questions you need to be asking yourself include: How long will I receive a salary from my company? Will it be 100% or a portion? Does my state provide disability for maternity leave? How will my income be impacted with a child? Will I be able to cover the increase in expenses if my income decreases?
• Reassess Your Budget: You’ll need to consider new budgetary line-items such as childcare, equipping your home for a baby, as well as clothes, accessories and food. Plus it’s critically important to decide when to start contributing to a college fund (I always recommend from the moment your child is born, so you get the full benefit of growth over time).
• Increase Your Insurance Cover: For every new parent it is an imperative to have life insurance. If you already have life insurance, then it’s important to review how much you have and assess if it is sufficient. Not only should you consider the medical costs associated with having a child, from prenatal appointments to childbirth classes, you should also consider the cost of insurance once you’ve added your child to your plan.
• Build Your Emergency Fund: Since your family is expanding it’s an excellent idea to put more into your emergency fund for those just-in-case moments. As a rule of thumb, it is good practice to have an emergency fund with at least six months of fixed expenses in cash if you are single, and three months if you have a working spouse or partner.
• Update Your Will: If you don’t already have a Will, then it’s important to have one in place before your baby is born. This document will ensure that your child inherits your assets in the event of your death and, if they are a minor, clearly states who will care for your child.
• Consider Upcoming Expenses: If your current home is small, then you’ll also need to factor in the possibility of moving house or investing in a bigger property as your child grows up. When you do start looking, remember that considerations like proximity to good schools and nurseries will now become really important.

On a more personal note, I resonated with this series of positive and affirming tips from life purpose coach Erica Carrico. Stop trying to be perfect, she says. Take time out to have fun, and to be open to help – be it a daycare or even a family organizer. Carrico also affirms my view that filling your own cup first is the best gift you can give to your family; it helps to keep you focused, positive and in the moment.

Advice for Entrepreneurs and Tech Startup Execs

A few years ago I read an article in Forbes magazine in which the writer suggested that as a female entrepreneur and mother, women should “accept that there is no such things a ‘balance’.”

For any breadwinner businesswomen at the helm of an organization – and especially those steering highly competitive tech start-ups – I would argue that balance comes naturally if you focus on prioritizing. This only works if you take the time to decide what is important – including you! – and tailoring your schedule around those commitments.

If, for instance, attending your child’s baseball games is a non-negotiable, then block out the time in your diary – just as you would with a client meeting. Turn off your phone, and give your full attention to the little person on the pitcher’s mound.

As Forbes contributor Nona Djavid wrote: “I do not check my email or Slack messages, and I focus on my current situation. I want him to remember that Mom showed up to every lesson to cheer him on and watch him improve.”

As a personal note, I still remember when my daughter told me that I never listened to her. It stung terribly, and I decided then and there to be more present. Now, I make sure my attention is 100% focused on my children when I’m with them or speaking with them from across the country.

Considerations for Women Lawyers

While all careers require heavy time commitments, a special word needs to go out to breadwinner businesswomen working in the notoriously demanding legal profession, where many regularly work more than 60 hours a week and a single week of vacation a year is not uncommon.

In a 2023 Law360 Pulse survey 31% of female lawyers said their work-life balance had deteriorated in the past year (compared with 18% of male lawyers) and 46% reported feeling continual stress (compared to 28% of men polled).

Fortunately mother-friendly legal firms are emerging across the US; practices that are turning their backs on traditionally glass ceilings and finding ways to support female lawyers through mentorship and career guidance. Some of the advice shared by female lawyers who find themselves juggling these very commitments, includes supporting one another, being adaptable, communicating your needs clearly, planning and prioritizing.

Even for women lawyers who choose to take on a part-time position to help prioritize family time, the unpredictability of the profession means that long hours are inevitable. Which means that, for any woman in the legal profession, full-time childcare is inevitable. One of the positive results of the 2020 pandemic was the ability for many in the legal field to have some flexibility around their work hours and location, so where possible it is advisable to build on those gains..

Remember: Outsourcing Is OK

In a previous blog I wrote – Female Breadwinners: The Challenges of Doing It All – I shared some eye-opening facts about women in the modern American workplace. For instance, that 41% of American mothers are the “sole or primary breadwinners for their families” who earn at least half of their household’s total income.

Not only are women often breadwinners at home, they are increasingly in senior positions in the office. This means that women need help. And they shouldn’t be afraid to ask for it.

I’ve had many conversations with breadwinner businesswomen who complain of a lack of time, but still insist on packing school lunches, cleaning and doing laundry. If you are dealing with intense hours and heavy work pressure then something has to give. If you push yourself to be all things to all people, that something to snap will be you.

By outsourcing to a housekeeper, or enrolling your child at daycare or with a trusted nanny, you are ensuring that you offer your family the best version of yourself when you walk through the door.

However, with the rising cost of childcare it is critically important to plan upfront for the costs associated with childcare, as well as the projected increases over the coming years. Fortune magazine puts the yearly cost of childcare in the US at $14,117, a figure that has accelerated by more than 41% in recent years. As a result, I work closely with my clients to ensure that budgets are in place to prioritize childcare, preschool and even summer day camps.

We also take the time to weigh up the IRS tax credit of up to $6,000 a year for two or more children versus making use of a Dependent Care Flexible Spending Account (FSA). Contributions to a Dependent Care FSA are capped at a pre-tax limit of $5,000 per calendar year (per couple), and these funds can be used to cover eligible dependent care services, like daycare. Since the FSA is only available to employees, it’s important to see which option best suits your situation.

What Does Your Ideal Life Look Like?

Before I took the plunge and started WealthChoice I had to ask myself the question: What does my ideal life look like? Today I challenge my breadwinner businesswomen clients to answer this for themselves, then to work with me to design a financial plan that supports her dreams and ambitions, and allows her to live life on her terms.

My approach is centered on choices – from the way you spend your money to the decisions you make around childcare, promotions and career decisions. Making the right choices for you is both freeing and empowering. If you’d like to work with me to help give power to your choices, get in touch and let’s chat.

The post For Breadwinner Businesswomen, Starting a Family Takes Precision Planning appeared first on WealthChoice.

Some of my clients – including many successful women in the tech sector – have recently been let go by their companies or are finding themselves with reduced incomes after taking up new job options. These changes fall firmly into the ‘thick and thin’ scenario, bringing significant stress and anxiety to women I have worked with so closely over the years.

Like any good partner, I find myself spending long hours talking through the implications of these changes with my clients, as well as rethinking existing budgets to consider rising expenses that can no longer be covered by company stock awards or a decrease in salary. We discuss ways in which to revisit cost-of-living expenses and when and how to use emergency funds.

These are not easy conversations. However, I increasingly find that those clients who embraced my goal-focused approach, and were open to proper planning and budgeting from inception, were better prepared to face worst-case scenarios and, consequently, to reduce stress.

I call this having a ‘Plan B’.

Do You Have a Financial ‘Plan B’?

The past year has shown me that putting a ‘Plan B’ in place – even when it’s viewed as a grudge line on the budget – is the best tough love conversation a financial advisor can ever have with her clients.

When I wrote Corner Office Choices: The Executive Woman’s Guide to Financial Freedom in 2018 the US economy was going through a rough time. Major US stock indices recorded their worst annual performance since the global financial crisis and recession fears were swirling. Again, the tech industry was taking a battering. Many of these issues are still in play, alongside the uncertainty caused by a global health pandemic, rising inflation and, yet again, more recession concerns.

Fortunately, as I tell my clients, it doesn’t matter what life throws at you if you have planned for the good times and the bad; and if you are willing to roll with the punches when you need to.

As I explained in Corner Office Choices: “The process of planning is not a steady, straight path. You have to be nimble because things change. Sometimes life takes unexpected turns that require you to make different financial choices from the ones you planned on. It’s important to not get discouraged by the need to prioritize. Some things will happen now, while other things will have to wait. It doesn’t mean they’re never going to happen. The point is to make incremental progress wherever you can and be consistent.”

Be Realistic About Your Situation

Right now a clear majority of Americans – 63% – do not expect their financial position to improve in 2023, with many putting the blame squarely on high inflation. Other telling statistics from this November 2022 Bankrate survey tell us that 19% of Americans regard ‘paying down debt’ as their top financial goal for the year head, alongside 16% who are prioritizing budgeting, 13% who are saving for into those emergency funds, and 9% who are focusing on retirement savings.

Each of these goals points clearly to the fact that 2023 is expected to be financially challenging for American households. What is encouraging is that Americans from all walks of life are aware of, and talking about, different forms of financial contingency planning – which is what our ‘Plan B’ thinking is all about.

What is Financial Contingency Planning?

We often talk about contingency planning in terms of companies, which use data and insights to determine key risks and then seek to mitigate against these worst-case scenarios. It is, of course, absolutely possible – and, indeed, preferable – to apply this sort of thing to our personal wealth planning.

Planning around potential future risks and negative events is something good financial advisors do as a matter of course.

Taking out income protection insurance or individual disability insurance to protect your earnings in the event of ill health is just one example of contingency planning, as is asset diversification. Having an emergency fund to cover monthly expenses in the event of a crisis is another important consideration, which should ideally cover you for between three and 12 months.

Building these layers into your original ‘Plan A’ does not mean that you don’t wholeheartedly believe in the goals you initially outlined, or your ability to reach your dreams. But it does mean that if your core plan is derailed by global or natural disasters and unforeseen events that you can confidently turn to Plan B, C or D to protect you, your family and your lifestyle with as little disruption and anxiety as possible.

An Emergency ‘To-Do’ List

If you do find yourself in a situation where you are concerned about your job or unexpectedly have to put your skills back on the market, then your first step is to speak to your financial advisor about how best to weather the financial storm with as little disruption to your overall plan as possible.

Breathe in. Exhale. And then follow these ‘Plan B’ preparation steps:

• Track where your money is currently going. Be specific. Give figures.
• Reprioritize your goals in line with your current circumstances.
• Consider any investment you should be making in your professional skills to support your career ambitions or even a possible change in direction.
• Create a new budget that breaks your expenses into fixed and discretionary (and, yes, still allocate funds to support your goals).
• Revisit your current savings habits.
• Protect your credit score by managing high-interest debt. Take advantage of minimum payments, negotiate with creditors or even consider debt consolidation. If you can, pay down debt.
• As your situation improves, keep checking in with your budget and tweaking it to work for you.
• And never forget to top up that emergency fund.

Your Financial Partner

Above all, remember that you are not alone. I’m not a great believer in sitting behind a desk talking at my clients, but I can offer a comfortable couch. Join me for a coffee or a glass of wine, and let’s take some of the stress out of 2023 by finetuning your ‘Plan B’ today.

The post Why You Should Be Financially Prepared for ‘Plan B’ appeared first on WealthChoice.

A recent conversation with a client brought up a wonderful analogy for this unique time as we discussed how best to prepare for what is likely to be a financially uncertain 2023: the unknown unknown. ‘Unknown unknowns’ are those unidentified and challenging risks which are hard to manage and even harder to predict; but they have a profound ability to derail carefully made plans.

There will always be things in life that we can’t quite grasp and events that throw us off guard. There is always the possibility that new ‘unknowables’ are just around the corner. Known as the Johari Window, this concept was created by psychologists Joseph Luft and Harrington Ingham in 1955. Designed to help people better understand their relationship with themselves and others, it’s a useful tool for understanding the importance of risk planning in personal finance.

The Financial Known and the Unknown

Life is filled with knowns and unknowns, and starting off a new year in acceptance of this fact means we can approach it with grace, but also – and more importantly – we can prepare for uncertainty and enable ourselves to remain steadfast no matter what the new year brings our way. In no area does this become more important than that of our financial lives.

Right now we are living through a time of ‘unknown unknowns’. On the outer edges of a global pandemic, our economy may be in turmoil, but this doesn’t mean your financial life needs to be. If we are prepared to lay down the right foundations, we can navigate a clear path through this ambiguity and anxiety with careful, mindful and meticulous planning.

Always Plan for the Unknown

‘Unknown knowns’ – like a bank or currency collapse – are rare, although we know in theory that they are possible, which is why strategies like diversification are so important. It is also absolutely possible to mitigate against ‘known unknown’ risks by making provisions for things like sickness, technology disruptions, or market shifts.

And, of course, ‘known knowns’ ask us to pay attention to saving, having insurance and a balanced portfolio. Even those true surprises – the ‘unknown unknowns’ – won’t hit you as hard if you have a plan in place.

During times of uncertainty, a plan is your best friend. It provides peace of mind and the comfort of knowing that you’ve built in some level of protection. With that surety beneath you, you can step out into each new day with the confidence to live life to its fullest, and on your own terms.

Women, Planning and Flexibility

The mistake we as women executives, business owners and professionals can often make, is that we view our financial plans as “an all-or-nothing proposition”. This is a common issue I address in my book, Corner Office Choices.

If we stray from our financial plan, we believe all progress has been wiped out. We treat it like a weight loss program or fitness regime. We’re hard on ourselves and become disillusioned if the clear road ahead starts twisting and turning before our eyes.

This adds huge mental stress at a time when the best advice is to hold true to intentions of the plan, to let the built-in protection mechanisms do their work, and recognize that the path to financial success is long and winding.

Throughout my career I’ve come to appreciate that real wealth comes down to living life on your terms. But it also means being flexible enough to know what you can’t control, such as:

• The Economy: Our economy is riding a tumultuous wave right now. In fact, the entire global economy is weathering a storm of historic magnitude.
  Effects of Covid-19: Bloomberg calls the pandemic “a catalyst for lasting economic change” in the US, from remote work to automation and a growing wealth divide.
• High Inflation: More rate hikes on the cards by the Federal Reserve.
• Unemployment and Job Losses: Right now, we are working with clients who have lost jobs, who are unemployed and who are deeply concerned about their future and that of their families.
• An Erratic Stock Market: Many of our clients are worried by the erratic performance of the stock market and the impact this is having on passive income.

These are real and understandable concerns, which impact people and livelihoods, but fortunately it is exactly in these conditions where financial planners can make a difference. By providing guidance in uncertain times, and by making sure that all our clients have the protection of a well-crafted plan, we can help you ride out this storm and thrive – even in uncertain times.

Your Best Support Against the Unknown

Our goal at WealthChoice is to help our clients live full lives. We do this by offering a holistic approach to financial, career and personal planning. We understand that the women we work with are fascinating and multifaceted individuals – and that each one is truly unique.

So, we focus on achieving an alignment between professional and personal goals. To do this requires time. Time to talk things through, to explore all the options on the table, to build a relevant financial plan, and design a tailored approach.

If you’ve just lost your job in tech, if your company is downsizing or your business is struggling. If – like so many Americans – you’re worried about your retirement, tax implications, rising debt, the cost of healthcare and college expenses, then help is at hand. We can work with you by putting your existing financial plan on the table, delving into the solutions, and unpacking the steps to get you back on track.

Over the years I’ve seen how women with clear financial plans have better money habits, peace of mind, in-built back-ups and emergency funds than those who don’t. So, I know this approach works.

Working together we can tackle the unknowns of the new year and beyond by putting the right plan in place and helping you make the best financial choices. Start the new year on the right foot, and give us a call today.

The post How to Live with Confidence, Despite Life’s Uncertainties appeared first on WealthChoice.

The line between separate and marital property

Some examples of separate property are property you owned prior to your marriage, an inheritance solely in your name, or a gift in your name only from a third party. However, the separate status may become void if, for example, you deposit the inheritance into a joint account or you re-title your own property to include your spouse’s name.

Marital property covers all assets and income streams acquired by either spouse during the marriage. This runs the gamut from retirement funds to art and club memberships to real estate and closely-held businesses.

The definition of these types of property can also vary by state. In the nine Community Property States, both spouses are considered equal owners of all marital property. In the remaining Equitable-Distibution States, the length of marriage, each spouse’s earning power, and involvement in building the business are taken into consideration when coming to a settlement. It doesn’t need to be equal, but it does need to be equitable.

How to protect what you’ve built before marrying

With all that in mind, protecting yourself from day one should be a high priority. If you are not yet married, strongly consider a prenup, with separate representation for you and your to-be spouse. This is one of the most secure – and cheapest – ways to protect your business in the event of a divorce.

If you got married without a prenup in place, you can consider getting a postnup, but keep in mind that the courts may look upon these skeptically. A number of states don’t recognize the validity of a postnup. Even so, if it may be worth considering if you do not have a prenup in place.

How to protect yourself as your business grows

As your business grows, so will your need to protect it. Drawing up legal documents that address what might happen in a divorce with a business attorney can help protect your assets.

Set up a clear ownership structure. If your spouse plays a role in your business, a formalized company structure, including who has what role and percentage of ownership, can help mitigate the risk of loss. Under this ownership structure, separate accounts with the sole purpose of funding new projects under both partners’ names will take away any ambiguity as to where funding originated. That way, neither spouse can claim an asset as their own without talking to each other first.

Separate personal and business finances. Having a wall between your personal and business funds will help minimize financial impact in the event of a divorce. This may mean your spending habits need to change after marriage. If you used personal credit cards or loaned money out-of-pocket before, establish separate accounts and open credit cards solely for paying company bills after you tie the knot. Pristine record-keeping for every cent that goes in and out of your accounts can help establish separation during a divorce.

Put shareholders’ or operating agreements in place. As a business owner, you and other equityholders can negotiate to establish rights, restrictions, and/or obligations for those who have equity and are going through a divorce. These agreements can extend as far as to block the transfer of equity to the equityholder’s ex and allow the others in this group or the company to repurchase the divorcing equityholder’s units. It can also prohibit unauthorized equityholders from taking on managerial powers. Through this agreement, this group can agree on the manner of valuation of equity if a divorce occurs.

Consider spousal consents. These are common requirements for shareholders and used in tandem with shareholders’ or operating agreements. The spouse of an equityholder signs these consents, which ensure that he is aware of equity restrictions and transfers as well as confirming he will not claim an interest in the company on death of or divorce from their spouse. To ensure these agreements are enforceable, consider having them added into the pre- or postnup.

Bottom Line

Marriage can be time of bliss, but it’s important to remember that your peace of mind is critical. Protecting yourself and what you’ve built will help provide you with much-needed peace of mind as you embark on a new phase of life.

Looking to secure your financial freedom? We’re here for you at WealthChoice. Get in touch.

The post How to Protect Your Business in a Divorce appeared first on WealthChoice.