A woman, 74, vs. wills and trusts that treat women like children; DOLLARS & SENSE


MIGHT a tax lawyer, planner or insurance salesperson have a financial interest in keeping women down? Kappie Spencer, 74, of Des Moines, Iowa, thinks the answer is yes.

She's on a crusade against wills and trusts that treat women as if they were children, incapable of managing inherited money.

Professional women are less likely to face this form of discrimination. But women at home are vulnerable to having their future independence taken away.

When your inheritance is left in trust, discretion lies with a trustee (typically, a relative or bank trust department). The trustee oversees the investments and usually pays you the interest and dividends every year. If you also want some of the principal, the trustee can usually provide it (depending on what the trust document says). But it's the trustee's call. You can be turned down. When all your money is in trust, you're effectively on the dole.

On your death, whatever money remains in the trust goes to whomever the document names -- typically, your children.

Trusts often make good sense -- for monied women as well as men. For example, they protect money left to minors and the mentally incompetent. They're useful for avoiding probate. They lower estate taxes. But it's another story, when a husband sets up a trust solely because he doubts that his wife has the brains to handle her own money. The wife might accept the arrangement, because she doubts herself, too.

A certain class of lawyers, planners and salespeople encourage the stereotype of the helpless wife, Spencer says. Selling and managing trusts for women is a lucrative business.

Spencer has suffered financial discrimination first-hand. When her mother died in 1965, she left her estate to her five children in equal shares. But the sons got their inheritance outright while the daughters' money was put into trust.

She says her bank trustees refused her money for her children's education, on one occasion, because she asked at a time when the stock market had declined.

Spencer once compiled some examples of sexist thinking in estate-planning publications and sales literature for trusts. They center around three themes: (1) Women should be "relieved of the burden" of managing money, because they can't learn. (2) If they have money on their hands, they'll be vulnerable to shysters. (3) They might remarry, and hand a man's hard-earned money over to someone else.

The specter of the "other man" has probably sold tens of thousands of trusts that lock a widow's money away.

The husband thinks that his widow will marry someone dishonorable.

For every planner who encourages a man to think this way, however, there are plenty more who try to keep things fair. They might ask the husband, "Do you really want your wife to have to go to a trustee, cup in hand, to pay her bills?"

Trusts work, when they're set up for mutual goals and offer maximum freedom to the recipient. In this spirit, they can even be used in anticipation of a second marriage.

Say, for example, that you leave your money in trust for your children, with the trust's current income payable to your spouse. With a liberal trust and a sympathetic trustee, the spouse can use the trust principal virtually at will.

If your spouse remarries and then dies, his or her second spouse is entitled to a share of the estate (unless a prenuptial agreement says otherwise). But the trust would go to the children intact. That's probably something your spouse wants, too.

Spencer doesn't crusade against good planning. She's after advisers who thoughtlessly (or deliberately) promote harmful stereotypes.

To help the crusade, Rep. Louise Slaughter, a New York Democrat, introduced a "sense of the Congress" resolution, which passed the House of Representatives on July 1. It called on financial institutions to "eliminate examples in their training materials which portray women as incapable and foolish."

The resolution has no teeth. But it should inspire women's groups to scour the estate-planning literature for sexist attitudes, and file objections.

Some widows, indeed, know little about investing. But conservative money management isn't hard. Widows can learn fast. In most cases, they love their newfound financial maturity.

If they find that they'd rather not run their own money, they can arrange for a trust themselves.

Jane Bryant Quinn is one of the nation's best known personal finance columnists.

Washington Post Writers Group

Pub Date: 10/10/99

Copyright © 2021, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad