Women control one-third of total household financial assets in the United States, yet the majority of women do not have an estate plan in place. Even those who do have an estate plan may not understand how it works or where their assets go upon their deaths. As more women become business owners and high-earning professionals, it is more important than ever for women to take control of their estate plan in order to achieve their financial goals and pass on wealth to the next generation. Here are five reasons why is it imperative for every woman to have an estate plan:

• To Reduce Estate Taxes

In 2021, the federal estate tax exemption is $11.7 million per individual. If an estate is worth more than $11.7 million at the time of death, the value of assets over the exemption amount will be taxed at a rate of 40%. It is important to keep in mind that the value of an estate includes all assets at the time of death including life insurance, retirement accounts and real property. Many states also have state death taxes that may be assessed at the time of death.

The concept of portability allows the executor of an estate to transfer the unused federal estate tax exemption amount to the surviving spouse to utilize at the time of his or her death. Therefore, a married couple can effectively pass a total of $23.4 million of wealth at time of death in 2021 without implicating federal estate tax. In order to make a portability election, the executor must file IRS Form 706, the "United States Estate (and Generation-Skipping Transfer) Tax Return."