Estate Planning

For many, the phrase “Estate Planning” sounds as though it is something only the ultra-wealthy need to do. In truth, every family, no matter their net-worth, could benefit from an estate plan.

Estate Planning

Studies show the majority of Americans believe that all adults should have a will or estate planning documents in place, yet most report that they currently do not have such documents.

End-of-life planning can seem morose, depressing and even a little scary. Despite these natural feelings about facing your own mortality, estate planning is a critical aspect of managing your assets and protecting your family, which is way it’s surprising that the majority of people are unprepared for the inevitable.

Individuals put off estate planning because they think they don’t own enough, they’re not old enough, they’re too busy, think they have plenty of time, they’re confused and don’t know who can help them, or they just don’t want to think about it. Then, when something happens to them, their families have to pick up the pieces.

Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own; your car, home, other real estate, checking and savings accounts, investments, life insurance and personal possessions. No matter how large or how modest, everyone has an estate and something in common – you can’t take it with you when you die.

When you do die, you probably want to control how those things are given to the people or organizations you care most about. To ensure your wishes are carried out, you need to provide instructions stating whom you want to leave your property to, what you want them to receive, and when they are to receive it. You will of course, want this to happen with the least amount paid in taxes, legal fees, and court costs.

If you pass away without an intentional estate plan, your assets will be distributed according to the probate laws in your state. In many states, if you are married and have children, your spouse and children will each receive a share. That means your spouse could receive only a fraction of your estate, which may not be enough to live on. If you have minor children, the court will appoint a guardian without knowing who you would have chosen.

For unmarried opposite and same-sex couples, it is particularly important to have a complete and up-to-date estate plan as laws that favor married couples don’t apply. Without proper protection, your surviving partner could be ordered out of the house you share, your next of kin could dispose of your estate in a way of which you would not approve, or taxes could take a large amount out of the bequest you leave to your partner. Your partner could be left out of financial and medical decision making if you become seriously ill or incapacitated.

None of us really like to think about our own mortality or the possibility of being unable to make decisions for ourselves. This is exactly why so many families are caught off-guard and unprepared when incapacity or death does strike. Knowing you have a properly prepared plan in place – one that contains your instructions and will protect your family – will give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and for those you love.

What it Entails

While the idea of Estate Planning can sound daunting, when broken down into smaller components it is a much more manageable undertaking and one that can save you and/or your family from undue stress and confusion in the future. Let’s take a look at the key areas of estate planning.

Legal affairs

First things first, create and sign a will. Writing a will can save your surviving family members undue stress when it comes to administering and distributing your estate. You will also want to designate someone as your Power of Attorney to handle your legal and financial affairs.

Financial affairs

Gather and organize contact information on your advisors, such as your CPA or Financial Advisor. Make a list of all accounts and where those accounts are held.

Asset protection for you and your heirs

File beneficiary designations and confirm title to your accounts. In the event of disability or illness, a personalized revocable living trust can help manage your assets.

Providing for surviving spouse and loved ones

Life insurance! Make sure you have enough coverage for your surviving spouse and/or loved ones.

Providing for those with special needs

The statistics on special needs individuals is staggering. If your family is one of the 16.8 million caregivers to a child with special needs under the age of 18 or is part of the 20% of 16-64 year-olds that suffer from some form of physical, mental or emotional impairment then extra care is required to provide for these individuals.

Long term health care & health care costs

Designate someone you trust to make health care decisions for you with a health care proxy and communicate your health care wishes with a living will. Long term care insurance can also be purchased either as a standalone policy or as an addendum to your life insurance to help cover health care costs down the road.

Estate taxes

Your financial advisor can help you determine if this will be an issue for you and your family. One way to cover the cost of estate taxes is by purchasing a life insurance policy inside of an irrevocable trust. This ensures that your family will have the funds necessary at your death to cover any tax liabilities.

Business succession

If you are a business owner you will need to plan for your company’s future either in the event of your retirement, disability, or death. Regardless of whether you plan to leave the business to a family member, employee, partner, or sell it, you will need to consult with an advisor to ensure that the proper plan is in place to protect all you have built.

“Without a proper will in place, state law will oversee the distribution of your estate, which can create unexpected and unintended results.”



A will is the primary instrument for planning how your estate will be distributed, how your assets will be managed after death, appointing executors and guardians, and establishing trusts. Without a proper will in place, state law will oversee the distribution of your estate, which can create unexpected and unintended results. It is important to review your will periodically to account for changes in your personal circumstances and any changes in tax laws.

Living and Revocable Trust

A living or revocable trust may be established to accommodate for the management of your assets if you become incapacitated or critically ill. They are also useful tools to help avoid the time and cost of probate upon death. A revocable trust only provides for the management and distribution of assets held in the trust at the time of the grantor’s death, however, a separate will is still generally needed to provide instructions for distribution of assets not actually held in the trust at the time of death.

Power of Attorney

A power of attorney may be used to appoint a person to act as your agent to carry on your financial affairs. A power of attorney may eliminate the need for the court to appoint a conservator or guardian to act on your behalf if you are not able to manage your own affairs.

Living Will and Healthcare Proxy

A living will (also known as an advance medical directive) is a statement of your wishes for the kind of life-sustaining medical intervention you want, or don’t want, in the event that you become terminally ill and unable to communicate. A living will can be open to interpretation and different institutions and doctors may come to different conclusions. You can increase your chances of enforcing your directive when you have a health care agent advocating on your behalf. Your health care agent should be able to understand important medical information regarding your treatment, handle the stress of making difficult decisions, and keep your best interests and wishes in mind when making those decisions.


  • Does my will need to be updated?
  • Should I consider a living trust?
  • If you have a business, do you have a strategy in place for the smooth transition and continuous operation of your business?
  • Has my estate plan been updated to reflect recent tax law changes?
  • Who will take care of my children?
  • Should I have a medical power of attorney or living will?
  • What will my spouse and children inherit if I die today?
  • Does my estate plan provide for an income stream for my spouse and/or children?
The more your family and heirs know about your estate plan in advance, the better. They can be confident that you have thought through key issues, and you have a chance to smooth rough edges and prevent potential hurt feelings. You can also make sure that individuals with important responsibilities understand your intent and their roles.


2018 will usher in sweeping changes made to the tax code. Under the Tax Cuts and Jobs Act, the Estate Tax lifetime exemption will effectively double to $10,000,000 (inflation adjusted to $11,580,000 for 2020) with the 40% estate tax rate remaining unchanged. The Estate Tax and Gifting Exemption will remain unified, allowing high net-worth individuals to gift a maximum lifetime amount of $11,580,000 ($23,160,000 for married couples, with exemption probability still permanent). Although the federal estate tax appears now to apply to a very small percentage of taxpayers, legacy planning remains critical for most families as there is nothing permanent about the tax changes. Absent new legislation, the lifetime exemption amounts will revert to the previous $5,000,000 level (indexed for inflation) in 2026.
  • Annual Exclusion for Gifting -> $15,000
  • Generation-Skipping Tax (GST) Exemption -> $11,580,000
  • Applicable Estate Tax Exemption Amount -> $11,580,000
  • Applicable Gift Tax Exemption Amount -> $11,580,000
  • Maximum Gift, Estate, and GST Rate -> 40%

Generation-Skipping Tax (GST) Exemption

A separate tax is imposed on assets transferred to “skip” persons (persons who are at least two generations below the person transferring wealth). The rate for the GST tax in 2020 is 40%, imposed on the value of the transferred asset. There is however, a GST tax exemption that allows for the transfer of assets to skip persons without incurring and GST tax. Under the unified estate and gift tax system, this amount is equal to the lifetime estate exemption of $11,580,000. 

Applicable Estate Tax Exemption Amount

This exclusion entitles you to transfer assets at death, free of estate tax. This exclusion is closely tied to the federal gift tax exclusion, which is designed to prevent you from avoiding estate taxes by giving away assets during your lifetime. Any portion of the federal gift tax exclusion you use during your lifetime will reduce the federal estate tax exclusion available at your death.

In addition to the federal estate taxes levied by the federal government, the “state estate taxes” are another issue to be aware of for any client or estate planner. With the enactment of the Tax Cuts and Jobs Act many states will still have a need for additional revenue to offset the new federal estate tax credit. To do this, and as of 2020, Connecticut, Washington D.C., Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington all impose a separate estate tax. Other states have imposed an inheritance tax in conjunction or separately for additional revenue. These states include Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania.





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