Estate Planning Awareness Month: Why Your Financial Plan Should Include an Estate Strategy
Estate planning is about more than deciding who receives your assets after you’re gone. It’s about creating a plan for your finances, your family, your wishes, and the decisions that may need to be made if you become unable to make them yourself.
For many people, estate planning is easy to put off. It can feel complicated, uncomfortable, or like something that only needs to be addressed later in life. But an estate plan can be an important part of a broader financial strategy at many stages of life.
Estate Planning Awareness Month provides an opportunity to revisit the documents, beneficiaries, accounts, and wishes that make up your estate plan—and to consider whether they still reflect your current circumstances.
What Is Estate Planning?
Estate planning is the process of determining how your assets, financial responsibilities, and personal wishes should be handled during your lifetime and after your death.
An estate plan may address questions such as:
- Who should inherit your assets?
- Who should make financial decisions if you become incapacitated?
- Who should make health care decisions on your behalf?
- How should your assets be transferred to beneficiaries?
- What happens to your business or other significant assets?
- How can you provide for children or other family members?
- Are your beneficiary designations up to date?
- Could taxes or other costs affect the assets ultimately passed to your heirs?
The specific documents and strategies appropriate for an individual or family depend on their circumstances and applicable state and federal law. That’s why estate planning is generally a collaborative process involving professionals such as an estate-planning attorney, tax professional, and financial advisor.
Your financial advisor does not replace an attorney when it comes to drafting or interpreting legal documents. Instead, financial planning can help provide the financial context necessary for your estate plan to work alongside the rest of your strategy.
Estate Planning Isn’t Just for the Wealthy
One common misconception is that estate planning only matters for high-net-worth households.
In reality, an estate plan can be relevant to anyone who has assets, financial accounts, property, family members, or wishes that need to be addressed.
Even a relatively straightforward financial situation may involve a checking or savings account, retirement accounts, life insurance, a home, investment accounts, or personal property. Without appropriate planning, transferring those assets may be more complicated than expected.
Estate planning can also address situations that have nothing to do with the size of your estate.
For example, what happens if you are temporarily or permanently unable to manage your finances? Who can make certain financial decisions for you? Who can make health care decisions if you cannot communicate your wishes?
These questions are part of the broader conversation around incapacity planning—and they are worth considering regardless of your net worth.
The Core Pieces of an Estate Plan
There is no one-size-fits-all estate plan. The appropriate documents and strategies depend on factors such as your family situation, assets, state of residence, tax circumstances, and goals.
However, several components commonly play a role in estate planning.
A Will
A will generally provides instructions for how certain assets should be distributed after death and can address other matters provided for under applicable state law.
For parents of minor children, a will may also be an important place to nominate individuals to serve in certain roles involving their children, subject to state law and court procedures.
Importantly, not every asset is necessarily controlled by a will. Assets with beneficiary designations or certain forms of joint ownership may transfer according to those arrangements instead.
Trusts
A trust is a legal arrangement that can hold and manage assets according to its terms.
There are many types of trusts, and they can help serve different purposes. Depending on the circumstances, a trust may be used to help manage assets during a person’s lifetime, provide for beneficiaries, address certain estate-planning goals, or establish rules for how and when assets are distributed.
Trusts are legal documents with potentially significant tax and legal implications. Whether a trust is appropriate is a question that should be evaluated with a qualified estate-planning attorney.
Powers of Attorney
A financial power of attorney can allow another person to act on your behalf regarding financial or legal matters, depending on the document and applicable law.
This can be an important part of incapacity planning because an estate plan isn’t only about what happens after death. It can also address what happens if you are alive but unable to manage your own affairs.
Health Care Documents
Health care directives and related documents can address your wishes regarding medical care and identify individuals who may be authorized to make health care decisions on your behalf, depending on applicable state law.
These documents can help communicate your preferences and provide direction to your loved ones during difficult circumstances.
Don’t Forget Your Beneficiary Designations
One of the most overlooked parts of estate planning may be outside your will altogether: beneficiary designations.
Retirement accounts, life insurance policies, and certain financial accounts may pass directly to named beneficiaries. The beneficiary designation associated with an account can therefore have significant consequences for how that asset is transferred.
Consider reviewing beneficiary designations after major life events such as:
- Marriage or divorce
- Birth or adoption of a child
- Death of a beneficiary
- Changes in family relationships
- Significant changes in your financial circumstances
- Changes to your estate-planning documents
It is also important to understand that beneficiary designations and estate-planning documents need to work together. Updating one without considering the others can potentially create unintended results.
A financial professional can help you identify accounts and assets that should be reviewed, while an estate-planning attorney can help determine how those assets should fit within your legal plan.
Estate Planning and Taxes
Taxes are another reason estate planning deserves periodic attention.
Federal estate and gift tax rules can change, and state-level rules may also apply depending on where you live and the nature of your estate.
However, estate planning should not be reduced to an estate-tax conversation.
For many families, the more immediate concerns may involve how assets are titled, who receives them, how quickly assets can be accessed, how a surviving spouse or other family members will be supported, and how a plan can help minimize potential confusion or conflict.
Tax considerations can be complex, particularly when significant assets, business interests, charitable giving, trusts, or multiple generations are involved. A tax professional and estate-planning attorney can help evaluate the tax implications of specific strategies.
Your Estate Plan Should Evolve With Your Life
Creating an estate plan once does not necessarily mean the work is finished.
Your financial and personal circumstances can change substantially over time. A plan that made sense several years ago may no longer reflect your family, assets, or priorities.
Consider reviewing your estate plan after major life changes such as:
- Marriage or divorce: Changes in marital status can affect beneficiaries, ownership, and estate-planning documents.
- A new child or grandchild: Your plan may need to account for additional family members.
- A significant change in wealth: Selling a business, receiving an inheritance, purchasing property, or experiencing substantial investment growth can change your estate-planning considerations.
- A move to another state: Estate-planning laws can vary by state, so relocating may warrant a review with an attorney familiar with the laws of your new state.
- The death or incapacity of someone named in your plan: If an executor, trustee, beneficiary, or agent is no longer able or willing to serve, your documents may need to be updated.
- Changes in your wishes: Your estate plan should reflect your current intentions—not simply decisions you made years ago.
Estate Planning Is Part of a Bigger Financial Picture
An estate plan doesn’t exist in isolation.
It should ideally work alongside your broader financial strategy, including retirement planning, investment management, insurance, charitable giving, tax planning, and wealth-transfer considerations.
For example, the way your assets are structured can affect both your retirement strategy today and the assets ultimately available to your heirs.
Your financial advisor can help you take inventory of your financial accounts and identify areas that may warrant further review. They can also help coordinate financial information with your other professional advisors.
This coordination can be especially valuable when your financial life becomes more complex.
The goal isn’t necessarily to make your estate plan more complicated. In many cases, the goal is to make sure the pieces of your financial life are working together and that the professionals involved understand the broader picture.
Five Estate Planning Questions to Ask Yourself
If you haven’t reviewed your estate plan recently, start with a few basic questions:
1. Who would make financial decisions for me if I couldn’t?
If you became incapacitated, do you know who would have authority to handle financial matters on your behalf?
2. Are my beneficiaries current?
Review the beneficiaries on retirement accounts, life insurance policies, and other accounts where applicable. Make sure they reflect your current wishes and circumstances.
3. Does my estate plan reflect my current family?
Marriage, divorce, children, grandchildren, and other family changes can all warrant a review.
4. Do my financial accounts align with my estate plan?
Your will or trust may say one thing while an account beneficiary designation or ownership structure says another. Your attorney can help determine whether the legal components of your plan are coordinated appropriately.
5. Does my plan account for the people and organizations that matter to me?
Estate planning can be about more than distributing money. It can also involve charitable intentions, family support, business interests, and other priorities.
Start With a Conversation
Estate planning can feel overwhelming when approached as one large project. Instead, consider starting with an inventory.
Gather information about your major assets, financial accounts, insurance policies, business interests, existing estate-planning documents, and beneficiary designations.
Then consider which professionals should be involved.
An estate-planning attorney can address the legal structure and documents. A tax professional can help evaluate applicable tax considerations. A financial advisor can help connect your estate-planning decisions to your broader financial strategy.
Working together, these professionals can help you evaluate the different pieces of your plan within their respective areas of expertise.
Most importantly, don’t assume that an estate plan is something you can create once and forget about.
Your life changes. Your family changes. Your assets change. Laws and tax rules change.
Your estate plan may need to change, too.
Make Estate Planning Part of Your Financial Checklist
Estate planning is ultimately about preparation.
It can help you put important decisions in writing, organize your financial affairs, and give your loved ones clearer direction about your wishes. While no plan can eliminate every uncertainty, thoughtful planning can help you address many of the questions that may otherwise be left for someone else to answer.
During Estate Planning Awareness Month, consider whether your estate plan still reflects the life you’re building and the legacy you hope to leave.
And if you’re not sure where to begin, start with a conversation.
At Agemy Financial Strategies, financial planning can include helping you understand how your estate-planning considerations fit into your broader financial picture. Because estate planning involves legal and tax matters, we encourage clients to work with qualified estate-planning attorneys and tax professionals when developing or updating their plans.
The goal isn’t simply to plan for what happens to your wealth. It’s to make sure your financial strategy reflects what matters most to you—today and for the future.
Visit agemy.com to learn more about Agemy Financial Strategies and start the conversation.
This material is provided for informational and educational purposes only and is not intended to provide legal, tax, accounting, or individualized investment advice. Estate planning involves legal and tax considerations that vary based on individual circumstances and applicable laws. Agemy Financial Strategies does not provide legal or tax advice. Please consult with qualified legal and tax professionals regarding your specific situation. Investment advisory services involve risk, including possible loss of principal. Past performance is not indicative of future results. No strategy or planning approach can guarantee a particular outcome.
