Robert Warner

When Should I Complete My Estate Plan? Planning Ahead is Essential to Managing Your Personal and Financial Affairs

Intellectually you may realize you need to prepare for the worst, and have a plan in place for your end, even though you don’t want to spend time thinking about it much less actually establishing an entire estate plan.

If so, you’re not alone. A 2015 survey by CNBC, showed that 38% of individuals with investable assets of $1 million or more have not consulted with a financial professional to establish an estate plan. Among individuals with $5 million or more, 68% were more likely to have a plan, compared to 61% of those with $1 million to $5 million in assets.

There are varied reasons people avoid estate planning or making a will. According to the Financial Planning Association and other professionals, reasons someone avoids estate planning, include:

  • They don’t want to think about death
  • They’re too busy
  • They believe their estate is not large enough to require an estate plan
  • They’re unsure over elements of their plan, such as how to distribute assets or who should be named a guardian for children
  • They have life insurance and expect to receive an inheritance, so believe no further planning is needed
  • They believe an estate plan is expensive and complicated, and must include complex elements such as multiple trusts

Thoughtful early attention to your plan can help ensure your finances will be in order for your family and future generations. Having an estate plan in place, will:

  • Assure you and your spouse’s affairs are handled the way you wish
  • Allow you to avoid probate court
  • Reduce estate taxes by placing property and other assets in trusts
  • Make provisions to care for and protect children and other beneficiaries
  • Protect your assets from unforeseen creditors or lawsuits

More complex estate plans can address issues of succession for a family business or provide for a family member who lacks the ability to manage his or her financial affairs due to disability or poor judgement. Trusts can be designed so beneficiaries receive an inheritance in stages or can name a trustee to oversee the distributions over time.

After a number of years of uncertainty over estate taxes, the American Taxpayer Relief Act established permanent rules for estate and gift taxes effective in 2013. Under this legislation, the $5 million federal estate tax exemption carries an annual adjustment for inflation. For 2015, the exemption is for up to $5.43 million per person, or $10.86 million for a couple.

However, having an estate under those amounts does not mean there is no need for an estate plan. Estate planning plays a wider role in managing finances, minimizing taxes, planning for medical care and end-of-life directives, and providing for family and future generations.


Consider key elements – Before meeting with an estate planning attorney, identify key elements of your plan

  • Who should inherit your assets and should the assets be divided?
  • Who should care for your children if you cannot, include how to provide for your children’s education.
  • Who should handle finances for you and your spouse if you become incapacitated?
  • Who should administer your estate plan and distribute your assets?
  • Who should to be the executor of your wills? This person will ultimately be affirmed by the court and act as a fiduciary representing your best interests and those of your beneficiaries.

Take inventory

Make a list of current assets and liabilities for you and your spouse, which will help your estate planning attorney calculate your net worth and determine whether you have an estate that would be subject to taxes. The list should include your home and any other property you own, vehicles, jewelry, artwork and any other objects of value. Other elements of the inventory include financial statements from bank, brokerage and retirement accounts, safety deposit boxes or safes, insurance policies and liabilities such as mortgages, lines of credit and all other debt.

Determine your beneficiaries

In most states and in the District of Columbia, you can disinherit anyone except your spouse (unless your spouse waived that right in a marital agreement).  You’ll also need to designate secondary beneficiaries in case an heir dies before you do or if a charitable organization no longer exists when you die.

Should you establish a trust?

Your beneficiaries can receive assets either directly or through a trust or trusts.  The decision to create a trust will likely depend on multiple factors such as a benefactor’s age, health and the family’s financial circumstances. There are multiple types of trusts but a common choice is a revocable living trust that manages and distributes your assets, and avoids probate after you die. If you establish a trust, you will need to work with your attorney to determine when the beneficiaries will receive the assets, how long the trust will exist and what happens if the beneficiary dies before the assets are spent.


Depending on your family and financial circumstances, you and your spouse might want to work with more than one professional expert on your estate plan.

Estate planning team – It is not uncommon for estate planning teams to include an estate planning attorney, a tax professional and a financial advisor.

  • Attorneys can craft or update wills and trusts as needed and make sure your plan meets all federal and state requirements.
  • Tax advisors help minimize taxes owed by your beneficiaries on the assets they inherit.
  • Financial advisors ensure your assets are managed specific to your needs, goals and risk tolerance.

Take inventory & prepare – Essential documents and information you will need or should create for your estate plan include:

  • Most recent will for you and your spouse; or first ones if you have not yet had them drawn
  • Trusts, either your own or those in which you, your spouse or other heirs are beneficiaries
  • Financial powers of attorney
  • Pre-nuptial or marital agreements, if applicable
  • Business ownership documents and information, if applicable
  • Advance directives such as healthcare powers of attorney or living wills. Typically, these documents are drafted at the same time to ensure a couple’s wishes regarding life-sustaining treatment if they become terminally ill are carried out.

Review and update – Once you and your spouse have an estate plan, you should plan to review and update if necessary every three to five years or whenever you experience a life changing event. You should review and/or update your estate plan when you experience:

  • The death of a spouse
  • The birth or death of a beneficiary or fiduciary
  • Moving to another state or country
  • A significant change in your financial situation
  • The purchase or sale of a business
  • Divorce or remarriage
  • If you, your spouse or beneficiary become physically or mentally disabled

The bottom line is that too many people focus on their current financial circumstances and don’t think about the future until it’s too late. But, the value of an estate plan goes beyond the time and money it can save your loved ones when you’re gone. Having an estate plan in place for your passing gives the loved ones you leave behind the assurance they’re taken care of.

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Views and comments expressed in this blog are those of the author and do not necessarily represent the positions of Cleary Gull or fellow Cleary Gull associates.