Estate Planning: Not Just for the Mega Wealthy


Estate planning might evoke images of the ultra-wealthy, however, anyone with assets or property of any sort should consider some type of estate planning to ensure their items are properly passed on. 

Estate planning might evoke images of the ultra-wealthy, however, anyone with assets or property of any sort should consider some type of estate planning to ensure their items are properly passed on. Additionally, those with minor children need to make provisions for their care as well.

This can be as basic as having a will and naming a guardian for minor children. Below are some estate planning essentials you should consider—no matter your net worth.


Wills designate the disposition of property and assets. If you die without a will, the intestate statutes in your state will designate how your assets are distributed—which might not be what you want. Wills can facilitate dealing with issues such as:

  • Disposition of property and other items
  • Designating who will care for minor children
  • Designating who will take care of any pets
  • Distributing other assets or items of value

Items passed via a will are generally subject to the probate rules of your state.

Minor children

For parents of minor children, it's important to designate a guardian in the event both parents are killed; otherwise, the court will do it for you. The person they designate as guardian(s) for your children might not be a person you would choose. Depending upon your situation, it may be a good idea to designate a separate person to administer the financial assets left to your children versus the person you designate as their guardian.

It’s important to remember that just because you designate someone to be the guardian of your minor children, they are not obligated to serve in this capacity. It’s important that you ask this person if they can and want to serve as guardian. It's also important to reconfirm their willingness periodically. People’s circumstances change—they get married, divorced or become ill. Above all, you want to be sure your children will be well-cared for by someone who is willing to take on this responsibility should something happen to you.

Beneficiary designations  

Beneficiary designations govern how the proceeds of life insurance policies, annuities as well as retirement accounts like a 401(k) or an IRA are distributed upon your death. These are sometimes called will substitutes as they override anything spelled out in a will pertaining to these accounts.

Beneficiary designations determine how and to whom retirement accounts and the proceeds from insurance policies are distributed and must be kept up-to-date—especially after a life change such as a marriage, divorce or death or a spouse.

For example, if you were to get divorced and then remarry, your ex-spouse would receive the proceeds of your life insurance policy unless you changed the beneficiary designation to reflect your new spouse or perhaps your children if that’s your intent.

Living trust 

A living trust is another way to hold property and is established during your lifetime. One advantage is that the assets in the trust are not subject to your state’s probate process and will pass more quickly to your heirs.

The term "trust" might conjure up thoughts of the mega-wealthy, but in reality, different trusts are used by a variety of people, no matter their income level. Trusts can be used for many things, including providing for heirs with specific needs. The trust is a vehicle to ensure the assets are managed for the needs of these specific heirs. 

In order to be effective, the trust must be funded, meaning that assets such as brokerage accounts and other property must be retitled in the name of the trust. Funding the trust ensures the assets will be managed by the designated trustee and will go to the designated beneficiaries of the trust. Assets outside of the trust could also be subject to the probate process in your state. Essentially, an unfunded trust is nothing more than a bunch of legal papers.

Living trusts can be revocable or irrevocable. An irrevocable living trust is just what it sounds like—once the trust is drafted and funded, it can’t be changed. A revocable living trust can be changed, assets can be added or removed, the trustee can be changed as well.

It makes sense to discuss whether or not a living trust makes sense for your situation with a legal or financial advisor.

Estate planning is an issue that needs to be addressed at some level by everyone, not just the wealthy. If you have assets or valuables that you want to pass on to heirs, some level of estate planning is generally needed to ensure this happens in a way that is in line with your wishes. Consider engaging the services of an attorney or a financial advisor to assist you.

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