Although visions of the ultra-rich may come to mind when you first think about it, estate planning is actually an important part of anyone’s retirement plan, regardless of their income, tax liability, or age.

Of course, the process can seem overwhelming to start, but estate planning really comes down to thinking about the people and assets that are important to you and your loved ones and developing a plan for them that best fits your wishes.

So if you are looking to get started with your own estate planning effort or if you want to make sure your existing plan covers all the necessary aspects, here are four key estate planning strategies that all families should consider.

1. Identify People You Trust

It isn’t always the easiest conversation, but you need to identify people you trust to help you carry out your vision for your estate and ask them to do so. Similar to deciding who will take on the role of executor in fulfilling your will, identifying key people to assist with your estate planning is critical for all of the moving parts to fall into place just as you wish them to.

Some key roles, which can be played by trusted friends, family, or professionals, include:

  • Power of attorney: An individual who can make decisions about you and your affairs if you are unable to, either temporarily or permanently
  • Healthcare power of attorney: An individual who makes medical and health-related decisions on your behalf (may or may not be the same person who serves as your power of attorney) 
  • Guardian (if needed): The person responsible for making decisions for and caring for minors or dependents still in your care
  • Financial advisor: A professional who can assist you in organizing your financial affairs to best fit your family’s goals and needs

2. Double-Check Your Beneficiaries

Although it may seem like you are just doing an easy “check the box” activity, taking the time to identify and confirm your beneficiaries for your bank accounts, retirement plans, insurance plans, and related items is actually a very important and legally binding step.

Make sure to go through each of your life insurance, pension, savings, retirement, and other accounts that can have beneficiaries identified and ensure that they align with your preferences on who will inherit your money. If you don't have any living beneficiaries named when you die, your retirement and other financial accounts can wind up being decided and distributed in a probate court.

3. Understand Your Tax Liabilities

Each state can have its own different rules, so be sure that your estate plan reflects and abides by the tax laws and guidelines for estates in the state where you reside. 

Similarly, you need to understand the federal and state tax exemptions and fees associated with an estate of your size. For example, in 2021, the federal estate tax exemption is $11.7 million per individual estate. On top of that, 12 states and the District of Columbia also impose an estate tax.

4. Know Your Options

Finally, use your tax and financial options to your advantage. 

One key way to do so is to leverage the power of tax exemptions for gifts and tax deductions for donations. In this way, you can consider sharing your wealth with those you love or with a cause you care about while you’re living and benefit from not only the good feelings but also the annual gift tax exclusion. In 2021, the federal government allows you to give up to $15,000 per person per year (or $30k for married couples). As another example, you can also make tuition payments or assist with medical expenses without triggering the gift tax.

Another option your family has is establishing a trust. These options include:

  • Revocable trust
  • Irrevocable trust
  • Grantor retained annuity trust 
  • Charitable remainder trust

Each has its own advantages and implications for your estate, so we recommend leaning on your team of professionals to find the best fit for you and your family.

Take the Next Step

We understand that it can be overwhelming—emotionally and mentally—to think through your retirement and estate planning. But taking the time to do so will help make sure those you love are provided for in a way that matches your wishes. 

Of course, these are just some of the key actions you can do on your own right now. Do not feel like you have to make all these decisions on your own. Our team of professionals is here to help you and your family along each step of this journey.


We would love to speak with you. In the meantime, we welcome you to read our free resource, Creating a Personal Financial Plan to Help You Reach Your Money and Life Goals.

Creating a Personal Financial Plan to Help You Reach Your Money and Life Goals

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