Skip to main content

There used to be a popular saying on t-shirts and bumper stickers that the person “who dies with the most toys or things wins”.

Well, you can’t really “take it with you” so who will get your assets when you die?  Will they get a lump sum?  Will they get it immediately?

What Is Estate Planning?

What you own when you die is called your “estate” so the answer to the aforementioned questions depends on your estate planning:  how you’ve set up your assets to transfer when you die.  Your estate plan defines your financial legacy.

Your Last Act:  Make It a Good One

Will your wealth be distributed in an organized manner or will it be a burdensome, expensive, lengthy process?  How your assets transfer may be the last thing you “do” so it’s important to make that final note a good one.

Before we mention some strategies to use to plan for wealth transfer, let’s discuss the way NOT to do it:  having no estate plan.

Your Plan or the Government’s Plan

If you don’t provide instructions for your estate, the government will apply its plan to your financial affairs–to your estate, taking it through what’s called a “probate”, a legal process to sort out what you owned and owe before applying whatever rules and tax rates that prevail at that time.

It’s generally preferable to avoid probate, because your affairs may become public so anyone may see what you owned when you died.  Probate may mean a lot of administrative work for your family, including paperwork, fees, the potential for family arguments over money, possible otherwise avoidable tax liabilities, and delays measured in many months.

Some Common Financial Legacy-Related Terms

A Will – A will describes your wishes relating to the distribution of your property and the care of children in the event of your death.

A Trust – A trust is a fiduciary arrangement that allows a trustee (the person responsible for administering the trust) to hold assets on behalf of a beneficiary or beneficiaries.  There are many types of trusts, an entity which holds assets and distributes them according to instructions set by you and your attorney.

Revocable vs. Irrevocable Trusts

As the terms suggest, a trust may be established which can be changed by the person who created it, called a revocable trust.  Or, the trust can be established and placed beyond the control of the person who created it, an irrevocable trustIrrevocable trusts are generally used to remove assets from an individual’s estate, in turn removing them from potential individual taxation and placing them under the instructions of the trust in which the asset is placed.

Estate TaxTax law which levies a tax on the estate of individuals with assets above a certain amount, generally in the multimillion dollar range.

Charitable Giving

Strategies may be used to donate to your favorite charity while taking advantage of advantageous provisions of federal tax laws, helping both the donor and receiving charity save money.


  • Transferring wealth after death requires planning to help ensure privacy, efficiency, and expediency.
  • There are legal terms to know and legal strategies to use.  The more complex your financial situation, the more helpful it may be to consult a tax and legal advisor.
  • Life insurance, because it is based on contractual beneficiary designations, supersedes instructions stated in a will.
  • Proper estate planning is a way to help protect assets from unnecessary conflict and use strategies to minimize the tax impact on your assets.