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Estate planning, prepare for the inevitable.

Estate planning, prepare for the inevitable.

Estate planning, prepare for the inevitable.

How essential is planning your final estate? This question is seldom answered confidently during client/advisor conversations, not too often do we ponder our own inevitable demise. In reality, for anyone wishing to leave anything of value to someone requires some form of estate planning.  At the least, taking simple estate planning steps can provide some respite to those who’ve lost a loved one during the difficult time.

Why bother creating an estate plan? For starters, dying without a plan (or will) in place means you have died “intestate”.  In plain English this means your possessions will now be passed on through the court system of your home state. If you’re not okay with complete strangers divvying out your assets or have an extra needs child requiring care and wish to have a trusted family member provide care, creating an estate plan is imperative.

Three distinct tools exist to plan for one’s passing of an estate; beneficiary designations, wills, and trusts all facilitate the transfer of assets while hopefully saving time and money for your heirs.

Beneficiaries: The most basic step to planning your estate. Naming a beneficiary to assets such as IRA’s or bank accounts, assets can transfer without the need of probate. A common term for this is “Transfer on Death” literally meaning that a beneficiary will receive the asset once they have a death certificate to commence the transfer. This can be helpful in the event that final expenses (funeral costs, medical bills, outstanding debts, etc.) can be handled by the decedent’s executor in a timely fashion. Reviewing beneficiaries on a regular basis (yearly or after life events, for example) is highly recommended. For example, a person divorces and remarries without updating beneficiaries, this person then dies leaving their assets to the previous spouse probably won’t go over well!

Wills: In essence, the legally documented will provides a list of “who gets what” when a person passes away. Physical possessions such as a vehicle, heirlooms, money, etc. can be named to a beneficiary within the will. While the will provides direction of assets after death, the probate process still occurs. Heirs to an estate must note that any outstanding debts of the deceased are open to creditors for collection (for a certain period of time) and in some cases, heirs may be “disinherited” if outstanding debts outweigh the value of the estate. Another crucial part of a will pertains to parents of minor children. For instance, in a simultaneous passing of parents without a will, the courts determine who will take custody of their minor children, thus naming a “guardian” within a will can offer peace of mind knowing that the state won’t appoint a complete stranger to foster the children. Coinciding with beneficiaries, reviewing a will on occasion is critical.

Trusts: For those that truly wish to dictate how assets are handled at death, the creation of a trust can simplify the process. A trust, in a way, is a living document that can act as if the deceased person remained alive to provide instruction perpetually in some cases.  A “trustee” is named at creation of the trust and must adhere to carrying out the provisions of the trust. In retrospect to a will, trusts can avoid the probate process and more than likely save time and money by abstaining from the court system. Another benefit is that almost anything can be named to a trust. A vacation home in another state, life insurance proceeds, etc. can all be the beneficiary of a trust. At passing, a properly designed trust can literally contain all the assets of the deceased and the trustee will have instant access to properly divide the assets amongst beneficiaries.

Quick Comparison:


  • Public disclosure of your assets
  • Court approved Guardians/Conservators
  • Potentially expensive costs
  • Controlled by court


  • No probate
  • You appoint who handles your assets
  • You appoint guardians
  • Privately controlled
  • Perpetuity of control

A comprehensive total of your assets, including life insurance (which is included in estate taxation) are critical to planning for your estate. If you could care less what happens at your passing, disregard any of this article and let the courts do their job. However, if you wish to have control and better ensure your loved ones are cared for financially after your passing, seeking legal counsel is the first step to creating a plan.


Nate Lovik

Investment Advisor Representative


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