By: Brennan Decima, CFP® . November 20th, 2025
Most people assume that estate planning is only for those with a ton of money or on their deathbed. This could not be farther from the case. Estate planning is about organizing your affairs for those you care most about. If you weren’t around to take care of things, what do your loved ones need to know?
But here’s the surprise: Estate Planning doesn’t have to be complicated!
Estate planning does not eliminate grief. Having an estate plan won’t speed up the grieving process. However, in a time that is the most emotionally devastating, the kindest thing someone can do is to make sure their intentions, values, and property are properly organized and communicated.
In this guide, you’ll discover:
- The 4 ways to pass assets at death—and the pros and cons of each option
- The difference between a will and a trust
- How to protect against incapacitation
- Smart strategies to minimize taxes and protect your legacy
By the end, you’ll know exactly how the various strategies fits into your planning, and what steps you can take now to make sure your heirs keep more of what you’ve built.
Key Takeaways
- There is no one way to pass assets at death
- Everyone can benefit from an estate plan
- Organizing your affairs early can avoid major conflict later
Where to start with Estate Planning?
When thinking about organizing your estate, most people focus on creating a will and/or trust. But there are two other ways that assets can be transferred that are important to be aware of.
Before hiring a lawyer to draft a will or a trust, let’s start with the low hanging fruit. The two easiest ways to pass on assets are by naming a beneficiary on an account, or having a jointly titled account. Both of these options avoid probate, are less expensive, and typically quicker than a will or trust. Naming a beneficiary and jointly titled accounts also supersede what you have in your trust or will. So it is critical to make sure all of your accounts and documents are aligned to avoid unnecessary conflict, costs, or tax burdens.
For example, let’s say that Laura’s revocable trust says that all investments are split evenly between her 5 children. However, her old employers 401(k) beneficiary has her ex husband listed. She has not updated it since she divorced. Upon her death, her ex husband would inherit 100% of Laura’s old 401(k)
Or Robert, who sets up a trust for his 18 year old son, whom Robert feels should not have access to the money until he is 50. However, his son is also a direct beneficiary on Robert’s life insurance. As a result, if no changes are made to the life insurance beneficiary designation, his son will receive those assets outright instead of by the trust.
Both of these situations involved paying an attorney to put together a plan to address those concerns, but both Robert and Laura failed to coordinate appropriately. Without properly addressing this, their goals are in jeopardy.
To help avoid this for your family, let’s review the 4 common ways assets are passed at death.
1. Beneficiary Designation
This most frequently applies to life insurance, bank accounts, investment accounts, retirement accounts and annuity contracts.
Key Considerations:
- When naming a beneficiary, the assets go directly to that beneficiary, and avoid probate.
- Beneficiary designations are account specific. The beneficiary needs to be updated each time a new account is opened.
- If no beneficiaries are named, the account will pass through probate
- If the estate has unpaid taxes, expenses or debt, it may prevent a challenge to close the estate if everything is passed outside of probate.
2. Joint Titled
This is when an account or asset has multiple owners listed on the account. Normally this is done with married couples or business partners. A common scenario would be a home or car with two owners on the deed and title. Joint bank accounts or investment accounts also fall into this category. If one owner dies, the assets avoid probate and are directly transferred to the surviving owner.
Key Considerations:
- Not all Joint accounts go directly to the other owner at death. If the account is Joint Tenants in Common, the owner’s property interest becomes subject to probate.
3. Trust
When a trust is created, the trustees of the trust manage the trust assets on for the beneficiaries, and they are distributed per the trust document terms.
Key Considerations:
- If assets are not transferred or retitled to the trust, they are not subject to the trusts terms.
- Trusts can provide protection against divorce, creditors, lawsuits
- Trusts offer privacy
- Trusts allow assets to be distributed over a period of time
- Some family’s create a “pour-over” will. This transfers assets to the trust at the time of death. It is important to be aware that this would send the assets through probate.
4. Probate
Probate is the legal process to distribute assets in a deceased estate. The assets are all distributed at one time. If assets have not been transferred by beneficiary, trust, or joint account, then the remaining assets are distributed by the terms of the will. The will is read in front of a judge, and it is both public and time consuming. Depending on the state and size of the estate, it can be expensive as well.
Key Considerations:
Many clients we work with have homes in multiple states. If you have property titled in. your name in different states, you may be forced to go through probate in both states.
Strategies to Minimize Federal Estate Taxes
Many of our clients look for ways to transfer assets without being exposed to significant federal estate taxes.
Here are a few strategies that can help manage your potential tax exposure over time:
Annual Gifting: The annual gift tax exclusion allows you to transfer money to any number of recipients each year without impacting your lifetime exemption. By regularly gifting, you reduce your estate size, which can reduce the amount potentially subject to taxation. This approach is useful for families who want to share wealth while they are living with their loved ones. The annual gift tax exclusion is $19,000 per recipient in 2025.
Lifetime Gift Exemption: Beyond annual gifting, you also have a lifetime exemption, which is the same amount as the current estate exemption. The lifetime exemption allows you to transfer a large amount of your assets during your life without worrying about gift tax. Many families decide to transfer property that they feel has significant appreciation potential in the future. This strategy keeps all future appreciation out of the estate tax calculation.
Philanthropy: Donating to nonprofits allows you to make an impact with the causes that matter most to you, while also potentially reducing current and future tax liabilities. Direct gifts, donor-advised funds, or charitable remainder trusts are all strategies to explore if there is a cause that is important to you.
Irrevocable Trusts: Trusts that have no ability to be changed or revoked removes assets from your taxable estate. The trust holds your assets outside of the estate, keeping the future appreciation out of the final estate tax calculation.
Family Limited Partnerships (FLPs): An FLP isn when assets are transferred into a partnership, then limited partnership shares are distributed to relatives. The strategy allows valuation discounts if the transferred shares have restricted rights. It also divides ownership among multiple people, which can bring the estate’s taxable value down.
Estate Tax FAQs
1. When is the best time to start estate planning?
It is never to early to start thinking about planning for the future. Life events like buying a home, marriage, divorce, having a children are great reminders to create or update your estate plan. As laws and priorities change, a good best practice is to review your documents every 3-5 years.
2. Do I need Life Insurance?
Once you retire, a common misconception is that you no longer need your life insurance policy. Most people buy life insurance as a way to replace income for their family. At retirement, that risk is less of a concern. But are you aware that there are other ways that life insurance can still benefit you and your family?
Life insurance can be used to build wealth or reduce potential estate taxes for your heirs. It can also be prudent to have life insurance if you have a high level of debt, own a business, or just want to leave a larger inheritance. Many policies also have provisions to cover long-term care needs.
Some people use an irrevocable life insurance trust (ILIT) to transfer the policy proceeds out of their estate. If done correctly, this strategy can have a massive benefit on reducing estate taxes and providing estate liquidity.
3. Are retirement accounts subject to estate tax?
Yes, if you are over the federal estate tax limit. Retirement accounts are included in your gross estate for federal estate tax purposes. This applies even if the funds go directly to named beneficiaries.
How We Help Retirees Navigate Estate Taxes
Estate taxes can play a major role in determining how much of your hard earned legacy ultimately reaches the people or causes that matter most to you. Even if you live in a state without its own estate tax, federal rules can add layers of complexity to your planning. This becomes especially important for retirees who own property in multiple locations or whose estate may approach the federal exemption threshold.
There are many strategies to help reduce potential estate tax exposure, ranging from simple annual gifts to more advanced tools such as irrevocable trusts or charitable giving plans. Our job is to help you understand the options available, determine which approaches best support your goals, and coordinate them in a way that feels clear and manageable.
We take a holistic look at your financial picture, including the assets you own and how their value may grow over time. That includes reviewing current exemption limits, estimating future tax liabilities, and evaluating how property in different states might be handled under various estate laws.
From there, we can build a tailored plan that incorporates tax-efficient transfer strategies, addresses liquidity needs, and adjusts over time as laws change or life circumstances shift.
We also believe the strongest estate plans come from collaboration. If you already work with an estate planning attorney or tax professional, we’re happy to coordinate with them so every part of your plan fits together seamlessly. And if you’re still assembling your team, we can connect you with trusted professionals who regularly work with retirees and understand the unique considerations that come with this stage of life.
When you’re ready, we offer a complimentary consultation to help you clarify your estate planning goals and explore your choices. Whether you’re just beginning the process or fine-tuning an existing plan, we’ll walk with you step-by-step, offering clear guidance tailored to your needs.
Together, we can create a strategy that protects your estate, honors your wishes, and provides peace of mind for you and the people you care about..
This information is intended for educational purposes only and should not be considered personalized tax, legal, or financial advice. Estate planning strategies may not be appropriate for everyone and can vary based on individual circumstances. Before making any decisions regarding your estate, taxes, or financial plan, you should consult with a qualified attorney, tax professional, or financial advisor. Laws and regulations are subject to change and may affect the strategies discussed. No specific outcomes are guaranteed.
