Estate Planning 101: What Everyone Needs to Know

When most people hear “estate planning,” they assume it’s something only the wealthy need. But in reality, estate planning isn’t about how much you have — it’s about making sure your wishes are carried out and your loved ones are protected, no matter your net worth.

At its core, estate planning answers three crucial questions:

1. Where do you want your assets to go?

2. Who do you want to be in charge of your assets and decisions?

3. What rules do you want in place to guide those decisions?

   
   

Whether you’re just starting to think about it or revisiting an old plan, this blog will walk you through the basics — and some often-overlooked but critical concepts

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The 4 Phases of Estate Planning

Think of estate planning like building a house. There’s more to it than just signing a few documents. It’s a four-phase process:

1. Design Phase

This is where you define your goals. Just like an architect needs to know how you’ll use your home before designing it, your estate planner needs to understand your values, relationships, and objectives. For example:

Scenario: You want your daughter to inherit your business, but not until she finishes college. Your plan can include that specific condition.

2. Implementation Phase

Once the blueprint is ready, it's time to prepare the legal documents. This usually includes:

• Powers of Attorney (for healthcare and finances)

• A Living Will

• HIPAA Authorization

• Revocable Living Trust

• Will or Pourover Will

  
  

3. Funding Phase

This is one of the most overlooked steps. A beautifully drafted trust is useless if no assets are titled into it. This step ensures assets like real estate, bank accounts, and investment accounts are correctly retitled or designated to flow through your plan.

Scenario: John creates a trust but forgets to re-title his brokerage account into it. When he passes, that account still goes through probate, defeating a key purpose of his trust.

4. Monitoring Phase

Your plan isn’t “set it and forget it.” Life changes — marriages, births, new laws, or even moving to a new state can impact your plan. Review it every 3-5 years, or sooner if major life changes occur.

Step-by-Step: What Should Be in Every Estate Plan

Step 1: Core Estate Planning Documents

These are the must-haves for everyone:

• HIPAA Release – Allows someone to get your medical information.

• Healthcare Power of Attorney & Living Will – Appoints someone to make medical decisions if you can’t, and spells out your wishes for end-of-life care.

• Durable Financial Power of Attorney – Lets someone manage your financial affairs if you’re incapacitated.

• Will or Pourover Will – A standard will distributes assets. A pourover will transfers any missed assets into your trust.

• Revocable Living Trust – Avoids probate, maintains privacy, and lets you name backup trustees if you're unable to manage your affairs.

  
  

Bonus Benefit: A properly designed revocable trust can include protections for your children’s inheritance — shielding it from lawsuits, divorce, or creditors.

Step 2: Review Beneficiary Designations

Beneficiary designations on retirement accounts, life insurance, or payable-on-death accounts override your will or trust. It’s critical to review them regularly — especially after life changes.

Scenario: Jane remarried but forgot to update her IRA beneficiary. When she passed, her ex-husband received the account. A 5-minute update could have prevented a major family fallout.

Step 3: Planning for Estate Taxes (for Higher Net Worth Clients)

If your estate is approaching or over the estate tax exemption (currently over $13 million per person, but dropping in 2026), discounting techniques can reduce taxable value:

• Fractional ownership of assets

• Family partnerships or LLCs with transfer restrictions

• Recapitalizing shares into voting and non-voting types

  
  

Step 4: Transferring Assets with Irrevocable Trusts

Irrevocable trusts can be powerful tools to remove assets from your estate — shielding them from estate taxes, creditors, and divorce.

Example: Tom gifts $1 million into a trust for his kids. The trust grows to $3 million. Upon Tom’s death, the full $3 million stays outside of his estate — saving nearly $1.2 million in estate taxes. However, if the trust sells those assets later, capital gains taxes could apply since there’s no “step-up in basis.” These are tradeoffs a good advisor will help you weigh.

Charitable Giving: More Than Just a Donation

You can give to charity directly or through vehicles like:

• Donor-Advised Funds – Make a donation now and recommend future grants to charities.

• Charitable Trusts or Foundations – Ideal for large gifts and long-term impact.

  
  

Besides doing good, charitable giving can reduce both income and estate taxes.

Why This Matters — Even If You’re Not Rich

Scenario: A single mother has no estate plan. If something happens to her, the state determines who will raise her child and how her money is used — not her.

Estate planning isn't just for people with large estates — it’s for anyone who wants to:

• Protect loved ones

• Avoid unnecessary court costs

• Make their wishes known and followed

  
  

Final Thoughts

Your estate plan should be a living reflection of your goals, values, and relationships. It’s not just a set of documents — it’s a roadmap for protecting your family and legacy.

At Sustainable Retirement Solutions, we work alongside estate attorneys and tax professionals to make sure your plan is not only legally sound, but also practical and aligned with your financial goals.

Have questions about your plan? Let’s start with a conversation.