Estate Planning: Understanding the Basics

An estate plan provides the security of knowing that your assets are properly managed and distributed, your family is protected, and your wishes are fulfilled when you pass away or are unable to make decisions for yourself.

Unfortunately, estate planning can be overwhelming – leaving too many families unprepared and subject to unnecessary financial and emotional burdens. In fact, a 2024 survey by Caring.com indicates that 68% of Americans do not have an estate plan.

By being proactive today, you can preserve family wealth, create an enduring legacy, and ensure that your loved ones are taken care of down the road.

We’ve outlined a few essential tips to help start your planning for future generations.

Estate planning is much more than assigning beneficiaries and transferring your assets. It involves every aspect of your life, including naming guardians for minor children, deciding who can make medical decisions on your behalf, designing strategies to mitigate estate taxes, and protecting your business.

Because there are many components, a great first step is to perform an in-depth review of your assets, including:

  • Real estate
  • Cars and jewelry
  • Bank accounts
  • Insurance policies
  • Cash, investments, and annuities
  • Retirement accounts
  • Businesses

Complete estate planning involves a full spectrum of essential documents to safeguard your assets, your family, and yourself. As laws change and your life circumstances evolve, we recommend that you review and update your plan accordingly. Typical documents include:

Will
A Last Will and Testament (“will”) is a legal document that establishes your intentions for the distribution of your assets and the care of your children, dependents, or pets after your death. If you die without a will – also called “intestate” – the distribution of your property and assets will be determined by state laws and courts.

Trusts
A trust is a legal agreement that holds your assets and property on behalf of your beneficiaries. Trusts can help avoid probate, direct how trustees can transfer property, help manage your affairs if you become incapacitated, and lessen the tax burden on your estate.

EverPar can help you understand the types of trusts that may best fit your unique circumstances, including revocable living trusts, irrevocable trusts, special needs trusts, charitable trusts, generation-skipping trusts, and more.

Durable Power of Attorney
A power of attorney (POA) gives a trusted person the right to make legal, financial, or health-related decisions on your behalf. The term “durable” means that the POA stays in effect if you become physically or mentally incapacitated during your lifetime. Without a POA, decisions regarding your affairs may be left to a judge.

Advance Healthcare Directive
Advance directives provide instructions for your medical care if you become seriously injured, ill, or unable to communicate your wishes. Two commonly used medical directives include:

  • Living will: Details how you want to be treated by doctors in a medical emergency and often includes guidelines for the use of life-saving treatments.
  • Durable POA for Healthcare: Designates a healthcare proxy who you permit to access your medical records and make decisions on your behalf.

Federal and state taxes can significantly reduce the value of your estate and the amount that your beneficiaries will inherit. That’s why tax strategies should be a critical component of your estate planning process.

Three taxes that you should be aware of include:

  • Estate tax: The federal estate tax is imposed on assets worth more than the set threshold of $13.61 million per individual for 2024. This cap is scheduled to revert to previous levels at the end of 2025, which is an estimated $7 million per person adjusted for inflation. Twelve states also impose their own estate taxes.
  • Inheritance tax: Inheritance taxes are paid by beneficiaries who receive assets (above specific thresholds) after someone passes. Six states currently impose an inheritance tax.
  • Gift tax: This tax is levied on gifts that exceed a certain amount established by the IRS. The giver is responsible for paying the tax. Annual and lifetime limits exist for how much people can give before being taxed.

Tax planning can help maximize the value of your estate and the wealth transferred to your heirs. In addition to setting up trusts or gifting money or assets, estate planning approaches to help reduce your tax burden include:

  • Setting up a 529 plan to pay for education expenses for children or grandchildren rather than distributing the money after you pass.
  • Donating to qualified charitable organizations during your lifetime to reduce the size of your taxable estate.

Estate planning gives you confidence that your affairs will be responsibly managed and your legacy will be secured.

As there are many moving parts, it’s important to have a trusted estate planning team by your side.

EverPar can provide objective advice and collaborate with your estate planning attorneys and other professionals to develop a plan that reflects your unique needs, incorporates your vision, and protects your assets and your family.

Let’s discuss your vision and how we can help you plan today for future generations.  

EverPar Advisors LLC (“EverPar”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where EverPar and its representatives are properly licensed or exempt from licensure.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.  There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.