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Estate planning guide

A comprehensive look at estate planning

Last updated: September 26, 2022 |

Article published: December 14, 2021

If you hear the words “estate planning” and think of multimillionaires with huge mansions and valuable family heirlooms, you’re not alone. But the truth is they aren’t the only ones who need an estate planning strategy. So we’ve put together this estate planning guide to help you navigate this process.

The basics of estate planning

Really, estate planning is just another way to make arrangements for what happens to your personal assets if you were to pass away or become incapacitated. These assets could include your home or car, any savings you have and even your social media accounts. In this broad sense, everybody has an “estate.”

It’s important to be clear about how assets should be managed and distributed if you or someone in your family were to die. This is most commonly done through a will, of course, as well as documenting your preferences for a burial or cremation, who has access to your digital assets and any other final wishes.

But there are other avenues to explore.

Health care directive

What if, instead, you or a family member suffered a severe injury or illness? That’s why all adults 18 and older need a medical directive. This legal document explains your preferences for medical treatment if you are on life support. Do you want machines to keep you alive through heroic means, on the theory that your doctors will find a way to restore you to health tomorrow? Or would you rather be allowed to pass away peacefully, painlessly and quietly with loved ones at your bedside?

There’s no right or wrong answer to such questions. But without a medical directive stating your wishes, it could create conflict among your loved ones, which is the last thing they’d need at such a time.

But the medical directive isn’t enough. After all, if you’re in a coma or unable to communicate, you can’t tell the doctors your preferences or respond to their questions. That’s why you also need a durable power of attorney. These are often combined into what’s called a health directive. Through it, you legally authorize a family member or someone you trust to make medical decisions on your behalf if you’re not able to articulate your wishes to the hospital staff and they can require doctors to honor your medical directive.

Together, these two documents can ease family angst and avoid arguments at a time when everyone is under great stress.

Digital assets

We’d be remiss if we didn’t include digital assets in our estate planning guide as we live in such a technology-driven world. Between smartphones and the cloud, we practically have everything we need at our fingertips. Most don’t realize that there is more to digital assets than just online banking and retirement accounts. It can also include your social media and email accounts, and anything with a username and password.

It is important to designate individuals that can access these accounts upon your passing. If possible, also provide current login information and any PINs or answers to security questions. While these are good tools for cybersecurity, they become a hindrance to those who actually need to access your accounts.

What about trusts?

As part of our estate planning guide, we also encourage many of our clients to consider a revocable living trust. Revocable means you can change your mind about any aspect of the trust – such as who gets your property (easing worries you might make a mistake). Living means the trust can manage your assets if you become unable to so do – for example, paying your bills while you’re in the hospital. Finally, and most importantly, upon your death, it allows your assets to pass to your spouse, children and other heirs without them having to go through probate court. This can help them get their inheritance faster (whereas probate can take a year or more), while also avoiding related costs (often, 5% of the value of your assets) and publicity (probate is a public process; these trusts keep everything private).

There are many more kinds of trusts. Some clients may need additional documents, such as a marital trust (also called an A/B trust or credit shelter trust), which reduces estate tax liability. If you have an heir who could squander any money you provide, a spendthrift trust can dole out the inheritance as an allowance instead. A special needs trust is used if you have an heir who has disabilities that prevent them from working or living independently. The trust can provide financial support without interfering with social service payments. There are also charitable remainder trusts, grantor retained annuity trusts, family trusts – the list is extensive. If you have a need, there’s probably a trust that can help.

Be your own expert

Don’t worry – you needn’t be an expert in estate planning. But you are the expert on your own situation. After all, no one knows better than you what your assets are and how you want to disperse them.

Once you’ve given it some thought, talk to your financial advisor, who can help you design an estate plan. They will refer you to an attorney who’s an expert in this field, then they can work together to determine the strategy you need. If you choose another attorney, just make sure they specialize in estate planning.

Most estate attorneys charge flat rates for their work and will tell you the cost up front. As a general guideline, the legal bill can range from under $2,000 to more than $5,000, depending on the complexities of your situation. Everyone’s circumstances are different, but for most cases, we believe the costs are well worth it.

Remember, estate planning goes beyond just leaving a will or designating beneficiaries on accounts. Taking steps now to ensure your wishes are carried out can save those who love you from suffering additional heartbreak and stress. Reference this estate planning guide as you prepare – or review – your estate plan and consult with your financial advisor for additional assistance or recommendations.


The use of trusts involves a complex web of tax rules and regulations. This material was prepared for informational and/or educational purposes only. Neither Edelman Financial Engines, a division of Financial Engines Advisors L.L.C., nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

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