With a 2016 federal estate tax exemption of $5,450,000 for individuals and $10,900,000 for married couples, it is easy to see why many who are under the exclusion amount might feel that they are not impacted by estate planning. While estate tax avoidance is a very important aspect of planning, there are many other areas that need to be considered beyond just taxes. Estate planning deals with the transfer of your assets post-mortem. Beyond the tax implications of these transfers, how these assets are controlled and where they ultimately transfer to should be considered regardless of net worth. In addition, decisions pertaining to the care of minor children or what shall happen if you become incapacitated should be considered during the estate planning process. These are all important decisions to be made regardless of one’s net worth.

Control the Transfer of Assets

A major benefit of estate planning is being able to control the transfer of your assets post-mortem. If you were to pass without a will or any estate planning documents in place, your estate would be “intestate” and the distribution of your assets would be subject to the intestacy laws of the state in which you reside. State intestacy laws typically try to split assets among the surviving spouse and other family members; however, these family members could range from immediate family to an estranged relative or in-laws. Not only would there be no control of who inherits the estate, but there would be no control over any specific assets or how much of the estate would be transferred to each beneficiary. A few key strategies to consider to better control the transfer of assets post mortem are highlighted below.

Last Will & Testament

A Last Will & Testament allows you to list out what assets you would like to transfer and who you would like the assets transferred to. You are also able to designate an executor to help carry out the wishes of your will once you have passed. It is important to understand though that property transferring through a will can be subject to the probate process. The probate process is a court proceeding which can be costly, drawn out and may even lead to relatives disputing the transfer of assets. Wills that go through probate are also part of public record.

A will can be a great tool and does offer more control, but some may still want further control and to avoid the probate process.


A trust essentially allows the person establishing the trust to set rules and limitations on how the assets within the trust are to be held and distributed. Establishing a trust can offer a level of control over assets beyond that of a will. Assets that transfer via trust also avoid the probate process and are private transfers/not public record. Typically establishing a trust is more expensive than establishing a will; however, the savings on avoiding probate can help offset this higher expense.

There are many reasons to set up a trust and many ways to do so, but one common purpose is to provide support to the surviving spouse and children. With the level of control a trust provides, you may, for example, limit the amount of assets your children can have access to at different ages. Additionally, depending on how the trust is written, assets could be protected against the beneficiary’s creditors or an estranged spouse if a divorce were to occur. Trusts can be very effective estate planning tools, but with the many options on how to write up a trust, a conversation with a professional should be had to consider all potential strategies.

Titling of Assets & Beneficiary Designations

Another important aspect of estate planning that should be considered by all is how assets are titled. How the ownership of an asset is titled can prove to have a significant impact. For example, a home owned Tenancy by Entirety between a married couple would automatically transfer ownership to the surviving spouse, avoid probate, and would offer additional creditor protection beyond that of other titling methods. Also, some titling methods do not avoid probate, so it is important to be mindful of this.

In addition to how assets are owned and titled, beneficiary designations on your retirement accounts, life insurance policies and annuities should be considered. These transfers will avoid probate, but it is important to consider and review who will be receiving these assets if you were to pass away.

Beyond Transferring of Assets

How assets are transferred post-mortem is an important consideration in the estate planning process, but there are also many other aspects that should be considered. For instance, how assets or your health care will be managed and who will be responsible for these decisions if you were to become incapacitated should be taken into consideration. Using Powers of Attorneys for property and health care, creating a living will or adding guidelines in a trust can all provide additional direction. Details on personal matters such as burial wishes, care of pets or establishing a guardian for a minor child can all be addressed with a complete estate plan as well.

Regardless of net worth, deciding how you would like your assets to transfer after you pass away or having a plan for who will look after children or who will manage your assets or health care decisions if you are unable to do so are all very important decisions. The topics mentioned above only illustrate some of the considerations that should be had by all regardless of net worth and only touch the surface of estate planning. Each estate plan is as unique as the individual. With the wide range of estate planning issues and solutions, one should meet with a CERTIFIED FINACIAL PLANNERTM and an estate planning attorney to fully address all estate planning issues unique to the individual. D3 Financial Counselors can be a great resource to begin this discussion.


Brett Spencer MS, CFP®, CEPA