Category: The Wealth Advisor

Retirement is supposed to be a carefree period of enjoyment and fulfillment. However, retirement has become a daunting prospect for many Americans, full of anxiety and financial uncertainty. 

Longer lives and rising costs make the idea of retiring in one’s 60s increasingly unrealistic. But very few people, even those who enjoy working, want to work forever. At some point, we want to retire and enjoy the rewards of our labor, whether that means traveling, pursuing new hobbies, or spending more time with friends and family. 

Your goals for your retirement accounts may also extend beyond personal needs to include a comfortable future for your loved ones. Many Americans, however, have little or no retirement savings and are worried about whether they can ever afford to stop working, let alone provide for others after they pass. Some assets earmarked for retirement can also be vulnerable to lawsuits, medical bills, and other creditor claims that can quickly drain decades of careful savings. 

A holistic, integrated plan that incorporates savings, asset protection, and legacy gifting can help ease your retirement concerns and provide peace of mind for you and those you care about. 

How Much Is Needed for Retirement? 

Americans are worried about their financial futures, and for good reason. 

According to a 2025 Northwestern Mutual study, Americans believe they will need $1.26 million to retire comfortably.¹ However, that same study exposes a stark reality: this “magic number” is far beyond what many have actually saved for retirement.² More than half of Americans say that outliving their life savings is a real possibility, and the vast majority are living with financial anxiety.³ 

An analysis of eight surveys on how Americans feel about their retirement prospects reveals that their anxiety ranges from a low of 32 percent to a high of 71 percent.⁴

Such fears are well founded. A 2024 AARP report found that 20 percent of adults aged 50 and older have no retirement savings,⁵ while an Allianz Life 2024 survey found that less than half of Americans have a financial plan in place for their retirement.⁶ 

How much money you need for retirement depends on your lifestyle, location, life expectancy, and preferred retirement age. The commonly used 80 percent rule suggests replacing 80 percent of preretirement income annually. Fidelity’s guideline is to save at least 1 times your income by age 30, 3 times by age 40, 6 times by age 50, 8 times by age 60, and 10 times by age 67 (the Social Security Administration’s full retirement age for those born in or after 1960).⁷

Advisors often have their own guidelines about how much a particular person should have saved and a personalized plan for how to hit that mark. Since numbers on a spreadsheet can feel abstract and retirement goals and savings are not one-size-fits-all, talk with your advisor about their specific recommendations. 

Protecting Your Retirement Savings 

Not saving enough for retirement could make you reliant on Social Security. However, Social Security was never meant to be a full retirement plan. It typically replaces only about 40 percent of preretirement income⁸, leaving a significant gap that you will need to fill with personal savings and investments. 

Saving enough for a retirement that does not rely on Social Security is crucial, but protecting your savings is just as important. Fortunately, some retirement plans have built-in protections. For example: 

• 401(k)s and other ERISA (Employee Retirement Income Security Act)-qualified plans, such as 403(b)s and defined benefit pensions, are fully protected from creditors in bankruptcy under federal law. Outside of bankruptcy, these plans are generally shielded from creditors as well, although certain exceptions (such as Internal Revenue Service tax levies, qualified domestic relations orders (QDROs), or criminal penalties) may allow access. Once withdrawn, funds lose ERISA protection unless they are rolled over into another qualified account, such as an individual retirement account (IRA).
• In addition, many states offer automatic creditor protection for IRAs and other retirement accounts, but the protected amount and the strength of such protections vary widely by state.
• While federal bankruptcy law does not protect inherited IRAs, some states provide creditor protection for inherited retirement accounts through state exemption statutes or bankruptcy-specific rules.

Protections for You—and Your Beneficiaries

The earlier you start planning and saving for retirement and the better you protect your retirement savings, the more likely you will have money left over at the end of your life to leave a financial legacy. That legacy will be further strengthened by building protections into your estate plan that are aimed at reducing financial burdens—and concerns—for your beneficiaries. 

Here are some points to keep in mind as you build your financial and estate plans and meet with advisors: 

• Inherited retirement accounts are not as well protected as when they were in the hands of the original owner, especially since new rules require most nonspouse beneficiaries to withdraw all the money within five or 10 years, making the funds more vulnerable to taxes and creditors.
• Some states protect inherited IRAs from creditors, but many do not. At the federal level, traditional and Roth IRAs are protected from bankruptcy up to $1,711,975 (as of 2025).⁹ In addition, these protections apply only if the assets remain within the IRA and are not withdrawn.
• Naming a properly structured trust as your retirement account’s beneficiary can help shield the money from lawsuits, divorce, or bad financial decisions by loved ones. Work with an experienced estate planning attorney to ensure that the trust is correctly drafted to achieve these protections. 
• Keep your beneficiary forms up-to-date to ensure that your money goes where you want it to, avoids probate, and stays protected from legal disputes caused by outdated or unclear paperwork.

The best remedy for retirement-related financial fears is a strong plan that considers known risks and has the flexibility to take on unforeseen and unexpected changes to your savings. We all have different plans for retirement and for reaching retirement readiness. Working with an advisor can turn uncertainty into clarity, helping you build a retirement plan that not only grows your savings but also protects them for you and your loved ones. To review or put a plan in place, call us.

1. Americans Believe They Will Need $1.26 Million to Retire Comfortably According to Northwest Mut. 2025 Planning & Progress Study, Northwestern Mutual (Apr. 15, 2025), https://news.northwesternmutual.com/2025-04-14-Americans-Believe-They-Will-Need-1-26-Million-to-Retire-Comfortably-According-to-Northwestern-Mutual-2025-Planning-Progress-Study. ↩︎
2. Id. ↩︎
3. Id. ↩︎
4. Teresa Ghilarducci, Karthik Manickam, How Americans Feel About Their Retirement Prospects: Surveying the Surveys, The New School: Schwartz Center for Economic Policy Analysis (Jul. 3, 2025), https://www.economicpolicyresearch.org/resource-library/how-americans-feel-about-their-retirement-prospects-surveying-the-surveys. ↩︎
5. New AARP Survey: 1 in 5 Americans Ages 50+ Have No Retirement Savings and Over Half Worry They Will Not Have Enough to Last in Retirement, AARP (Apr. 24, 2024), https://press.aarp.org/2024-4-24-New-AARP-Survey-1-in-5-Americans-Ages-50-Have-No-Retirement-Savings. ↩︎
6. Americans Lack Plans for Retirement Income, Allianz (Oct. 29, 2024), https://www.allianzlife.com/about/newsroom/2024-Press-Releases/Americans-Lack-Plans-for-Retirement-Income. ↩︎
7. How much do I need to retire? Fidelity (Feb. 14, 2025), https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire. ↩︎
8. Retirement Ready: Fact Sheet for Workers Ages 61–69, https://www.ssa.gov/myaccount/assets/materials/workers-61-69.pdf. ↩︎
9. IRA Bankruptcy Exemption Increases, Ascensus, (Apr. 11, 2025), https://www.ascensus.com/industry-regulatory-news/news-articles/ira-bankruptcy-exemption-increases. ↩︎

There are more ways to create wealth today than ever before. Whether you are working a traditional nine-to-five job and investing in the stock market, a full-time investor taking advantage of online trading platforms and international markets, running an online business that you hope becomes your main income source, or a serial entrepreneur, the landscape of opportunity has never been broader—or more accessible.

But it is not just the prospects for wealth creation that have multiplied. Threats to personal wealth have also increased, from economic volatility and regulatory oversight to business disputes, professional malpractice claims, and divorce. The same online side hustle that supplements your earnings might expose customer data to cybercriminals, leading to a data breach lawsuit that threatens everything you own.

However you make money, you undoubtedly want to hold onto as much of it as possible. And that requires strategic long-term planning. One potential asset protection strategy involves using a domestic asset protection trust (DAPT)—a type of irrevocable trust designed to strategically shield wealth within US borders. 

How DAPTs Work

DAPTs came about in the late 1990s as a US-based alternative to offshore trusts traditionally used in jurisdictions such as the Cook Islands. Alaska pioneered the first DAPT statute in 1997,¹ and DAPTs are currently offered in more than 20 states.² However, state laws regarding DAPTS do not offer equally strong protection. 

Here is an illustration of how DAPTs are set up and intended to function: 

• Sarah owns a small business. Although her company is thriving, she knows there is an inherent risk of potential future lawsuits. To protect a portion of her personal wealth, she establishes a DAPT in her home state of Nevada, a state with DAPT legislation.
• As the grantor, Sarah transfers assets of investment accounts and real estate into the trust. She appoints a trustee to manage the trust. The trust document names beneficiaries, including Sarah, her children, and other family members.
• The trust gives the trustee discretionary authority to distribute income and principal to the beneficiaries, including Sarah. This means that Sarah, as a potential beneficiary, does not have a guaranteed right to the trust’s assets, making it more difficult for her future creditors to access them directly because technically, the trust—not Sarah—owns the assets. 

Nevada state law permits DAPTs, and, provided certain conditions are met (e.g., the transfer of assets was not done when Sarah knew of actual or potential creditors that might bring a claim against her), these assets within the trust may be shielded from claims by Sarah’s future creditors after a certain statutory period has passed.

For example, a few years after setting up her DAPT, Sarah’s small business faces a lawsuit over a contract dispute. The plaintiff attempts to seize her assets, but because Sarah’s investment accounts and real estate are in her Nevada DAPT, they are beyond the plaintiff’s reach. In other words, in the eyes of the court, Sarah is not the legal “owner” of the assets; the trust is. The court upholds the trust’s protections, shielding Sarah’s wealth from the claim. 

The push-pull between control and protection is a major factor in determining whether a DAPT’s protections can withstand court scrutiny. Generally, the more control you (the grantor) retain over the trust, such as mandating distributions to yourself or having the ability to remove and replace a trustee, the weaker the asset protection. Conversely, surrendering more control—such as giving an independent trustee full discretion over distributions—enhances the trust’s independence and ability to shield assets.

Warnings, Caveats, and State Nuances: When a DAPT Might Not Work

While DAPTs offer strong asset protection, they are not foolproof. They can falter for reasons such as: 

• Timing. Assets must be transferred to the DAPT before a creditor’s claim arises. Transfers made after a lawsuit or debt is known may be deemed fraudulent and reversed by a court. 
• State law variations. Not all states recognize DAPTs, and non-DAPT states may challenge their validity in court, especially if the grantor resides outside the trust’s state. 
• Federal claims. DAPTs may not protect against federal claims, such as Internal Revenue Service (IRS) tax liens or bankruptcy proceedings. 
• Setup and compliance. A poorly structured DAPT or a DAPT’s noncompliance with state law can leave assets vulnerable. DAPTs require strict adherence to state-specific rules, such as appointing an independent trustee and avoiding impermissible control by the grantor. 
• Evolving case law. The legal landscape surrounding DAPTs is still developing as courts continue to interpret their scope and limitations. A lack of extensive precedent can create uncertainty. 

In light of these limitations, let’s revisit the example of the small business owner, Sarah, and how a DAPT could come up short. 

Sarah’s business faces a lawsuit, and she transfers many of her personal assets into the DAPT just days before the legal claim is filed. The plaintiff challenges the transfer, claiming it was made to evade legitimate creditors. The court finds that the transfer was fraudulent under Nevada’s DAPT laws. As a result, the assets are not protected, and Sarah’s trust assets are accessible to satisfy a resulting judgment.

Another situation where Sarah’s Nevada DAPT may not provide the anticipated protection is if she moves to a state that does not recognize the Nevada DAPT. If a creditor brings a claim in her new state of residence, that state’s courts may apply local public policy and decline to honor Nevada’s asset protection laws. As a result, the court could allow the creditor to reach assets held in the DAPT, despite the trust’s protections under Nevada law.

Additional Considerations and Complementary Strategies

A DAPT might be right for you if any of the following applies: 

• You have significant assets and high liability exposure
• You are an influencer, executive, public figure, or someone with a highly public profile 
• You own a business or are a professional such as a doctor, lawyer, accountant, real estate developer, or broker, who works in a field with a high rate of malpractice claims 
• You are worried about divorce 
• You have concerns about future unknown liabilities 
• You have sufficient assets to put away in a trust to which you will have limited access

In addition to shielding assets from future creditors, DAPTs can help avoid probate and may, in limited cases, contribute to estate tax planning—particularly when designed to remove assets from the grantor’s taxable estate. Such benefits make DAPTs a strong complement to your overall financial and estate plans. 

However, DAPTs are not a one-size-fits-all solution. Their setup and ongoing maintenance fees should be part of your cost-benefit analysis. Their protection is also not guaranteed and could be subject to legal challenges. You need to be transparent about what you own and the potential liabilities you face when establishing a DAPT and must relinquish direct control over trust assets, which could hamper your financial flexibility.

A DAPT is often most powerful within a broader asset protection framework that may also include strategic titling of assets; utilizing state-specific exemptions for certain types of assets (e.g., retirement accounts or homesteads); optimizing insurance coverage; business entity structuring; and other types of trusts such as a spousal lifetime access trust (SLAT) or a qualified personal residence trust (QPRT). 

To explore how a DAPT can be strategically integrated into your financial and estate plans in conjunction with these and other wealth protection strategies, schedule a time to talk. 

1. Alexander A. Bove, Jr,.ed., Domestic Asset Protection Trusts: A Practice and Resource Manual, ABA, https://www.americanbar.org/products/inv/book/415567501. ↩︎
2. Brandon Roe, What’s the Best State for a Domestic Asset Protection Trust?, Nestmann (Apr. 28, 2025), https://www.nestmann.com/domestic-asset-protection-trust-states.  ↩︎

Remember Your First Line of Defense: Insurance

The modern insurance market dates to seventeenth-century London, where merchants reeling from the Great Fire of London started pooling funds to cover fire losses. Today, this same basic concept—pooling risk to protect individuals and businesses from catastrophic loss—underpins nearly every sector of the global economy. The US insurance market, the largest in the world, is worth an estimated $1.7 trillion and underwrites risks that could otherwise devastate individuals, homes, and businesses.¹ 

Recent shifts in the insurance market have led to many people paying more and getting less from their insurance policies. However, amid these frustrations, it is important to remember that insurance remains your first defense for protecting your wealth and legacy.

Homeowner’s Insurance: Protecting Your Biggest Asset

According to a recent study from ValuePenguin, two-thirds of homeowners say their rates went up in 2024, and 25 percent received nonrenewal notices.² Half of homeowners worry that their homes will become uninsurable, and almost a quarter of policyholders are questioning whether home insurance is even worth the expense³ as customer satisfaction with homeowners insurance reached a seven-year low in 2024.⁴ Although these numbers sound discouraging, going without homeowner’s insurance, or not having enough insurance, could be an unrecoverable mistake. For most Americans, their home is their largest asset. If you own a home, you need to review your policy limits, explore bundling options, compare quotes for optimal value and protection, and update coverage to match rising rebuild costs.

• What it typically covers: Home insurance typically covers repairs or rebuilding after fires, storms, vandalism, or theft; personal property (furniture, electronics); liability for injuries on your property; and temporary living expenses if you are displaced. Floods and earthquakes require separate policies.
• How much coverage you need: You need enough to rebuild at today’s costs, which are up significantly. You will also need personal property coverage and liability coverage. You will likely need a policy rider if you have high-value items (jewelry, art, etc.). 
• How homeowner’s insurance impacts your estate plan: Because your home may be one of your most valuable things, it is important to protect it. As premiums rise, you may be tempted to reduce coverage, but doing so could jeopardize what you leave behind for your loved ones.

Renter’s Insurance: Affordable Protection for Your Belongings

Renting is increasingly more affordable than buying a home. Nationally, the average mortgage payment costs 38 percent more per month than the average rent.⁵ Many people, including a growing share of wealthy Americans, are choosing to rent rather than buy in the current market. ⁶Renter’s insurance is highly affordable, costing around $15 to $25 monthly, but only 37 percent of renters have it.⁷ 

• What it typically covers: Renter’s insurance typically covers personal property (electronics, clothing, furniture) against theft, fire, or water damage; liability within the rented space; and temporary living expenses if you are displaced. Jewelry, collectibles, and other high-value items are often capped without riders. Standard renter’s insurance policies may have limitations or exclusions regarding at-home business-related activities, necessitating a separate business insurance policy. 
• How much coverage you need: To determine how much coverage you need, estimate your belongings’ value and replacement cost. Creating a photo inventory of your items can be helpful. You should also include liability coverage, which can be used for expenses such as medical bills, legal fees, or damages. High-value items such as laptops and bicycles may require extra coverage.
• How renter’s insurance impacts your estate plan: Even if you do not own a home but rent instead, you probably have stuff worth protecting. Personal property, from heirlooms to technology, can comprise a large part of what you own. 

Do not assume that your landlord’s policy will cover you or your possessions. Finances might be tight, but skimping on insurance could be costlier: the average claim for loss due to theft and burglary is approximately $3,000,⁸ about 20 times higher than the average annual premium.⁹ And if the law where you live does not require renter’s insurance, your landlord might. 

Car Insurance: Your Roadside Safeguard

Every state except New Hampshire mandates car insurance. Premiums jumped 7.5 percent in 2025, on top of a 16.5 percent increase in 2024.¹⁰ Higher rates mean that more drivers are choosing to drive uninsured, leading to higher risks and premiums for everyone.¹¹ 

• What it typically covers: Car insurance typically covers liability for injuries and property damage you cause; collision insurance covers accident repairs; comprehensive insurance covers theft, vandalism, or flood damage; and medical coverage pays for injuries. Uninsured motorist coverage may protect against hit-and-runs, and underinsured motorist coverage may kick in when the at-fault driver’s insurance is insufficient to cover your losses. 
• How much coverage you need: Beyond state minimums, it is important to have adequate coverage for liability, comprehensive, collision, and medical payments. 
• How car insurance impacts your estate plan: Whether gifted or sold, vehicles can be valuable items. Some may be worth even more than real estate. Adequate car insurance can protect the value of what you leave behind from liability claims arising from accidents that occur before your affairs have been wound up. Potential lawsuits can deplete the money and property intended for your beneficiaries. Your estate’s personal representatives, executors, and successor trustees should act quickly to confirm coverage and discuss how to maintain protection during administration.

Umbrella Policy: Your Extra Layer of Protection

Umbrella policies can offer around $1 million in added protection for about $200 annually.¹² In an increasingly litigious society, the risk of facing a substantial lawsuit should not be underestimated. Verdicts in personal injury lawsuits can easily exceed standard homeowner’s, renter’s, or auto insurance limits. 

• What it typically covers: An umbrella policy covers extra liability beyond home, auto, or renter’s policies, including lawsuits from accidents, property damage, or defamation. It kicks in after primary insurance limits have been exhausted.
• How much coverage you need: The amount of coverage you need will be based on the reason you need the umbrella policy. Some advisors believe that your umbrella policy coverage should at least match your net worth.¹³ However, this calculation should also consider your other insurance, home equity, and retirement savings. Working with an insurance agent is the best way to ensure that you are adequately protected.
• How an umbrella policy impacts your estate plan: An umbrella policy protects your accumulated hard-earned money from unforeseen legal liabilities, helping to ensure that more of your money and property will be preserved and passed on to future generations.

An umbrella policy may seem like an unnecessary added expense at a time when your regular insurance policies are already going up in price, but it is a relatively low-cost hedge against a large liability claim that could wreak havoc on your finances and estate plan. Umbrella policies can be particularly valuable for those with significant assets or multiple properties; landlords of rental properties; or people with high-risk lifestyles (e.g., pet owners or event hosts); as well as professionals, such as doctors, who face litigation risks. 

Business Insurance: Safeguarding Your Livelihood

Research shows that 75 percent of small businesses are underinsured, ¹⁴leaving them vulnerable to risks such as property damage, lawsuits, and cyberattacks, which increasingly target small businesses. Commercial clients also face higher premiums and tougher underwriting across general liability, property, and cyber policies, often with new exclusions and longer claim processing times.

• What it typically covers: Business insurance includes general liability for customer injuries and property damage; property insurance for buildings and equipment; professional liability for service errors; business interruption for lost income; and cyber insurance for data breaches. Also, workers’ compensation is required for employees.
• How much coverage you need: This amount depends on several factors, including the type of coverage you need (business owner’s policy, general liability insurance, workers’ compensation insurance, and professional liability insurance); the type of industry you are in; your organization’s size; the number of employees you have; general industry risk; and your business’s location.¹⁵ Also, keep in mind that home-based business owners who rent might need business insurance.
• How business insurance impacts your estate plan: Insurance can play a key role in your estate plan and succession planning, helping preserve the business’s value against losses and protect your loved ones’ financial interests. 

Ensure That You Are Properly Insured

Insurance can be overlooked until it is needed most. Instead of viewing insurance purely as a cost, try to reframe it as an investment—not necessarily in the traditional “market return” sense, but as one that manages risks and supports your long-term financial and estate planning goals. 

Despite all its flaws, insurance is the foundation of our modern economy and your personal wealth. It enables homeownership by backing mortgages, fuels business growth by mitigating risks, and protects your estate from disasters or lawsuits. 

Today, the typical American faces more-complex and higher-stakes risks, making thoughtful, tailored insurance coverage a must. To explore ways to navigate the challenging insurance market, reach out and schedule a time to talk. 

1. Marcus Lu, Visualizing America’s $1.7 Trillion Insurance Industry, Visual Capitalist (Jan. 13, 2025), https://www.visualcapitalist.com/visualizing-americas-1-7-trillion-insurance-industry. ↩︎
2. Sarah Fisher, Half of Home Insurance Policyholders Worry Their Homes Will Become Uninsurable, ValuePenguin (Mar. 31, 2025), https://www.valuepenguin.com/uninsurable-worries-survey. ↩︎
3. Id. ↩︎
4. Customer Satisfaction with Homeowners Insurance Property Claims Declines to 7-Year Low Amid Record Catastrophic Events and Slower-Than-Ever Repair Times, J.D. Power Finds, J.D. Power (Mar. 19, 2024), https://www.jdpower.com/business/press-releases/2024-us-property-claims-satisfaction-study. ↩︎
5. Alex Gailey, Study: Renting is increasingly more affordable than buying in most large U.S. metros, Bankrate (Apr. 23, 2025), https://www.bankrate.com/real-estate/rent-vs-buy-affordability-study. ↩︎
6. Lisa Riley Roche, Is renting rather than buying housing becoming more attractive to the wealthy? What a new analysis says, Deseret News (Mar. 11, 2025), https://www.deseret.com/utah/2025/03/11/are-more-wealthy-american-renting-rather-than-buying-a-home-what-a-new-analysis-found. ↩︎
7. Renting Statistics, The Zebra (Nov. 18, 2024), https://www.thezebra.com/resources/research/renting-statistics. ↩︎
8. Jessica Humeck, Renters Insurance Claims, Trusted Choice (Mar. 2, 2020), https://www.trustedchoice.com/renters-insurance/coverage-claims. ↩︎
9. Sarah Schlichter, The Average Renters Insurance Cost, Nerdwallet (Jan. 2, 2024), https://www.nerdwallet.com/article/insurance/how-much-is-renters-insurance. ↩︎
10. 2025 State of Auto Insurance: Rate Increases Are Slowing Down in 2025, PRNewswire (Jan. 7, 2025), https://www.prnewswire.com/news-releases/2025-state-of-auto-insurance-rate-increases-are-slowing-down-in-2025-302344613.html. ↩︎
11. Lonalyn Cueto, Rising number of uninsured drivers increases auto insurance costs, report warns, InsuranceBusiness (Mar. 28, 2025), https://www.insurancebusinessmag.com/us/news/auto-motor/rising-number-of-uninsured-drivers-increases-auto-insurance-costs-report-warns-530170.aspx. ↩︎
12. Sarah Schlichter, What Is Umbrella Insurance, and How Does It Work?, Nerdwallet (Jan. 2, 2025) https://www.nerdwallet.com/article/insurance/umbrella-insurance. ↩︎
13. How Much Umbrella Insurance Do I Need? Ramsey (May 1, 2025) https://www.ramseysolutions.com/insurance/how-much-umbrella-insurance-do-I-need. ↩︎
14. 75% of Small Businesses Are Underinsured, Says Hiscox Survey, Ins. J. (Oct. 11, 2023), https://www.insurancejournal.com/news/national/2023/10/11/743586.htm. ↩︎
15. How Much Does Small Business Insurance Cost?, The Hartford (Apr. 9, 2025), https://www.thehartford.com/business-insurance/how-much-business-insurance-cost. ↩︎

No matter the time of year, taxes are always a hot topic. While we usually think about taxes in terms of how they affect us today, it can be equally important to understand the history of tax laws that can impact your estate plan.

The Estate and Gift Tax  

Taxation of property transfers at death dates as far back as 700 BCE in ancient Egypt. It was also used in Rome and feudal Europe. 

The United States estate tax was introduced in 1916.¹ Estate and gift taxes play a significant role in individual estate planning, but their contribution to the overall federal budget is relatively small, typically accounting for approximately 1 percent of total federal revenue.² In 2023, it was estimated that only around 0.14 percent of estates were taxable.³

The federal estate tax was advocated by progressive reformers during a time of great wealth concentration and inequality (think Gilded Age figures like Carnegie and Rockefeller).⁴ An initial exemption, or exclusion amount, of $50,000 was allowed.⁵ 

In the decades since the estate tax’s inception, Congress has made additions and revisions to its structure. These changes include a tax on so-called inter vivos, or lifetime, gifts in 1932 to prevent wealthy taxpayers from circumventing the estate tax by gifting assets during their lifetime; a marital deduction introduced in 1948 that allows tax-free transfers to qualifying surviving spouses; and the 1976 Tax Reform Act, which created a unified estate and gift tax exemption.⁶ 

Over the years, the estate tax exemption amount increased from $50,000 in 1916 to $2 million in 2006⁷ to $5.49 million in 2017—the year before the Tax Cuts and Jobs Act (TCJA) went into effect. ⁸The annual gift tax exclusion has increased as well, from $3,000 per individual in 1976 to $12,000 in 2006⁹ to $14,000 in 2017.¹⁰ 

Today, thanks to the TCJA, the estate and gift tax unified exemption is at an all-time high. The lifetime exclusion is currently $13.99 million for individuals and $27.98 million for married couples,¹¹ while the annual gift tax exclusion is $19,000 per person and $38,000 for married couples.¹² Taxes on generation-skipping transfers match the estate tax exemption. 

However, these allowances are set to revert to the much lower pre-TCJA levels in 2026 unless Congress acts to extend or modify them. 

The Income Tax 

While not a direct tax on estates, the income tax has ramifications throughout the estate planning process, from the taxation of estate assets and trusts to beneficiary taxes, capital gains, and charitable contributions.

The US did not have a permanent federal income tax until 1913¹³—more than a century after Benjamin Franklin’s famous “death and taxes” quip. That was the year the Sixteenth Amendment was passed, giving Congress the authority to levy taxes on corporate and individual income. Today, income tax revenue makes up nearly half of all federal revenue and is the largest source of government funding.¹⁴

Income taxes are not quite as inevitable as Franklin would have us believe. Tens of millions of Americans owe little or no federal income tax each year.¹⁵ 

Like the estate tax, the income tax has its roots in war efforts and a Progressive Era push for wealthy individuals to pay taxes and tariffs.¹⁶ Rates started at 1–7 percent on incomes above $3,000.¹⁷ Top rates soared during World War I and World War II and peaked at 94 percent for top taxpayers in 1944,¹⁸ the year Congress created the standard deduction.¹⁹

Other key changes to the federal income tax over the years include the earned income tax credit in 1975;²⁰ the 1986 Tax Reform Act that simplified and restructured the tax code and dropped the top rate to 28 percent;²¹ the American Taxpayer Relief Act of 2012, which set the top rate at 39.6 percent post-recession;²² and 2017’s TCJA. 

The TCJA temporarily dropped tax rates across seven brackets and permanently lowered the corporate tax rate. It also increased the standard deduction and the child tax credit, capped state and local tax deductions, added deductions for pass-through income and business deductions, and nearly doubled the estate tax exemption.²³ 

Navigating an Uncertain Tax Future

In a spring survey, voters said by a nearly three-to-one margin that they favor permanently extending the TCJA.²⁴ President Trump and Republicans in Congress are also pushing for TCJA extensions. 

If Congress acts at all, it may postpone TCJA extensions, either short-term or long-term, until the last few weeks or even days or hours of this year. Historically, major tax bills in a new administration’s first year (e.g., the TCJA in December 2017) often land in the fall, or lame-duck, session.²⁵ President Trump did not sign the TCJA into law until three days before Christmas 2017. 

Congress may wait until the eleventh hour to act, but you do not have to. You can work with an estate planning attorney on contingency plans that account for different scenarios, including the estate tax exemption and individual tax rates remaining at current levels or reverting to pre-TCJA levels.Potential strategies include shifting 2026 income into 2025, prepaying expenses, contributing to tax-advantaged accounts, using the bonus depreciation and qualified business income (QBI) deductions, gifting assets, and creating and funding irrevocable trusts. 

Changes to your estate plan can take weeks or months to implement. Delaying action on your plan could put you at a disadvantage if you are caught unprepared for what Congress does or does not do. Changes do not have to be permanent. Some can be a temporary hedge, while other proactive measures may prove to be prescient.

To talk about specific tax policies and how they might affect your estate plan, please contact us. 

1. Darien B. Jacobson et al., The Estate Tax: Ninety Years and Counting, 27 Stats. of Income Bull., no. 1, Summer 2007, at 118, https://www.irs.gov/pub/irs-soi/ninetyestate.pdf. ↩︎
2. U.S. Dep’t of the Treasury, Bureau of the Fiscal Serv., How Much Revenue Has the U.S. Government Collected This Year?, Fiscal Data, https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue (last visited Apr. 21, 2025).  ↩︎
3. How Many People Pay the Estate Tax?, Tax Pol’y Ctr. (Jan. 2024), https://taxpolicycenter.org/briefing-book/how-many-people-pay-estate-tax.  ↩︎
4. Chuck Collins, Long Live the Estate Tax, U.S. News & World Rep. (Sept. 8, 2016), https://www.usnews.com/opinion/articles/2016-09-08/americas-second-best-idea-the-estate-tax.  ↩︎
5. Jacobson et al., supra note 17, at 120. ↩︎
6. Id. at 121. ↩︎
7. Federal Estate and Gift Tax Rates, Exemptions, and Exclusions, 1916–2014, Tax Found. (Feb. 4, 2014), https://taxfoundation.org/data/all/federal/federal-estate-and-gift-tax-rates-exemptions-and-exclusions-1916-2014.  ↩︎
8. Estate Tax, IRS (Oct. 29, 2024), https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax.  ↩︎
9. Federal Estate and Gift Tax Rates, Exemptions, and Exclusions, 1916–2014, supra note 23 ↩︎
10. Frequently Asked Questions on Gift Taxes, IRS (Oct. 29, 2024), https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes.  ↩︎
11. IRS Releases Tax Inflation Adjustments for Tax Year 2025, IRS (Oct. 22, 2024), https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025.  ↩︎
12. Id. ↩︎
13. Historical Highlights of the IRS, IRS (Sept. 13, 2024), https://www.irs.gov/newsroom/historical-highlights-of-the-irs.  ↩︎
14. U.S. Dep’t of the Treasury, Bureau of the Fiscal Serv., How Much Revenue Has the U.S. Government Collected This Year?, Fiscal Data, https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue (last visited Apr. 21, 2025). ↩︎
15. Drew Desilver, Who Pays, and Doesn’t Pay, Federal Income Taxes in the U.S.?, Pew Rsch. Ctr. (Apr. 18, 2023), https://www.pewresearch.org/short-reads/2023/04/18/who-pays-and-doesnt-pay-federal-income-taxes-in-the-us. ↩︎
16. Constitutional Amendments — Amendment 16 — “Income Taxes,” Ronald Reagan Presidential Libr. & Museum, https://www.reaganlibrary.gov/constitutional-amendments-amendment-16-income-taxes (last visited Apr. 21, 2025). ↩︎
17. Historical Highlights of the IRS, supra note 29. ↩︎
18. Mark Luscombe, Historical Income Tax Rates, Wolters Kluwer (Dec. 30, 2022), https://www.wolterskluwer.com/en/expert-insights/whole-ball-of-tax-historical-income-tax-rates.  ↩︎
19. Historical Highlights of the IRS, supra note 29.  ↩︎
20. Margot L. Crandall-Hollick, The Earned Income Tax Credit (EITC): Legislative History, Congress.gov (Apr. 28, 2022), https://www.congress.gov/crs-product/R44825.  ↩︎
21. Julia Kagan, Tax Reform Act of 1986: Overview and History, Investopedia (Nov. 3, 2024), https://www.investopedia.com/terms/t/taxreformact1986.asp.  ↩︎
22. Pub. L. 112–240, 126 Stat. 2313 (codified in scattered sections in 26 U.S.C.), https://www.congress.gov/bill/112th-congress/house-bill/8.  ↩︎
23. David Floyd, What Is the Tax Cuts and Jobs Act (TCJA)?,  Investopedia (Jan. 31, 2025), https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained.  ↩︎
24. Ashlee Rich Stephenson, American Voters Will Support Lawmakers Who Back Permanent Tax Relief, U.S. Chamber of Com. (Mar. 4, 2025), https://www.uschamber.com/taxes/american-voters-will-support-lawmakers-who-back-permanent-tax-relief.  ↩︎
25. Gabriella Sanchez, What Happens in a Lame-Duck Session of Congress?, Brennan Ctr. for Just. (Dec. 19, 2022), https://www.brennancenter.org/our-work/research-reports/what-happens-lame-duck-session-congress.    ↩︎

What comes to mind when you think of spring? 

Maybe it is blooming flowers, buzzing insects, singing birds, or the fresh smell of the earth after a rain. Your thoughts might turn to outdoor pursuits as the days grow warmer and longer. Memorial Day is not far off, marking the unofficial start of summer. Soon, the summer solstice will arrive, followed by the Fourth of July, the kids going back to school, and Labor Day. 

Before lamenting how quickly the time has passed and what you never got around to doing, it can be helpful for your personal, professional, and financial well-being to step back and give some thought and energy to reevaluating your goals and priorities for the next 100 days. 

Spring is an opportune season for housekeeping, both literally and metaphorically. It is time to throw open the windows of your life, let in the fresh air, and catch up on the small chores that often get pushed aside amid modern life’s frenetic pace—including dusting off your estate plan, clearing away outdated documents, and tidying up your financial house.

Goodbye Winter, Hello Spring (Cleaning) 

According to the American Cleaning Institute (ACI), 80 percent of Americans engage in an annual spring-cleaning routine.¹ The top areas people target in their homes are those that tend to get overlooked in daily and weekly cleaning, including floors and baseboards, storage spaces, windows, and areas behind furniture.² 

Atop our list of dreaded places to clean are the spaces that are hard to access (such as underneath appliances) and have accumulated a winter’s worth of grime (e.g., bathrooms, vents, and basements). However, 80 percent of Americans also told ACI that cleaning those filthy spots is better than at least one other seasonal activity: doing their taxes.³ 

Spring cleaning has roots in cultures and religious traditions that date back centuries, including the Jewish practice of cleaning homes to remove chametz (leavened bread) for Passover and the Iranian tradition of khaneh tekani (“shaking the house”) before the Persian New Year.

Some Christian traditions, such as cleaning the church altar before Good Friday or cleaning for Lent, also have elements of spring cleaning. In China, a thorough cleaning of the house before the Lunar New Year is a tradition that incorporates religious practices and symbolizes sweeping away ill fortune to make room for positive energy in the coming year. 

In nineteenth-century America, the custom of spring cleaning took hold as pioneers swept out the soot and grime from winter’s coal once warmer days allowed open windows.

A spotless house can have a therapeutic effect that gives you a sense of control and the peace of mind that your family is living in a clean, safe environment. The same thinking can also apply to your estate plan. 

In a recent survey, nearly one-quarter of Americans said that they have not updated their estate plan since creating it.⁴ Others have not touched it in the past 10 years and, for some, it has been 15 years or more.⁵

Like those spots under the couch and behind the refrigerator, your estate plan, if left untouched in a drawer, can gather dust. You need to occasionally take it out and clear away outdated beneficiaries, guardians, and powers of attorney; spruce up your list of assets; and scrub clean the dingy aspects of your plan so they clearly reflect your current life circumstances. 

For example, maybe you recently opened an investment account that has not been added to your estate plan. There could also be events, such as a birth, death, or marriage in the family, that affect your plan. If you do not polish up your plan once in a while, you risk a stain on your legacy by not leaving your money and property to the right people in the right way. 

With the dreaded tax season behind us, now is also a good time to dust off financial strategies for the year ahead, such as reviewing deductions, contributions, and estimated tax payments; organizing financial documents for the first half of the year; preparing for midyear adjustments; going over any changes to tax and estate planning laws; assessing asset allocations; and, if you filed a tax extension, preparing for the October 15 deadline. 

Shifting from Tax Breaks to Summer Break

Summer vacation is something you may look forward to year-round but start preparing for months in advance. However, if you do not give your vacation plans a once-over in the weeks and months leading up to departure, you could find that there are some spots that need a touch-up. 

Many Americans skipped their summer vacation last year due to affordability concerns.⁶ However, more than one-third were so committed to traveling over the summer that they said they were willing to go into debt to pay for their trip.⁷ 

If you plan to vacation this summer, you can get your pre-getaway ducks in a row by taking the following steps: 

• Schedule bill payments
• Inform your bank and credit card companies about your plans to avoid account freezes or card blocks
• Secure travel documents (e.g., passports and insurance cards)
• Check local laws at your destination to avoid legal, cultural, and safety and security issues
• Ensure that your financial and healthcare powers of attorney are valid, accurate, and, for international travel, recognized in the country you plan to visit

An Estate Plan for All Seasons

Aligning our personal and professional lives with the natural rhythm of the seasons and the rituals surrounding it can help us feel more grounded. Viewed in this context, estate planning is not just about documents—it reflects the dynamic, ever-changing flux of life and the need to harmonize with it. 

Seasons change, lives change, and estate plans should change as we encounter certain natural milestones and key life events, such as birth or adoption; a beneficiary reaching adulthood; illness, death, or disability in the family; starting a job or closing a business; or a significant change in asset values or net worth. 

Life, like spring weather, can be unpredictable and change quickly. However, with the right plan and the right advisors in place, you can be prepared for whichever way the wind blows.

As you look ahead to the next 100 days, take time this spring to remove the cobwebs from your estate plan, sweep your financial floors clean, and clear the decks for a stress-free and enjoyable summer.

To discuss updates to your estate plan, call us.

1. Are You Ready to Clean Behind the Couch? Americans List Their Spring Cleaning Targets, Am. Cleaning Inst. (Mar. 4, 2025), https://www.cleaninginstitute.org/newsroom/2025/are-you-ready-clean-behind-couch-americans-list-their-spring-cleaning-targets.  ↩︎
2. Id. ↩︎
3. ACI Survey: 80% of Americans Now Spring Clean Every Year, ACI (Mar. 6, 2024), https://www.cleaninginstitute.org/newsroom/2024/aci-survey-80-americans-now-spring-clean-every-year.  ↩︎
4. Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Mar. 31, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey.  ↩︎
5. Id. ↩︎
6. Katie Kelton, Survey: More Than 1 in 3 American Travelers Plan to Go into Debt for Their Summer Vacations This Year, Bankrate (Apr. 22, 2024), https://www.bankrate.com/credit-cards/news/survey-summer-vacation ↩︎
7. Id. ↩︎

President Trump’s First 100 Days in Office

President Trump entered office having won the electoral college and with relatively strong approval ratings. On his first day in office, he issued over 25 executive orders, and in his first 30 days, he issued more than 70,¹ seeking to make good on his promises to transform the federal government, ignite an economic boom, and revive the American Dream.² 

The Trump administration has been unable to produce much in the way of legislation, however; the president has run into political and economic realities that have slowed his momentum and made it harder to deliver on his promises, some of which could impact your estate planning and financial decisions. 

Estate, Tax, and Wealth Planning Implications of Trump’s Actions

Despite the many uncertainties facing Trump’s agenda, his administration has strongly signaled that tax-related measures are a top priority. 

Trump and Republicans want to extend many provisions from the expiring Tax Cuts and Jobs Act (TCJA) that the president signed into law in his first term.³ There could also be new tax cuts, such as Trump’s proposal to eliminate taxes on tips, overtime pay, and Social Security benefits.⁴ 

Here are some of Trump’s and the GOP’s reported tax priorities for their economic package: 

• Estate and gift tax. The TCJA doubled the estate and gift tax exemption to historically high levels that are set to expire in 2026. Senate majority leader John Thune introduced a bill in February to repeal the estate tax, sometimes referred to as the death tax.⁵ Further, a full repeal of the estate tax is reportedly part of the tax bill negotiations.⁶ Another option on the table is to extend the current exemption rather than repealing it outright. 
• Individual and business tax cuts. The TCJA also included several provisions that benefit businesses and individual taxpayers, including pass-through income deduction, business expense deductions, changes to income tax brackets, mortgage interest and charitable donation deductions, an increased standard deduction, and additional tax relief via the Child Tax Credit. Extending the TCJA would likely keep these tax benefits in place.
• State and local tax (SALT) deductions. The administration is considering removing or increasing the current $10,000 cap on SALT deductions imposed by the TCJA.⁷ This change would benefit taxpayers in states with high property and income taxes, allowing greater federal tax deductions.
• Closing the carried interest loophole. Trump has stated his intention to close the carried interest loophole that allows investment managers of private equity and hedge funds to benefit from reduced capital gains tax rates on carried interest, provided a three-year holding period is met.⁸
• Capital gains taxes. The TCJA separated tax-rate income brackets for capital gains and dividend income from the tax brackets for ordinary income. If the TCJA expires and this provision is not addressed legislatively, some taxpayers could face higher capital gains taxes in 2026. 

If you are currently affected by any of these TCJA tax laws, or if you are not sure whether they affect you, contact us so we can discuss ways to help you prepare for them ending in 2026 or being extended this year. 

For example, depending on your risk appetite and estate size, you may want to use gifting and trust-based strategies to lock in currently high exemption levels or sell some of your highly appreciated securities now to avoid potentially higher capital gains in 2026.⁹ 

Control What You Can Control

While we hope to get more legislative clarity in the next 100 days of the Trump presidency, you should focus on controlling what you can through your estate plan and aim to maintain flexibility. This includes doing things such as updating your will or trust, creating an incapacity plan, updating beneficiary designations on financial accounts and insurance policies, and talking to your attorney about ways to hedge against potential outcomes in your plan. That way, if any major policy changes that affect your finances and family do come to pass, you will be ready to make targeted adjustments. 

Maintaining flexibility and focusing on fundamentals are key during transition periods like the one we are experiencing now. For a steady and experienced hand to guide you through the transformations of Trump 2.0, reach out to our office and set up an appointment. 

1. 2025 Donald J. Trump Executive Orders, Fed. Reg.: Executive Orders,  https://www.federalregister.gov/presidential-documents/executive-orders/donald-trump/2025 (last visited Apr. 21, 2025).  ↩︎
2. Natalie Sherman, Has Trump Promised Too Much on US Economy? BBC (Jan. 17, 2025), https://www.bbc.com/news/articles/c17d41y70deo.  ↩︎
3. Preparing for the Expiration of the TCJA in 2025, Bloomberg Tax (Mar. 28, 2025), https://pro.bloombergtax.com/insights/federal-tax/what-is-the-future-of-the-tcja/#will-the-tcja-be-extended.  ↩︎
4. Alex Isenstadt, Scoop: Trump Lays Out Tax Priorities to House GOP, Axios (Feb. 6, 2025), https://www.axios.com/2025/02/06/trump-no-tax-on-tips-social-security-overtime.  ↩︎
5. Press Release, John Thune, Thune Leads Effort to Permanently Repeal the Death Tax (Feb. 13, 2025), https://www.thune.senate.gov/public/index.cfm/2025/2/thune-leads-effort-to-permanently-repeal-the-death-tax. ↩︎
6. Kevin Frekin et al., Senate GOP Approves Framework for Trump’s Tax Breaks and Spending Cuts After Late-Night Session, AP (Apr. 5, 2025), https://apnews.com/article/senate-budget-tax-cuts-trump-485845a9c0b7dfc5d2194d4c1e4723ae.  ↩︎
7. Trump Tax Priorities Total $5 to $11 Trillion, Comm. for a Responsible Fed. Budget (Feb. 6, 2025), https://www.crfb.org/blogs/trump-tax-priorities-total-5-11-trillion.  ↩︎
8. Aimee Picchi, Trump Wants to Close the Carried Interest Tax Loophole, a Longtime Target of Democrats, CBS News (Feb. 7, 2025), https://www.cbsnews.com/news/trump-tax-taxes-carried-interest-loophole-hedge-funds.  ↩︎
9. How Did the Tax Cuts and Jobs Act Change Personal Taxes?, Tax Pol’y Ctr. (Jan. 2024), https://taxpolicycenter.org/briefing-book/how-did-tax-cuts-and-jobs-act-change-personal-taxes.  ↩︎

The term estate may bring to mind mansions, vast fortunes, and a level of wealth that many people do not possess. This misconception may lead to the false impression that estate planning is only for the rich and famous, discouraging those with more modest means from seeking professional guidance.

If estate is a loaded term, then trust is even more so. Mention the word trust,and many people think of wealthy families, complex legal arrangements, and a level of sophistication that can seem intimidating or unnecessary. 

Misconceptions about trusts often stem from a lack of understanding about what a trust actually is, how it works, and situations where it can provide benefits above and beyond a will. Wills and trusts are complementary—not mutually exclusive. They can serve different roles in an estate plan and often address different concerns. 

Trust Basics

Trusts can work in various ways depending on the type of trust and how you want to pass down your assets (accounts and property). However, every trust has some things in common. 

When you transfer assets to a trust, the trust becomes the legal owner of those assets. You are, in effect, giving up direct ownership of whatever assets you place in a trust, which can include real estate, bank and financial accounts, personal property, and even things such as life insurance proceeds and business interests. 

• As the trustmaker (sometimes called the trustor, settlor, or grantor), you create the trust and decide which asset(s) to put into it. 
• A trustee (or co-trustees) manages the trust on your beneficiaries’ behalf. Depending on the type of trust you create, you might be the initial trustee. 
• Your beneficiaries receive proceeds from the trust based on instructions you leave the trustee in the trust agreement. You can give the trustee wide discretion to manage assets or prescribe very narrow parameters. Depending on the type of trust, you might also be the beneficiary while you are alive.

Although a will can also be used to name beneficiaries to receive your assets, it takes effect only after you die. A trust, on the other hand, is effective during your lifetime, which means that a successor (backup) trustee can step in to manage your assets if you become disabled or injured—not just when you pass away, as with a will. 

People create trusts for numerous reasons. Some of the most common are the following: 

• Avoiding probate. The court process known as probate imposes additional costs, delays distributions, and is part of the public record. Assets held in a trust avoid probate. They pass directly—and, in most situations, privately—to beneficiaries according to the instructions you have included in the trust agreement. 
• Reducing estate taxes. If your net worth exceeds exemption amounts for estate and inheritance taxes, certain types of trusts can help minimize your tax liability, leaving more money to benefit your loved ones. 
• Protecting assets. Trusts can shield assets from the beneficiary’s creditors, lawsuits, and potential financial mismanagement. 
• Providing for loved ones. Trusts can ensure that loved ones, such as minor children or those with special needs, are cared for according to your wishes. 
• Managing assets during incapacity. A trust allows for the seamless management of assets if you become incapacitated (unable to manage your affairs), ensuring estate plan continuity and avoiding potential court intervention. 
• Charitable giving. Trusts can be used to support charitable causes and provide associated tax benefits. 
• Incentivizing behavior. You could structure a trust to encourage beneficiaries to achieve certain goals, such as pursuing education or maintaining employment.

Demand for trusts is increasing as Americans go through the “Great Wealth Transfer” from older generations to younger family members.¹ Ultimately, the decision to create a trust reflects a desire for greater control, protection, and flexibility in managing and passing down wealth.

Trust-Based Planning Scenarios

Understanding how trusts work can help you properly visualize how a trust might fit into your own estate plan. To further illustrate the variety of roles trusts can play in achieving your legacy goals, here are some specific examples of scenarios where trusts are commonly utilized:

• You have a high net worth (specifically, a net worth exceeding the federal estate tax exemption, or state exemption levels, which are as low as $1 million in Oregon and even lower in some states that impose an inheritance tax). If these taxes affect you, consider
  • a grantor retained annuity trust—allows you to transfer assets to beneficiaries while retaining an income stream; 
  • a charitable remainder trust—provides an income stream to beneficiaries, with the remainder going to a designated charity; or 
  • a dynasty trust—passes wealth down through multiple generations.
• You want complex distribution instructions, which could involve blended families, beneficiaries with special needs, or beneficiaries who are prone to financial mismanagement or vulnerable to creditors. These scenarios may lend themselves to
  • a spendthrift trust—protects assets from creditors and prevents beneficiaries from squandering their inheritance; 
  • a supplemental needs trust—enables a disabled beneficiary to receive financial support from the trust without affecting their eligibility for means-tested government benefits;
  • an incentive trust—makes distributions to a beneficiary dependent on their meeting certain conditions, such as graduating, becoming employed, getting sober, or volunteering for charitable causes; or 
  • a qualified terminable interest property trust—provides for a surviving spouse while ensuring that the deceased spouse’s assets ultimately pass to their chosen beneficiaries when the surviving spouse dies. 
• You are exposed to unique tax liabilities related to situations such as having extensive real estate investments or business ownership. Possible trust solutions include the following:
  • a qualified personal residence trust—allows for the transfer of a primary residence or, in some circumstances, a vacation home, to a trust while retaining the right to live in it for a set period or
  • an irrevocable life insurance trust—holds a life insurance policy that uses the death benefit proceeds to cover estate taxes or provide liquidity to a business after your death.

Estate planning attorneys often emphasize that every adult, no matter their age or wealth level, needs an estate plan. It should start with a will, but depending on your financial and family situation, a trust can be a valuable addition to your plan. 

If you think a trust may be right for you and your family but are overwhelmed by the number of options and their range of uses, set up a time to talk with us about the different trust types and the benefits they offer.

1. Ronda Lee, More Americans are dealing with tax filings for trusts as older boomers pass away, Yahoo! finance (Apr. 5, 2023), https://finance.yahoo.com/news/more-americans-are-dealing-with-tax-filings-for-trusts-as-older-boomers-pass-away-211151632.html. ↩︎

Beneficiary and Transfer-on-Death Designations: Are You Doing It Right?

Do you know which of your accounts have beneficiary designations, sometimes called transfer-on-death (TOD) or payable-on-death (POD) designations? Have you updated them recently? Are you aware of what can go wrong if there are issues with your beneficiary designation forms?

If you answered “no” to any of these questions, it may be time to review your beneficiary, TOD, and POD designations and confirm that everything is accurate, complete, and current. 

Accounts and property with beneficiary, TOD, or POD designations take precedence over your will or living trust, so keeping forms updated is crucial to ensuring that your accounts and property go quickly and seamlessly to the right people. 

Where to Find TOD, POD, and Beneficiary Designations 

Beneficiary, TOD, and POD designations are made using legal forms that specify who will receive the asset (e.g., accounts, property, death benefits, etc.) after the original owner dies. 

Such designations allow you to pass assets directly to your beneficiaries and avoid probate. Avoiding probate can reduce estate costs, ultimately leaving more money to benefit your family and loved ones, and result in faster distribution to beneficiaries. Common asset types where beneficiary designations come into play include the following: 

• retirement accounts—401(k)s, individual retirement accounts, and other retirement plans; 
• investment accounts—Brokerage accounts, stocks, bonds, and mutual funds;
• bank accounts—Checking accounts, savings accounts, and certificates of deposit; 
• life insurance policies—All types of life insurance policies, including whole, term, and group; and
• real estate—TOD deeds and similar alternatives (offered in more than half of states).

For most Americans, their home and financial accounts are the primary source of their wealth, making them central in an estate plan¹ and making it all the more important that beneficiary designations for these assets reflect your current wishes. 

What Can Go Wrong with an Incomplete, Inaccurate, or Outdated Beneficiary Form?

According to financial advisors, beneficiary form errors are among the most common—and the costliest—estate planning mistakes that people make.² These errors fall into a few main buckets:  

• Failure to name a beneficiary. Many people simply forget to complete beneficiary designation forms or put them off indefinitely. This situation is especially common for inherited accounts. 
• Outdated information. Major life events such as marriage, divorce, the birth of a child, or the death of a beneficiary necessitate updating designations.
• Inaccurate or missing information. Mistakes in spelling, addresses, or other identifying information or failure to provide complete information can cause delays, confusion, or even disputes when processing beneficiary designations. 
• Naming a minor as beneficiary. Technically, minors can be named as beneficiaries, but they cannot legally receive or manage money and property above a certain value. If they are named as beneficiaries, a court may need to appoint a guardian to oversee the funds for them until they reach the age of majority (18 years of age in some states and 21 in others).
• Overlooking complex circumstances. A beneficiary may be unable to manage their inheritance because of a disability, special needs, poor money habits, mental health issues, or substance use disorder. 
• Not naming contingent beneficiaries. If the primary beneficiary dies before the account holder or cannot be located and no contingent (backup) beneficiary has been named, it will be treated as if no beneficiary had been named.
• Lost or invalid forms. Unfortunately, financial institutions sometimes misplace beneficiary designation forms or fail to process them correctly. Also, if a financial institution or employer changes the plan’s service provider or administrator, the original beneficiary designation may no longer apply, meaning that a new beneficiary designation form needs to be completed under the new provider. 

In addition to the unintended distribution of accounts, property, or death benefits and related disputes, an invalid, missing, or outdated beneficiary designation can result in the assets requiring probate administration, possibly causing payout delays and raising estate administration costs. Also, most things that go through probate may be subject to claims from creditors, potentially reducing the amount distributed to beneficiaries. 

To emphasize how disastrous beneficiary form errors can be to an estate plan, here are some examples of how they could play out in the real world: 

• Divorce dilemma. John and Mary were married for 20 years. John had a 401(k) from his employer, with Mary listed as the sole beneficiary. They divorced, and John remarried. John passed away unexpectedly, and despite his wishes for his current wife to inherit his retirement funds, the plan administrator, bound by the beneficiary designation, paid the entire sum to his ex-wife. Not all states have revocation-upon-divorce laws, and even in states that do, there are often exceptions and specific situations where the rules do not apply.
• Forgotten children. Sarah had a life insurance policy from her early 20s naming her parents as beneficiaries. She later had two children but never updated the policy. Upon Sarah’s death, the life insurance proceeds went to her parents.
• Probate purgatory. Robert had a brokerage account but never designated a beneficiary. When he died, the account became part of his probate estate, resulting in a lengthy and expensive legal process that delayed the distribution of his money and property to his heirs. Because the assets were tied up in probate, creditors also had easier access to those funds. 
• Incapacitated beneficiary. A woman named her adult son as her sole beneficiary on her life insurance policy. Years later, her son was in a severe car accident and became mentally incapacitated. When the woman passed, there was no clear plan for how the life insurance funds should be managed for her incapacitated son, and if he was receiving needs-based benefits, those benefits could be jeopardized by his receiving the funds. 

Schedule an Estate Plan Review

A recent survey found that nearly one-fourth of Americans have not revised their estate plan since creating it. Many have also not updated it within the past 10 to 15 years.³ 

The recommended timeline for reviewing beneficiary designations is the same as for the rest of your estate plan—at least every few years or after any significant life event. During the review process, you and your attorney can dig into details such as the following: 

• Are these beneficiaries still the people you want to receive your accounts?
• Are the beneficiaries still living? 
• Are they capable of managing the inheritance? 
• Is there more than one beneficiary named, and if so, how hard is it to divide the account or property, and what is the potential for conflict between/among the beneficiaries? 
• Have you informed the beneficiaries that they are named? Do they know how to claim their inheritance? 
• Are you fine with them receiving an outright distribution, or are safeguards needed? 

When reviewing beneficiary designations, get current confirmation directly from the financial institutions to verify whom they have on record. Do not just rely on the forms you originally filled out to ensure your designations were properly processed.

Even if everything looks good after a review, for added protection and control over the inheritance in complex circumstances, you may want to name a trust as the beneficiary and allow a trustee to manage the inheritance on your loved ones’ behalf. You can also name a charity as a beneficiary. 

Avoid letting a simple clerical error derail your estate plan. Schedule an attorney review to double-check that every “i” is dotted, every “t” is crossed, and every form accurately expresses your intentions.

1. Rakesh Kochhar and Mohamad Moslimani, 4. The assets households own and the debts they carry, Pew Rsch. Ctr. (Dec. 4, 2023), https://www.pewresearch.org/2023/12/04/the-assets-households-own-and-the-debts-they-carry. ↩︎
2. Mark Henricks, Out-of-date beneficiary designations are a common and costly mistake, CNBC (Apr. 17, 2018), https://www.cnbc.com/2018/04/16/out-of-date-beneficiary-designations-are-a-common-and-costly-mistake.html. ↩︎
3. Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Feb. 18, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey. ↩︎

Is Outright Distribution the Perfect Fit for Your Loved Ones?

Although Americans are living longer and spending more time—and money—in retirement, many parents intend to leave an inheritance to their children. The exact amount can vary greatly depending on individual circumstances and wealth levels, but even a small inheritance can be meaningful and help set a child up for long-term financial success, provided they are ready to handle it, which may not be the case. 

Most families fail to discuss wealth transfers to ensure that younger generations are prepared for an inheritance. Parents need to decide how they want to pass their assets (accounts and property) to their children and other beneficiaries so they can plan the transfer in a way that fits their goals and their loved ones’ abilities to manage their inheritance. The wealth transfer process includes deciding whether to leave a loved one an outright inheritance or to pass their wealth down in a more controlled manner. 

Pros and Cons of an Outright Inheritance

Over the next 20 years, an estimated $84 trillion in assets is expected to change hands from older Americans to younger Americans in what financial experts are calling the “Great Wealth Transfer.”¹  

According to a USA Today survey, about 76 percent of Americans receiving an inheritance say they plan to save or invest it, 40 percent say they will use it to pay off debt, and 21 percent want to leave the money to their children.² 

Another survey found that, among those expecting to receive an inheritance, 50 percent consider it “highly critical” or “critical” to their long-term financial security and retirement.³ 

The most straightforward way to transfer wealth is by outright distribution. An outright distribution is fast and simple, and there are typically no fees associated with it. There are also no strings attached. When a beneficiary receives an outright distribution, they are free to use, sell, or manage the money and property however they want, with no conditions, restrictions, or oversight. 

However, an outright inheritance may not be in the beneficiaries’ best interest. For someone unprepared to handle an inheritance, not only could the money fail to solve their financial problems, but it could also worsen them or lead to new ones.

In spite of their best intentions to budget, invest, and responsibly spend an inheritance, your loved ones could just as easily squander it on impulse purchases, risky investments, or financial scams. 

More than a quarter of respondents admitted to USA Today that they plan to use their inheritance for travel or luxury spending.⁴ Many (72 percent), according to a Citizens Bank survey, also admit that they are unprepared to manage an inheritance.⁵ 

One downside of an outright distribution is that if a beneficiary has debt, something many young people struggle with, a creditor might be able to make a claim against the beneficiary and take their inheritance even before they can benefit from it. 

Certain beneficiaries may not be legally able to receive an outright distribution. If the recipient is a minor child, for example, or is incapacitated (unable to manage their affairs) and does not have an agent under a financial power of attorney, a court-appointed conservator may be necessary to receive and manage their inheritance for them.

Alternatives to Outright Distribution

None of this is to say that outright distributions are inherently bad. Deciding whether to leave an outright inheritance to a beneficiary depends heavily on their personal situation. Even within the same family, children can have wildly different financial aptitudes and attitudes. Some are perfectly capable of managing their inheritance. Others struggle to plan and save for the future. 

There can also be a gap between what children plan to do and what they end up doing. Parents may sometimes need to protect their children from their own bad habits. 

No matter how much you plan to leave to a beneficiary, it can be a source of pride and fulfillment to know you are making a difference in their life. A Northwestern Mutual survey found that, among those expecting to leave an inheritance, more than two-thirds (68 percent) said it is their “single most important financial goal” or is “very important.”⁶ 

However, leaving an inheritance can also be a source of trepidation. Six in 10 parents told Northwestern Mutual that their children do not value financial responsibility the same way they do, with more than half expressing concerns that this difference in values could negatively impact the family’s assets when they pass from one generation to the next.⁷ And only about a quarter of adults feel prepared for, and confident in, the wealth transfer process, Edward Jones research found.⁸ 

When deciding what method of distribution is best for your child, it helps to know their current financial situation and their short- and long-term financial goals, such as paying down debt, buying a home, giving to charity, and saving for education. This knowledge starts with a family discussion about wealth transfers. We would love to be part of the conversation and answer any questions you and your family have about inheritance-related matters, such as taxes, ways to invest and budget an inheritance, and estate planning after an inheritance.

1. Julie Sherrier et al., Study: Gen Z and millennials plan to use inheritances to invest, pay off debt, USA Today (June 6, 2024), https://www.usatoday.com/money/blueprint/credit-cards/study-great-wealth-transfer-plans. ↩︎
2. Id. ↩︎
3. As $90 Trillion “Great Wealth Transfer” Approaches, Just 1 in 4 American Expect to Leave an Inheritance, Northwestern Mutual (Aug. 6, 2024), https://news.northwesternmutual.com/2024-08-06-As-90-Trillion-Great-Wealth-Transfer-Approaches,-Just-1-in-4-Americans-Expect-to-Leave-an-Inheritance. ↩︎
4. Julie Sherrier et al., Study: Gen Z and millennials plan to use inheritances to invest, pay off debt, USA Today (June 6, 2024), https://www.usatoday.com/money/blueprint/credit-cards/study-great-wealth-transfer-plans. ↩︎
5. Most Americans aren’t ready for the ‘Great Wealth Transfer,’ Citizens, https://www.citizensbank.com/learning/great-wealth-transfer-survey.aspx (last visited Mar. 21, 2025). ↩︎
6. Northwestern Mutual, supra n. 3, https://news.northwesternmutual.com/2024-08-06-As-90-Trillion-Great-Wealth-Transfer-Approaches,-Just-1-in-4-Americans-Expect-to-Leave-an-Inheritance. ↩︎
7. Id. ↩︎
8. The Great Wealth Transfer Starts with the Great Wealth Talk, Edward Jones Research Finds, Edward Jones (Feb. 27, 2024), https://www.edwardjones.com/us-en/why-edward-jones/news-media/press-releases/great-wealth-transfer-research. ↩︎

Now that we are in March, we are well past the point at which most of us have abandoned our New Year’s resolutions. As in previous years, improving physical health ranked among the top goals that Americans set for themselves in 2025.¹ But while goals like losing weight and building strength remain popular, there is a growing emphasis on overall well-being, including mental health and preventative care. 

This greater focus on health and wellness, however, stands in stark contrast to our lack of advance healthcare planning. While some Americans are diligently counting their steps, watching what they eat, and trying to live longer, healthier lives, many have failed to plan adequately for their future healthcare and what could happen in a medical emergency. One basic list can help address this shortcoming. 

The Healthcare Planning Gap

For a growing number of Americans, healthy living is no longer a luxury but a core value. Although we spend more on healthcare than other high-income countries, our health outcomes are among the worst by many metrics.² An estimated 129 million Americans—roughly half the population—have at least one chronic disease (e.g., heart disease, cancer, diabetes, obesity, hypertension).³ 

The COVID-19 pandemic accelerated the trend of Americans taking a more proactive role in their health.⁴ It also prompted more Americans to create estate plans as we contemplated our mortality.⁵ Unfortunately, the percentage of Americans with a will has since fallen back to prepandemic levels of around one-fourth.⁶ 

The number of people who have created a healthcare power of attorney is slightly higher than those who have created a will, but not by much. According to a study by Penn Medicine, the systematic review of approximately 795,000 people in 150 studies found that only 29.3 percent had completed an advance directive, including just 33.4 percent who had designated a healthcare power of attorney.⁷ 

The lead researcher in this study said that this lack of surrogate decision-makers and end-of-life care instructions means that the treatments most Americans would choose near the end of their lives are often different from the treatments they receive—a disconnect that can lead to “unnecessary and prolonged suffering.”⁸

How to Ensure That You Get the Care You Need—and Want

Without medical directives such as a healthcare power of attorney, doctors may be forced to make critical decisions without a clear understanding of your wishes. This can lead to delayed care, unwanted treatments, family disagreements over the best course of action, and even court intervention. 

Although you may have a healthcare power of attorney, this document alone might not be enough to guarantee that the treatments you receive are the ones you need—or would choose yourself. It may be necessary to have an advance directive or living will to help elaborate on your wishes.If your state does not recognize advanced directives or living wills as legally valid, you can still leave a letter of instruction to your healthcare power of attorney to share your thoughts and desires.

A healthcare power of attorney authorizes a trusted person (your healthcare agent) to make medical decisions on your behalf when a medical condition prevents you from making or communicating those decisions. This agent is charged with the task of making decisions that are in your best interest and would ideally be ones you would make for yourself. However, your agent needs additional context to make the appropriate choices for you. This information should be organized in a document that lists the following: 

• Doctor’s name and specialty. In a stressful situation, seemingly obvious details like these can be easily forgotten. 
• Doctor’s contact information. Include the office phone number, after-hours contact number, and the provider’s office address. 
• Current health conditions. List any chronic illnesses or ongoing medical concerns the doctor is managing. 
• Medication list. Provide a complete and up-to-date list of all medications, including dosages, frequencies, and the reasons they are prescribed. 
• Healthcare power of attorney. Confirm that a healthcare power of attorney is on file with the doctor’s office. 
• Insurance information. Knowing your insurance information and coverages can facilitate timely access to care and billing.

Each of the doctors you regularly see should be on the list—and they should have a copy of your healthcare power of attorney on file—to cover all potential health situations. 

During a life-threatening or emergency medical situation, it is generally recommended that your primary care provider be contacted because they know you and your medical history. However, there may also be situations where a specialist, such as a cardiologist or psychologist, needs to be consulted in short order. 

Other Healthcare Planning Documents and Considerations 

Not planning for medical contingencies, from sudden illnesses or injuries to gradual declines in cognitive abilities, could result in you losing the ability to voice your treatment preferences. Because the stakes are so high, your healthcare planning should cover all of the bases. 

• Copies of your power of attorney, both physical and digital, should be kept in several other strategic locations, such as with your agent, trusted family and friends, and your attorney. A medical crisis may require you to visit the emergency room, where the document is not on file. 
• A healthcare power of attorney is just a starting point for future healthcare planning. Other advance directives to consider are a living will, HIPPA authorization form, DNR order, and documents that address organ donation and funeral preferences. And do not forget about life insurance.
• Periodically review your healthcare power of attorney and other advance directives to ensure that they still reflect your wishes. Send and store updated copies that reflect these document changes.

Maintaining your health and fitness can include one simple action that does not involve going to the gym, tracking steps, or following the latest diet trend. It only takes a visit to our office to complement your current wellness goals and get an instant mental health boost knowing that you and your loved ones are prepared for a medical emergency. 

1. Jamie Ballard, What Are Americans’ New Year’s Resolutions for 2025?, YouGov (Dec. 13, 2024), https://today.yougov.com/society/articles/51144-what-are-americans-new-years-resolutions-for-2025.  ↩︎
2. Munira Z. Gunja et al., U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes, The Commonwealth Fund (Jan. 31, 2023), https://www.commonwealthfund.org/publications/issue-briefs/2023/jan/us-health-care-global-perspective-2022.  ↩︎
3. Gabriel A. Benavidez et al., Chronic Disease Prevalence in the US: Sociodemographic and Geographic Variations by Zip Code Tabulation Area, CDC (Feb. 29, 2024), https://www.cdc.gov/pcd/issues/2024/23_0267.htm.  ↩︎
4. New CVS Health Study Finds People Are Taking Greater Control of Their Health As a Result of the Pandemic, CVSHealth (July 8, 2021), https://www.cvshealth.com/news/community/new-cvs-health-study-finds-people-are-taking-greater-control-of.html.  ↩︎
5. Daniel de Visé, Facing Mortality, More Americans Wrote Wills During the Pandemic. Now, They’re Opting Out, USA Today (Apr. 3, 2024), https://www.usatoday.com/story/money/2024/04/03/fewer-americans-writing-a-will/73170465007.  ↩︎
6. Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Feb. 18, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey.  ↩︎
7. Two Out of Three U.S. Adults Have Not Completed an Advance Directive, Penn Med. (July 5, 2017), https://www.pennmedicine.org/news/news-releases/2017/july/two-out-of-three-us-adults-have-not-completed-an-advance-directive.  ↩︎
8. Id. ↩︎