Category: The Wealth Advisor

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. ↩︎

If you are like most Americans, you have at least one to-do list. You might also use lists when you are shopping, brainstorming, setting goals, and planning for events. 

To-do lists, grocery lists, bucket lists . . . the list goes on. However, there is one crucial list that often gets overlooked: the list of trusted professionals and decision-makers who can step in for you during a time of need. 

This list can be a centralized document of all the key players in your life who advise you on a regular basis or are legally designated to carry out your affairs when you become incapacitated (unable to manage your affairs), pass away, or experience an emergency. This simple yet powerful tool can help you, your professional team, and your loved ones be better prepared for future scenarios and more smoothly navigate challenging times. 

Your List of Professionals

Your list of professional advisors should contain contact information for the following important people in your life: 

• Accountant
• Financial advisor
• Insurance agent
• Spiritual advisor
• Other professionals you routinely work with, such as legal and medical professionals

You will also want to include on this list the following key decision-makers in your estate plan documents: 

• Trusted family and friends, in particular those whom you have designated as an agent under a power of attorney
• Your estate executor/personal representative
• Trustee(s) of your trust(s)
• Guardian of your minor children

For each contact, provide the following information: 

• Full name
• Area of expertise or relationship to you (e.g., long-term care insurance agent, son, etc.)
• Contact information (phone number, email address, mailing address)
• Account or policy numbers for any assets under a professional’s management (where applicable)
• Any authority that has been given to a person (agent under a power of attorney and, if so, the type(s) of power granted, such as financial, medical, general, or springing)

Why You Need an Advisor List

A list of professionals can prove invaluable for your loved ones if you pass away or a health crisis leaves you incapacitated. Without it, your loved ones may be left to navigate a maze of financial accounts, legal documents, and critical decisions. Having a centralized repository of who’s who in your personal and professional lives can save your family time, money, and stress when managing and winding down your affairs. Here is a look at who may need to be involved and what they might need to know:

• The person you designate as an agent in your financial power of attorney may need to know whom to contact to oversee and manage your finances. 
• Your executor or funeral representative should know your spiritual wishes when you pass away. Your executor also needs to understand all of the transactions you are a party to so that your estate can be settled. 
• The trustee of a trust you created may want to work with your financial advisor or your attorney to manage the trust’s accounts and property in accordance with your wishes and legal requirements. 
• Your healthcare proxy (the agent under your healthcare power of attorney) might need to reach out to your providers about treatment options and end-of-life decisions. 

In addition to incapacity and death, there are everyday situations when you may need ready access to this list. 

For example, if you must travel unexpectedly, get caught in a natural disaster, are hurt in an accident, lose your smartphone or internet access, or are forced to deal with a family crisis, you might need to reach out to people on the list who can act on your behalf or otherwise provide assistance. However, their contact information may be stored in different locations and hard to locate in a crisis. A single list containing this information is more accessible and efficient. 

Ensure that the list can be accessed by the right people at the right time. Keep it in a secure location, such as a home safe or encrypted digital file, where your advisors and trusted decision-makers can obtain a copy via instructions and permissions you provide to them ahead of time. You might also want to include a copy of the list with other important documents, such as your estate plan, so that designated individuals such as your executor or trustee can refer to it. Consider keeping a copy of the list on file at your advisors’ offices as backups and for safekeeping. 

Add Making a List of Professionals to Your To-Do List

You may assume that your loved ones know whom to contact at a critical moment or that this information is readily available. Compiling a contact list can also get lost in the shuffle of bigger tasks such as making a will, setting up a trust, paying your taxes, and following a financial plan. 

A list of professionals and key decision-makers is an underutilized planning tool that complements your existing documents and goals. This type of list is not just about names and numbers. It ensures that you, your loved ones, and your team can quickly and seamlessly collaborate for your best interests in difficult situations, both expected and unexpected. 

Life and relationships change. The next time you meet with us, check that your advisor list is accurate, up to date, and stored in a secure, accessible place—and check this important task off your to-do list. If you have not already created one, we can assist you.

Do You Know What You Own?

Americans’ median household net worth (meaning half the households have more and half the households have less) is around $193,000, while the average net worth is just over $1 million, according to the Federal Reserve, the central bank of the United States.¹ The median gives a more accurate picture because it shows what most people are experiencing without being skewed by a small number of ultrawealthy Americans.

The Federal Reserve tracks household net worth as an indicator of the overall health of the US economy and to gain a long-term perspective that influences future monetary decisions. You should track your net worth for similar reasons. This process involves creating an inventory of your assets (everything you own) and keeping it updated so that it can be measured, analyzed, and readjusted to keep your financial and estate planning goals on track. 

Majority of Americans Do Not Know Their Net Worth

Your financial plan and your estate plan are deeply intertwined. Trying to create an estate plan without a clear picture of your finances is like planning a journey without knowing your beginning point. 

Do you want to ensure that your loved ones are taken care of when you are gone? Do you want to leave a gift to a charity you care about? Do you want to ensure that the money you have saved and the assets you have acquired benefit the people and causes you care most about? If so, start planning now. Your plan begins with an assessment of your net worth. 

Many Americans are unsure about how to calculate their net worth—or even what it is. 

Around half of Americans told Credit Karma they do not know how to calculate their net worth.² Sixty-seven percent also said they do not track their net worth, and nearly 20 percent said they do not know what actions to take to increase their net worth.³ More than one in five believe the term net worth applies only to the wealthy.⁴ 

Net worth is calculated by subtracting your liabilities (what you owe) from your assets (what you own). 

• Add up the value of all of your assets. Assets are the things you own that have value, such as cash, investments, real estate, and personal property. 
• Add up the value of all of your liabilities. These are your debts, including credit card balances, loans, and mortgages. 
• Subtract the total liabilities from the total assets. 

While this calculation is straightforward, you cannot figure out your net worth if you do not have an accurate picture of everything you own and the value of individual assets, which can be trickier to calculate. 

How an Asset Inventory Fits into an Estate Plan

To provide for your beneficiaries and fulfill other estate planning goals, such as charitable giving, you need to know how much your estate (everything you own) is worth—and therefore how much you have to give. 

Compiling an inventory not only helps you measure, grow, and distribute your wealth; it also helps those who must step in if you become incapacitated (unable to manage your affairs) or when you pass away, such as your estate executor, trustees, and agents under a power of attorney decision-makers. 

We can help you compile a comprehensive list of your assets and fill in any gaps. Before meeting with us, create a list that includes the following information:

• Types of assets and detailed descriptions. Include as much information as possible about each asset, including the following details:
  • Bank accounts: The last four digits of the account number, the full legal name of the financial institution, and whether it is a checking, savings, money market, CD account, etc. Note if the account is held jointly with another person and specify their name and relationship. List the named beneficiary for the account and any contingent (backup) beneficiaries, if you have already completed these forms. 
  • Investments: Name of the brokerage firm or investment company, the last four digits of the account number for each investment, the types of investments (stocks, bonds, mutual funds, ETFs, retirement accounts, annuities, etc.), and supporting information such as the number of shares owned. Specify whether the account is held individually, jointly, or in a trust and list the primary and contingent beneficiaries for each account, if you have already completed these forms.
  • Real estate: Complete street address, the legal description of the property as recorded in the deed, lender name, loan number, mortgage details (principal balance, interest rate, and monthly payment), ownership type, and annual property taxes.
  • Personal property: Vehicles (make, model, VIN, and loan information), art, antiques, coins, stamps, jewelry, and other collectibles (including any appraisals, provenance information, or insurance information), and items such as musical instruments or electronics with significant value. 
  • Digital assets: Online banking and investment accounts, online payment platforms (e.g., PayPal), cryptocurrency wallets, domain names, intellectual property, and online businesses. Include documentation that proves ownership of these assets, such as crypto wallet addresses and keys. 
• Acquisition date. Documenting when you acquired an asset can be helpful for tax purposes and tracking progress toward your financial and estate planning objectives. 
• Present value. An inventory is a snapshot in time and needs ongoing review and updates. Use a professional appraiser for items such as antiques, art, jewelry, collectibles, memorabilia, and furniture. 
• Storage. We can keep an up-to-date asset list for you, but you should have your own copies. Secure the list in a water- and fireproof home safe. Create backups that are digitally stored with other important documents on an encrypted cloud service or external hard drive kept in a separate, safe location. Use cloud services with features that allow you to share specific folders or files with trusted individuals or provide those individuals with login information for the cloud service or physical drive.

Your Wealth Journey Starts Here

You need to know the value of everything you own to grow your net worth. You also need to know how much wealth you have to ensure that your estate planning wishes are achievable. 

Depending on your age, you could have years or decades left to acquire more assets, pay down your debts, and grow your wealth so that you have enough financial resources to fulfill your wishes by the time your estate plan takes effect. 

You cannot get to where you want to go on your wealth journey if you do not understand where you are right now. The first step of this journey is creating a current, comprehensive asset list and meeting with an estate planning attorney. 

1. Jeannine Mancini, If the Average American Household Is a Millionaire with a Net Worth of $1.06 Million, Why Do People Feel So Broke?, Yahoo!Finance (Oct. 28, 2024), https://finance.yahoo.com/news/average-american-household-millionaire-net-193035068.html.  ↩︎
2. Americans Have a Net Worth Problem, and It’s Not Positive, Creditkarma (Apr. 17, 2023), https://www.creditkarma.com/about/commentary/americans-have-a-net-worth-problem-and-its-not-positive.  ↩︎
3. Id. ↩︎
4. Id. ↩︎

How Spousal Lifetime Access Trusts Can Secure Your Clients’ Futures

February is a time of transition. It falls between the height of winter and the start of spring and smack-dab in the middle of tax season. 

During this time, clients may be thinking about tax scenarios but are not quite ready to implement solutions. They may also be planning for Valentine’s Day, a welcome respite from the long winter doldrums, and want to do something special for their spouse. 

This February, you can help your married clients show their love with a unique type of trust called a spousal lifetime access trust (SLAT) that can “lock in” a high federal estate tax exemption, adapt to future needs, and preserve wealth for younger beneficiaries. 

Federal Estate Tax Exemption Could Fall Dramatically in 2026

For 2025, the federal annual gift tax exclusion is $19,000 per individual, and the federal lifetime gift and estate tax exemption is $13.99 million per individual.

These exemption amounts are the highest they have ever been, marking an upward trend since the 2017 tax reforms under the first Trump administration. However, these limits are scheduled to sunset at the end of 2025 without congressional action. If they do revert to pre-2018 levels, the result could be the biggest estate tax increase since the 1940s. 

Such changes would subject far more estates to taxation and dramatically heighten the need for proactive estate planning. Against this backdrop, estate planning tools such as SLATs can help clients maximize historically high exemptions and lock in tax advantages before any changes take effect. 

How SLATs Work and Key Benefits

A SLAT is an irrevocable trust set up by one spouse (the donor spouse) primarily for the benefit of the other spouse (the beneficiary spouse), with other beneficiaries such as children or grandchildren being the remainder beneficiaries when the beneficiary spouse passes away. 

SLATs gained popularity amid the uncertainty of the 2012 fiscal cliff, and the current uncertainty around tax legislation remains a major SLAT selling point. Notable features and benefits of SLATs to highlight for clients include the following: 

• The beneficiary spouse can receive direct distributions from the trust, and the donor spouse maintains indirect access to the assets through the beneficiary spouse. 
• When the donor spouse funds the SLAT, the value of the transferred assets is treated as a taxable gift to the trust beneficiaries, even the beneficiary spouse. The gift is typically sheltered from federal gift taxes by the donor spouse’s federal lifetime gift and estate tax exemption, which is $13.99 million per individual in 2025.

• After the assets have been transferred to the trust, they are removed from the donor spouse’s taxable estate and are generally not included in the surviving spouse’s taxable estate. 
• Any future appreciation of SLAT assets after their transfer to the trust is also not subject to estate taxes. 
• Depending on how the trust is structured, the donor spouse is usually responsible for paying income taxes on the trust’s assets, including dividends, interest, and capital gains. 
• When the trust terminates (i.e., when the beneficiary spouse passes away), the remaining trust assets pass to the remainder beneficiaries, such as children, whom the donor spouse has named in the trust document. The assets can be distributed directly to the remainder beneficiaries or held in further trusts tailored to each beneficiary. 

• A properly drafted SLAT generally protects the beneficiary spouse’s assets from creditors. 
• Married couples can set up separate SLATs to benefit each other. However, it is important to ensure that the trusts have different terms to avoid running afoul of the reciprocal trust doctrine, which could cause both trusts to be undone, resulting in the assets being included in the spouses’ taxable estates. 

Potential SLAT Downsides

SLATs offer tax efficiency, wealth preservation, and financial flexibility, but they are irrevocable and require proper planning to avoid losing access to assets and Internal Revenue Service scrutiny. 

• If the beneficiary spouse suddenly passes away, the donor spouse loses their (indirect) access to the SLAT’s payouts. (The same can happen in the event of a divorce; without the right provisions, the donor spouse may still be on the hook for paying income taxes on trust assets that are solely benefiting their (now) ex-spouse.)
• If trust law is not carefully followed, unwanted tax consequences can occur. One such outcome is that if the donor spouse retains certain powers over the SLAT, such as the unrestricted ability to replace the trustee, the trust’s assets might still be included in the donor spouse’s estate. 
• It is not ideal for the beneficiary spouse to receive distributions from the SLAT unless they are truly needed because the distributions bring assets back into their estate and reduce the trust assets that can grow tax-free. 
• When assets are placed in a SLAT, they retain the donor spouse’s original tax basis, so beneficiaries could end up owing capital gains tax, especially on low-basis assets, when they are eventually sold or liquidated. 
• If the beneficiary spouse serves as a trustee of the SLAT, distributions should be limited to the health, education, maintenance, and support (HEMS) standard. However, the level of access that the beneficiary spouse has will impact the level of asset protection. If more asset protection is needed, an independent trustee should be appointed, and the distributions should be permitted only at the trustee’s discretion. 

Uncertainty Presents Opportunity

February is considered a “shoulder season” for estate planning attorneys and other advisors. The tourism industry uses this term to refer to the time of year between the peak season and off-season, when travel is light and conditions may not be ideal. But within the lull, opportunities abound.

As clients face the prospect of a reduced federal estate tax exemption at the end of 2025, advisors can suggest SLATs as a timely and powerful (and, dare we say, romantic?) tool to transfer substantial wealth and lock in current tax advantages while maintaining financial security and flexibility. 

Reach out and schedule a meeting to discuss specific SLAT-based estate planning strategies. 

An Advisor’s Guide to Qualified Terminable Interest Property Trusts

“A diamond is forever” is a popular saying. Estate planning does not have a time horizon that long, but it does seek to protect a family’s wealth and provide them with financial stability for years to come. 

Around Valentine’s Day, many couples are looking for ways to display their affection. By understanding the nuances of qualified terminable interest property (QTIP) trusts and ways to customize them, advisors can help clients show love to their spouse with a gift that lasts a lifetime—and in many cases, even longer. 

What Is a QTIP Trust?

A QTIP trust is an irrevocable trust that allows a surviving spouse to benefit from their deceased spouse’s assets while ensuring that those assets ultimately pass to beneficiaries designated by the deceased spouse.

Key features of a QTIP trust include the following: 

• Spousal income for life. The surviving spouse must receive the income generated by the trust assets at least annually for the rest of their life, potentially giving them financial security and support.
• Designated remainder beneficiaries. The trustmaker designates the beneficiaries who will receive the trust assets upon the surviving spouse’s death. Such beneficiaries could be children, a charity, or other entities or loved ones.
• Control over assets. The trustee manages the trust assets and ensures that they are used in accordance with the (customizable) trust terms created by the deceased spouse. Depending on the desired level of asset protection, the spouse may serve as trustee of their trust.

QTIPs may be particularly useful for clients who want to provide for a surviving spouse but who also wish to direct the eventual distribution of the trust to different beneficiaries. Clients can simultaneously take advantage of the unlimited marital deduction and retain control over their assets “from the grave,” an option that did not exist until legislative reforms in the Economic Recovery Tax Act of 1981. 

Important QTIP Trust Features

Although a QTIP trust is just a trust, it is special. Certain important and unique characteristics may make it the right solution for your married clients.

• Restricted principal access. The trustmaker can specify whether and under what circumstances the surviving spouse may access the trust’s principal. This restriction helps protect the trust’s assets from being mismanaged or prematurely spent. Such provisions may be useful if the trustmaker has concerns about their spouse’s ability to manage assets. 
• Marital deduction. A QTIP trust allows the trustmaker to take advantage of the unlimited marital deduction to minimize estate taxes. Qualified transfers to the trust for the benefit of a US citizen spouse will not be subject to federal estate tax at the trustmaker’s death (although the assets held in the trust may be subject to estate tax at the surviving spouse’s death).
• Protection from creditors. Assets held in a QTIP trust are generally protected from the surviving spouse’s creditors and from claims in any future remarriage. The level of asset protection will depend on the level of control the surviving spouse has over the trust’s assets. After assets have been distributed to the surviving spouse, they are more vulnerable to a creditor’s claim.
• Balancing interests. A QTIP trust can provide income for the surviving spouse while preserving the trust’s principal for the children, allowing both to benefit from the trust as the grantor sees fit. This arrangement may prove useful when there are children from a previous marriage or another unique family dynamic.

Customizing a QTIP Trust

One of the strengths of a QTIP trust is its ability to be customized to a client’s needs and circumstances. Here are some top-level customization options you may want to discuss with clients:

• Distributions of principal. The surviving spouse is entitled to income generated by the trust at least annually, but the trustmaker can dictate whether and under what circumstances the trustee can distribute the principal to the spouse. Distributions can be structured in several ways, including only for ascertainable standards (health, education, maintenance, and support) or for hardship. They can also give the trustee sole discretionary authority to distribute principal based on the spouse’s needs. The trustmaker can even restrict principal distributions entirely to preserve the remaining beneficiaries’ trust assets.
• Granting the spouse control. Although the trustmaker has the ultimate say on the final distribution of assets, they can grant the surviving spouse some degree of control over the trust using strategies such as a testamentary limited power of appointment, which lets the surviving spouse choose how the remaining trust assets are distributed upon their death among a defined group of beneficiaries predetermined by the trustmaker (e.g., children, grandchildren, or other family members). 

Additional Options and Considerations

Although a QTIP trust may not be the most romantic gift, it could prove more thoughtful, caring—and, years from now, more valuable—than a standard Valentine’s Day purchase. Clients can be sold on them as a way to express their love in a controlled, future-minded manner that supports their legacy goals. 

With tax season officially underway, let’s discuss using estate planning tools like QTIPs to meet clients’ wealth preservation goals this February. 

Power Play: How a General Power of Appointment Trust Can Strengthen Your Clients’ Legacies

Around Valentine’s Day, themes of love and relationships can stress to clients the importance of estate coplanning between couples and the options available to them. A proper estate plan can help ensure that the surviving spouse is taken care of, that the deceased spouse’s wishes are honored after they pass away, and, if necessary, that the marital deduction is utilized to address any estate tax concerns the couple may have. One solution for married couples is placing assets for the surviving spouse in a general power of appointment (GPOA) trust. While this estate planning tool is not as restrictive or protective as other options, a GPOA trust can still provide some peace of mind for clients.

What Is a General Power of Appointment Trust?

A GPOA is the legal authority granted by one individual (the donor) to a different individual (the donee, also known as the powerholder or appointer) that allows the donee to determine who will receive certain assets, either during their lifetime or upon their death. This power is broad and may include the ability to direct distribution of the assets to themselves, their creditors, their estate, or their estate’s creditors, making it distinct from more restrictive limited powers of appointment. In a GPOA trust, the donee is the beneficiary and has a GPOA over the trust’s assets, meaning that the donee can make unlimited withdrawals from the trust.

Why Would a Client Use a General Power of Appointment Trust? 

If your client intends to protect their assets, even in the hands of their spouse, you may wonder why they would use a GPOA trust when the beneficiary spouse can withdraw and do whatever they want with the assets. This type of arrangement sounds more like giving assets to a spouse outright, which may lead to many problems down the road. Although the trustmaker spouse gives up control over the assets, there are a few key benefits of a GPOA trust, including the following:

• Incapacity protection. If the surviving spouse cannot manage their affairs when their spouse passes away, no one has to worry about a guardianship or conservatorship for these assets because the trustee will step in and manage the assets on behalf of the surviving spouse. In other words, the assets held in the trust can generally be managed without court oversight, whereas assets held in the spouse’s name may require court intervention.
• Asset segregation. Depending on the types of assets your client owns and applicable state law, it may be beneficial to have certain assets set aside in a trust so they can be managed independently and to avoid any future commingling should the surviving spouse remarry.
• Probate avoidance. As long as the assets remain in the trust, the successor trustee can take over management when the surviving spouse passes away, bypassing the need for probate court involvement. This ensures a smoother transition and keeps the details of the trust, including what and how much is left to beneficiaries, out of public view. 

Requirements for a General Power of Appointment Trust

As with all trusts, certain requirements must be met, especially if clients want assets transferred to this trust to qualify for the unlimited marital deduction. Some of these requirements are the following: 

• Mandatory income distributions. The surviving spouse must receive all income from the trust at least annually.
• Power over assets. The surviving spouse must have the power to appoint assets to either themselves or their estate.
• Only the spouse. Only the surviving spouse can exercise their power. No other person can have the power to appoint the trust assets.

Talking to Your Clients About a General Power of Appointment Trust

As we celebrate love and relationships this month, we can extend this sentiment to our clients’ estate plans by explaining how, depending on their unique situation, they can use a GPOA trust to accomplish their planning goals. 

Our attorneys are available to advise you on the ins, outs, pros, and cons of a GPOA trust in estate planning.

Why Your Clients Need to Worry About Incapacity Planning

Death is the elephant in the room when it comes to talking about estate planning with clients. To avoid causing undue distress, we often edge around it, referring to heirs and beneficiaries or using terms like pass away or pass on.

This is something of a professional courtesy. Clients do not need to be reminded of death’s inevitability. It is why they engage in estate planning in the first place. They know they will not be around forever and need to plan for the future of their families, businesses, and legacies. 

Advisors get clients to face hard facts head-on and come up with solutions for them, albeit using a gentle touch at times. This duty extends to discussing another sensitive but important topic—what clients want to happen if they are alive but no longer able to manage their own affairs (sometimes referred to as being incapacitated).  

Everyone dies. Not everyone becomes incapacitated. But the odds—and consequences—of suffering incapacity are higher than people might think. 

What It Means to Be Incapacitated

Incapacity is the inability to manage one’s affairs. It can arise from various causes, including illness, injury, and cognitive decline. 

Although often conflated with disability, incapacity and disability are not the same. A disabled person can be incapacitated, but disability does not necessarily involve incapacity. 

Someone who is in a serious car crash, for example, may have injuries that affect their mobility but not their cognition and communication. They might not be able to get around without assistance, but they can still make important decisions about their financial, property, legal, and healthcare affairs. 

Most states, which have laws for determining incapacity in the context of adult guardianship proceedings or conservatorship proceedings (the term used may vary by state), statutorily define what it means to be incapacitated. These definitions typically include several components, including medical, functional, and cognitive elements. 

Defining Incapacity in an Estate Plan

The legal standard for declaring someone incapacitated varies by state, but for the purposes of estate planning, it comes down to whether a person has a mental or physical impairment that renders them unable to make decisions for themselves and requires someone else to make decisions for them about their medical care and their finances. 

Clients do not have to rely on their state’s legal definition of incapacity to dictate when decision-making authority should be transferred to another person. Instead, they have the flexibility to define in their estate planning documents how incapacity is determined. Some clients want their loved ones, physicians, or a combination of the two to make the determination, while others prefer to require a disability panel or court to decide. 

Some clients want to remain in control as long as possible, or have concerns about other people making decisions for them, and prefer a conservative standard. Others are more confident in their decision-makers and comfortable with a less rigorous process. The goal of an estate plan should be to strike the right balance between convenience, objectivity, and timeliness. 

The crucial point to keep in mind during client discussions is that, without an estate plan, the determination of incapacity and the selection of a decision-maker could be left up to the court. 

Incapacity Is a Real Risk

Financial advisors are accustomed to discussing disability with clients in the context of creating a plan for what happens if they are too sick or injured to work. 

Around one in four 20-year-olds will become disabled before retirement, and there is a roughly 70 percent chance that an adult age 65 and older will need long-term care in their remaining years. Unfortunately, nearly three-quarters of Americans live paycheck to paycheck and are not financially prepared for disability.

Here are some facts about incapacity that you and your clients may not know: 

• One in nine adults age 65 and older has Alzheimer’s disease, the leading cause of dementia and a common cause of incapacity.
• Around 13 percent of all adults and 66 percent of adults age 70 and older are living with a cognitive disability, such as dementia, autism, or traumatic brain injury that may render them unable to make an emergency medical decision. 
• Incapacity can be permanent (e.g., due to dementia or a stroke) or temporary (e.g., because someone is unconscious or under anesthesia). 
• Capacity is not all or nothing. A client could retain the capacity to handle their financial affairs but not to make healthcare decisions.
• Capacity can also fluctuate over time. Specific capacities may initially be lost and then recovered. 
• Many different conditions can result in incapacity, such as substance abuse disorder, mental illness, postsurgical complications, and grief and bereavement. 

A client can not only name a decision-maker for a period of incapacity in their estate plan but also make provisions in their plan to compensate someone like an agent under a power of attorney. 

In many cases, the agent is a family member who may not expect to be paid. However, by providing compensation or reimbursement to the agent for expenses incurred while managing their affairs, such as legal fees or accounting costs, as well as for their time, a client can provide incentives and resources to ensure that all of the necessary legwork (and paperwork) is performed during their incapacity. 

Planning for Incapacity

If death is the elephant in the room in estate planning discussions—the obvious issue nobody wants to name—then incapacity is the issue that a client may never see coming. 

Incapacity can happen at any age and have many causes. An estate plan that addresses only what happens to a client’s assets after death without addressing who can make decisions about their personal affairs in the event they become temporarily or permanently incapacitated is missing a core piece. 

The purpose of discussing incapacity should not be to scare clients but to point out its very real possibility and the need to be prepared through comprehensive estate planning. 

Helping Clients with Their Financial Decisions

Although we may not always recognize it, financial decisions and tasks are a part of our everyday lives. They range from daily spending habits to more complex financial planning and include everything from checking account balances and paying bills to updating insurance and signing contracts to making investments and retirement planning.

Most adults are capable of making their own financial decisions. However, what if they are alive but are no longer able to manage their own affairs (sometimes referred to as being incapacitated)? At that point, someone else will have to step in and act for them. 

If a client has an updated estate plan that names a trusted financial decision-maker for periods of incapacity, they have control over who that someone is. Otherwise, the court will appoint someone, and it may not be the person the client would want—or who has their best interests in mind. 

Guardianship or Conservatorship versus an Estate Plan 

An estimated two-thirds of US adults do not have an estate plan. This effectively means that they also lack an incapacity plan, leaving them without documented, legally enforceable instructions regarding who should manage their affairs if they are unable to do so themselves. 

The two main estate planning documents that a client can use to name a financial decision-maker for themselves during a period of incapacity are a revocable living trust and a financial power of attorney. 

• A revocable living trust allows the client (also known as the trustmaker) to serve as trustee of their trust as long as they are alive and have the capacity to manage it. The client also names a successor trustee who will take over trust management when the client passes away or is alive but incapacitated. 

One of the main purposes of a revocable living trust is to avoid probate, but it can also be used to avoid another type of court intervention: the appointment of a legal guardian (referred to as a conservator in some states) to manage an incapacitated person’s legal and financial affairs. The trust document can also specify who determines whether the client is incapacitated and contain detailed instructions about how the successor trustee must manage the trust during periods of the trustmaker’s incapacity. 

• A financial power of attorney is another estate planning tool that can help avoid court intervention if incapacity strikes. It gives one or more people (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal) regarding their financial matters. 

A financial power of attorney is highly flexible. It can include a statement describing how incapacity will be determined and who determines it; it can allow the agent to act only when the principal’s incapacitation is confirmed (in some states), rather than allow the agent to act as soon as the client signs it; it can specify the powers granted to the agent; and it can be limited or long-lasting in duration. Like a revocable living trust, a financial power of attorney eliminates the need for court-appointed guardianship or conservatorship. 

Why should guardianship or conservatorship be avoided? Ultimately, it is about allowing the client to be in control. An estate plan lets a client choose who will handle their finances and property if they are unable to do so themselves. Leaving this choice up to the court makes it a matter of state law and judicial discretion. Another reason to try to avoid court-ordered guardianship or conservatorship is that the majority of the details of the case will be public, so details about someone’s personal life, health, and finances could be shared openly. By planning ahead with legal documents such as a power of attorney or a trust, families can often keep these matters private and handle them without going through the court system. It is a way to protect both privacy and control over important decisions.

Factors When Choosing a Financial Decision-Maker

When choosing a financial decision-maker, clients should consider factors such as trustworthiness, financial knowledge, and the ability to handle responsibilities under pressure. The person they select should have a strong understanding of the client’s values and priorities, be organized, and communicate effectively with other key parties, such as family members or advisors. Additionally, they should be available and willing to serve in the role, as it may require significant time and effort, particularly during complex situations.

Naming co-trustees and co-agents can grant joint fiduciary powers that may provide checks and balances. However, the benefits of these checks and balances should be weighed against the growing trend of banks not readily accepting documents authorizing co-decision-makers. 

If nobody in the client’s immediate circle of friends and family seems like a good candidate, a professional trustee or agent, such as an attorney or financial advisor, can be chosen. However, many professionals are hesitant about serving in the role of an agent under a durable power of attorney, so the client may want to consider other professionals, such as professional caregivers or fiduciaries.

The bottom line is that estate planning lets clients manage their incapacity in advance, in the manner that is best for them, their finances, and their family. 

Having the ability to make their own financial decisions is something they may have taken for granted, and naming financial decision-makers is an area of their estate plan they may have overlooked. However, advisors can offer guidance that gives them peace of mind that the right people and provisions are in place—just in case they are needed.

What Does an Agent Under a Medical Power of Attorney Do?

Informed consent in medicine is an ethical and legal requirement for treatment. It is one of the core principles of the American Medical Association and ensures that patients can ask questions and obtain information about a treatment or procedure and explicitly consent to it. 

There are recognized exceptions to the explicit patient consent requirement, including when the patient is in a medical emergency but unable to make or communicate their own decisions (for example, the client is under anesthesia during surgery or is unconscious). In such cases, a stand-in decision-maker (usually the next of kin) may step in and authorize treatment on the patient’s behalf. 

For nonmedical emergency situations, clients with a comprehensive estate plan can control their future medical treatment by naming a person or people to act and provide consent for them when they are unable to do so (e.g., because of dementia, stroke, a closed head injury, or various other medical conditions and situations). People who lack key estate planning documents could be at the mercy of the courts or medical professionals (who are subject to facility policies and procedures) if they become unable to make or communicate their medical wishes, possibly resulting in care that is different from what they would have chosen. 

The Role of Medical Directives

Medical directives are a series of legal documents that name a medical decision-maker and outline a person’s medical wishes if they become incapacitated and therefore unable to make or communicate their own healthcare decisions. 

Two medical directives crucial for every estate plan are a medical power of attorney and a living will. 

• A medical power of attorney is a legal document that gives a designated person (referred to as an agent or healthcare proxy) the authority to make or communicate healthcare decisions for another individual (the principal) if the principal is unable to do so. These decisions include consent to or refusal of treatments, surgeries, medication, and other interventions. The agent can also access the principal’s medical records and information for decision-making purposes.
• A living will (also referred to as an advance directive) is a document that details an individual’s wishes to receive—or not receive—specific medical treatments and interventions at a future time when the person is incapacitated and unable to consent or refuse. It often addresses life-sustaining measures in terminal situations. However, living wills are not legally recognized in all states.

The medical power of attorney and living will should be written to complement each other. Generally, an agent’s power is limited by any instructions that the principal outlines in their living will, and the agent cannot make decisions that contradict those instructions. Depending on state law, the medical power of attorney may contain healthcare instructions usually contained in a living will as well. 

A living will should clearly state someone’s preferences for a number of end-of-life care decisions, including CPR, ventilation, dialysis, medications, tube feeding, pain management, and organ donation. 

If these decisions are not addressed in the living will or the directives are unclear, the agent can use their judgment to make a decision they believe is in the principal’s best interests and aligns with their values. 

Most people choose an agent under a medical power of attorney who knows them well and understands their values and preferences, but clients are advised to thoroughly discuss intervention and treatment choices with the agent before their services are needed. It is also important to choose someone who can be available in case of an emergency. 

What Can Happen When There Are No Medical Directives 

When there are no medical directives and the patient’s decision-making capacity is impaired, the court will appoint someone to serve as a stand-in decision-maker for the incapacitated patient. This appointment is made through a guardianship proceeding (sometimes called a conservatorship proceeding depending on the state) that is usually initiated by a family member. When there is no family involved, a hospital or a nursing home may reach out to the appropriate state agency to pursue guardianship or conservatorship. 

When choosing a guardian for an incapacitated adult, the court considers a combination of the individuals set forth under state law and the person’s best interests, prioritizing close family members such as a spouse, parent, or adult child. Once the patient is deemed incapacitated, the guardian has full authority to make most or all decisions for the patient unless the patient retains the capacity to make their own decisions.  

While guardianship might seem like a reasonable solution to the issue of not having advance directives and a legally authorized representative, it presents problems as well. Namely, the process is slow. It may take months or more to establish a guardianship. During this time, the incapacitated person’s necessary medical treatment may be put on hold or delayed.  

However, what if a patient suffers a medical emergency and needs immediate care? This could happen from something as routine as a fall or a car crash that results in a traumatic brain injury, a leading cause of incapacitation. Stroke, organ failure, and sepsis can also come on suddenly and cause incapacity. 

In these situations, the court may grant emergency guardianship on a temporary basis when someone’s health is at risk, they lack capacity, or a crucial decision must be made and they do not have a validly appointed decision-maker available. This arrangement lasts for a limited period or until a hearing can be held to appoint a permanent guardian. Emergency guardianship proceedings are still not instantaneous, however, unlike a medical power of appointment.

Another drawback of guardianship proceedings is that they are usually expensive: there will be court fees and potentially attorney’s fees if one is used, and most states require that an attorney represent the guardian or conservator in the court proceedings and throughout the duration of the case. 

Lastly, a significant drawback of guardianship proceedings is lack of privacy. Since these proceedings take place in court, much of the information shared becomes part of the public record. This includes sensitive details about the individual’s health, finances, and personal circumstances, which can feel invasive and could lead to embarrassment or stigma. Additionally, public disclosure may strain family relationships or invite unwanted attention, making the process emotionally challenging for everyone involved.

For these reasons, medical professionals and attorneys widely consider guardianship an inadequate solution that should be used only as a last resort. 

If you have clients without friends or family to act as stand-in decision-makers, they can name a professional, such as a physician or social worker, to make important medical decisions for them and avoid needing a guardianship proceeding to be initiated.

Estate Planning Avoids Unintended Medical Consequences

The upshot of not having medical directives is that a client loses control over decisions that may be not only medically necessary but also highly personal. To ensure that their medical wishes are honored, they should have a medical power of attorney and a living will as part of their estate plan and regularly check to ensure that the stand-in decision-makers they name are still available, willing, and able to fulfill their duties.

Fall is a time of transition. Depending on where you live and your family’s traditions, the shorter days and cooler temps of autumn could signal that it is time to ditch the short sleeves in favor of long sleeves, pack away the bicycles and tune up the ski equipment, store the lawnmower and test the snowblower, and swap the spooky season decorations in favor of Thanksgiving décor. 

Those of us who live in more southern climates may have less to prepare for weather-wise. However, fall is still a period of change that can put demands on our time, both at home and at work. School is back in full swing, the holiday season is ramping up, and there may be projects you want to complete before the year is over. 

This is the perfect time to take stock of the past year and tie up loose ends before a frenetic last few weeks that can be equal parts stressful and celebratory. Having a fall to-do list can make the challenges of balancing family and professional commitments more manageable during this busy season. 

Tax Day 2025

Like the holidays, tax season has a way of sneaking up on us. 

Next year’s Tax Day is scheduled for April 15, 2025. While that is months away, you can still take steps now to enhance your tax benefits for this year and put you in a strong financial position headed into next year. 

For example, you may want to make additional charitable contributions, maximize annual contributions to retirement accounts, and defer income or accelerate deductions to optimize your current year tax bracket. This is a great time to meet with your CPA or accountant to weigh your options.

If you have incurred capital gains during the year, you can offset those gains by selling investments at a loss, a strategy known as tax-loss harvesting that can reduce your taxable income and tax liability. And if you must take required minimum distributions from your tax-deferred retirement accounts, you must do so by year’s end. Consider meeting with your financial advisor or developing a relationship with one to determine the best strategy for your circumstances and goals.

The end of the year is also a good time to get your tax and financial records in order so that when you meet with your accountant before Tax Day, you will have solid bookkeeping to inform your tax decisions and strategies. 

Holiday Gifting and Gift Taxes

We spend a great deal of time selecting the perfect gifts for our loved ones, but many people are content to receive cold hard cash. 

A survey from Statista shows that the most desired Christmas gift in 2023 was money (43 percent of respondents). ¹ Seven in ten Americans told a Yahoo Finance/Ipsos poll they would be happy to receive an investment as a holiday gift, including over 40 percent who said they would be “very happy.” ² Among the top reasons cited for wanting to receive an investment were saving for the future, building wealth, and paying off debt³. 

The annual gift tax exclusion for 2024 is $18,000 per person or $36,000 per married couple. That means you and your spouse can give up to $36,000 to each of your kids, each of their spouses, and each of your grandchildren in 2024 without having to file a gift tax return or pay any tax.However, the annual limit is time-sensitive, so you must make 2024 gifts prior to December 31, 2024. 

Gifts exceeding the annual exclusion amount may require filing a gift tax return (IRS Form 709), but they will not necessarily result in a requirement to pay gift taxes unless the total amount of all gifts you have made during your lifetime over the annual exclusion amount exceed your lifetime exemption ($13.61 million for a single taxpayer in 2024 and double that for married couples). 

An added incentive to make a generous holiday gift in 2024 is that the currently high exemption amounts are set to expire at the end of 2025. Capitalizing on the current window to make large gifts can be part of an estate planning strategy to move money out of your estate and avoid or minimize federal estate taxes. 

Estate Plan Review

Looking back on the past year is a useful exercise for your estate plan. The rhythm of the seasons and our daily lives produce a regularity that can blind us to the many small changes that are constantly occurring. Add them all up, and you could be in a very different position headed into 2025 than you were starting 2024. 

Was there a birth or death in your family this year? A change to your income? A falling out or reconciliation with a loved one? Did you move to a new state, buy a new home, or receive an inheritance? Do you have a child headed off to college in the spring?  

Any of these situations—and many others—should prompt you to revisit your estate plan. Whether there has been a change in the law or a change of heart, your estate plan should reflect where things stand now—not where they stood a year ago or when you first made your plan.

Refocusing on What Matters Most

Being around family during the holidays usually produces one or two moments that remind us of what we are ultimately working toward and saving for. 

The holidays only come once a year, but your estate plan can have repercussions for your family far into the future. Before you get wrapped up in the celebrations, vacations, and fun temptations that surround the holidays, make time to sit down with your attorney to conduct your own personal year in review and make any necessary adjustments to your estate plan. 

1. Alexander Kunst, Christmas gifts most desired by U.S. consumers in 2023, Statista (Nov. 30, 2023), https://www.statista.com/statistics/246622/christmas-gifts-desired-by-us-consumers.  ↩︎
2. Jennifer Berg & Talia Wiseman, Most Americans would be happy to receive investments as holiday gifts, Ipsos (Nov. 27, 2023), https://www.ipsos.com/en-us/most-americans-would-be-happy-receive-investments-holiday-gifts. ↩︎
3. Id. ↩︎

November is an exciting time in the world of sports. Baseball is fresh off the World Series, the NBA and NHL seasons are starting to hit their stride, and the NFL is at the halfway point as the annual Thanksgiving slate of games approaches. 

Football is by far the most popular sport in America and has been for over five decades.¹ The Thanksgiving matchups in 2023 each drew an average of more than 34 million viewers²—an impressive feat in our age of fractured media and streaming services. 

No other cultural event today, sporting or otherwise, brings people together the way football does. It has permeated the way we speak, with terms like moving the goalposts and two-minute drill commonly used in everyday situations.

Why has football captured the American imagination like nothing else? Some say football is a metaphor for life that can teach us lessons about discipline, teamwork, and overcoming adversity to reach a goal. 

In the spirit of our national pastime, we present to you your estate planning team, football-style. 

Your Offensive Team

Meet the offensive players on your own personal estate planning team: your attorney, financial advisor, and tax professional. 

Working together, we help you move the ball—in this metaphor, your estate plan—toward the end zone, which represents your goals of saving for retirement, building wealth, and leaving money behind for loved ones. 

• Attorney: As the quarterback of your estate plan, we lead the team and make critical decisions under pressure. Things do not always go according to plan, so we are adept at planning for contingencies. A play that looked perfect on paper may need to be changed at the line in response to what we see on the other side of the ball, how much time is left on the clock, and other factors. On a given down, we may need to call an audible and change plays, hold onto the ball and run it ourselves, or pass the ball to another player on the team.
• Financial advisor: A financial advisor creates a game plan based on the situation. They survey the field (your finances and market conditions) and adjust strategies to capitalize on opportunities. Your financial advisor has a variety of designed plays (think investments like stocks, bonds, real estate, and retirement accounts) proven to work in certain situations to go along with the occasional trick play—a higher-risk, higher-reward strategy—that they are ready to dial up at the right moment in the game. 
• Tax professional: A tax professional has a unique skill set the team can deploy to exploit mismatches (i.e., favorable tax rules) and swing game momentum at a critical juncture (tax season). They may be on the field for only a few plays a game, but when their number is called, they can make a big impact, helping you to gain field position and create scoring opportunities by finding ways to maximize tax refunds, reduce taxable income, or uncover tax savings. 

Your Defensive Team 

High-powered offenses are widely heralded in football today. A team that does not score enough points and is constantly playing from behind usually comes up short.

However, many teams and coaches still follow the mantra “defense wins championships.” To achieve your goals, you have to do more than move the ball down the field. You must also protect your own end zone with a strong defense, led by your chosen decision-makers: 

• Executor/personal representative: This is the leader of your defense.You have entrusted them with a game plan for after you pass away that involves filing your will with the probate court; taking stock of and distributing your money and property; paying for your final expenses, debts, and taxes; coordinating with beneficiaries; and closing the estate. They have a great deal on their plate, and hopefully, they have been “coached up” before game time by you or your attorney so that they know what to expect when you pass away and they take the ball. 
• Successor trustee: Building a strong football teamrequires having depth at every position—players who can step in when a starter goes down.If you set up a living trust as part of your estate plan, you need somebody to administer the trust after you die or become incapacitated. This person—your successor trustee—must be ready to step in at a moment’s notice and execute the plan you drew up, ensuring continuity and leadership. 
• Power of attorney agent: Depth is crucial in football because injuries are common. Until an injured starter returns, their backups must competently fill their role in the meantime. In your estate plan, your backup is your agent under a medical or financial power of attorney. They can make decisions about your healthcare and finances when you are incapacitated and cannot make these decisions yourself. 

Put Together Your Estate Planning Team

Forty-one percent of US adults say football is their favorite sport³, but only one-third of Americans have created an estate plan⁴. 

We know it is hard to get as excited about an estate plan as it is for “the Big Game.” Football may be a metaphor for life, but at the end of the day, the stakes of a football game cannot compare to what is at stake in your estate plan: everything you have ever worked and saved for and the future of those you love. 

Not having an estate plan amounts to playing a game without a playbook or a full roster. It is relying on luck—a Hail Mary—instead of preparation and execution. It is just as important to revisit an estate plan regularly and make in-game adjustments to account for new and changing circumstances. 

A football team needs a strong offense and defense working together with defined roles to achieve success. Likewise, you need an estate planning team that works together to take what you have and execute plays that carry out your wishes and result in success. 

Do not let your estate plan come down to a two-minute drill when time is running out. Huddle up with us now so that we can talk about how to put you, your finances, and your family in a winning position. 

1. Jeffrey M. Jones, Football Retains Dominant Position as Favorite U.S. Sport, Gallup (Feb. 7, 2024),
   https://news.gallup.com/poll/610046/football-retains-dominant-position-favorite-sport.aspx.  ↩︎
2. NFL sets Thanksgiving Day audience record for second straight year, averaging 34.1 million, Spectrum News 1 (Nov. 29, 2023), https://spectrumnews1.com/wi/milwaukee/news/2023/11/29/nfl–thanksgiving-day-audience-record–second-straight-year–viewership.  ↩︎
3. Jones, supra note 12. ↩︎
4. Lorie Konish, 67% of Americans have no estate plan, survey finds. Here’s how to get started on one, CNBC (Apr. 11, 2022), https://www.cnbc.com/2022/04/11/67percent-of-americans-have-no-estate-plan-heres-how-to-get-started-on-one.html.  ↩︎