How Estate Planning Can Protect Your Wealth and Loved Ones

Nov 5

Estate planning is an act that provides security and stability for loved ones after you’re gone. It helps minimize stress, conflict, and ensures your wishes are honored. An estate plan also allows you to articulate your values, designate care in times of illness, and create a framework that supports your family.

Despite its crucial role, only 32% of U.S. adults have a will, the lowest rate since 2020. ${}^1$ Of those without a will, 40% of them believe they lack sufficient assets. ${}^2$ However, proper estate planning benefits everyone, regardless of the size of their portfolio.

Why Protecting Your Future Matters

By defining how your assets should be managed and distributed, you lift the burden of guesswork and stress from your family during an emotional time. Beyond your finances, estate preparation allows you to leave a lasting legacy of values and wishes for how you'd like to be remembered. You can also set up a tax-efficient structure to care for your family as well. With healthcare directives and powers of attorney, you can allow trusted individuals to make decisions on your behalf, if you're unable to do so.

Common Estate Planning Mistakes to Avoid

Despite the importance of estate planning, 1 in 4 Americans without a will don’t intend to create one, often leaving families to deal with unnecessary complications. ${}^3$ Now let's say you already have a will in place; it still may not be enough. A will alone doesn’t guarantee that your wishes will be carried out after you pass because they only become effective once they’re in probate. ${}^4$ Furthermore, a will can only include assets that you own outright. If you co-own a property or business with another person, that cannot be included in your will. These discrepancies can cause oversights that create confusion, disputes, and unintended consequences. Here are some real-life examples that illustrate why estate preparation matters for everyone, regardless of their level of wealth or assets they leave behind.

Family Disputes: Discussing your wishes with family can prevent misunderstandings. Aretha Franklin's estate, initially believed to have no will, led to prolonged legal disputes and costs. ${}^5$
Neglecting to Update After Major Life Events: Life can change at the drop of a dime. Marriages, divorces, births, and deaths can dramatically impact your estate strategy. Heath Ledger's will, written before his daughter's birth, was not updated, leading to public legal disputes among his family. ${}^6$ This also applies to expats who may need to update documents to reflect their current country of residence.
Family Businesses: Misunderstandings can occur over sentimental items, from small collectibles to multi-million dollar family businesses. Prince's lack of a will resulted in chaos and claims from over 45 people, demonstrating the need for clear instructions regarding inheritance and succession. ${}^7$
Ignoring Digital Assets: Your online presence, including social media and digital banking, is a part of your legacy. Documenting these assets and providing instructions for their management or closure can prevent frustration for your family.
Ensuring Your Wishes are Followed as Intended: Without an estate plan, the state can determine where and how your assets are distributed, often leading to lawsuits, creditors taking your assets, or even bankruptcy that becomes a burden to your family.

Actionable Steps for a Loving Estate Strategy

Creating an estate plan begins by documenting your wishes for healthcare and long-term care. Designate guardianship for dependents and pets, and select individuals whose values align with yours. Regularly review these designations and consider naming a backup. Take an inventory of all possessions and assets to simplify the process for your executor and prevent missed assets. With a financial professional, compile all essential documents, key components include:

Last will and testament, which outlines asset distribution and designates guardians for minor children and an executor.
Revocable living trust allows for asset management during your lifetime and smooth transfer to beneficiaries after death, often avoiding the difficulty of probate.
Durable Power of Attorney grants a trusted individual authority for financial and legal decisions if you become unable to make decisions on your own.
Finally, Healthcare Directives, such as a living will and healthcare power of attorney, provide clear instructions for your preferred medical treatment.

Now that you've gathered all your important documents, it's time to choose a trusted executor to manage your will and trust assets. Don't hesitate to seek professional guidance for more complex estates. Remember to revisit your estate plan regularly—every three to five years, or after any big life changes—to make sure it truly reflects your estate plan and your family's needs.

Your estate strategy is a lasting gift of love, reducing future uncertainties, minimizing family conflicts, and ensuring your legacy reflects what you wanted. Every action you take in estate planning demonstrates your love and consideration for those who matter most to you.

Investing involves risk, including the potential loss of principal. The information provided is for general educational and informational purposes only and is not intended to serve as specific financial, investment, or tax advice. Individual circumstances vary, and you should consult with a qualified financial or tax professional before making any financial decisions.

Sources:

Caring.com, “2025 Wills and Estate Planning Study,” July 9, 2025. www.caring.com/caregivers/estate-planning/wills-survey