Estate planning has a branding problem: the phrase suggests sprawling estates and complicated trusts. In reality, an estate plan is simply the set of instructions for what happens to your assets, and who can act for you, if you die or become incapacitated. Nearly every adult benefits from having the basics in place.
Estate documents must be drafted by a qualified attorney. A financial planner’s role is to help you understand the landscape, coordinate the pieces, and make sure your accounts actually match your intentions.
The core documents
Most foundational estate plans include:
- A will, which directs how probate assets are distributed and, critically for parents, names guardians for minor children.
- A durable power of attorney, naming someone to handle financial matters if you cannot.
- A healthcare proxy and living will, covering medical decisions and end-of-life wishes.
- In many cases, a revocable living trust, which can allow assets to pass outside of probate and provide for management during incapacity.
Beneficiary designations override your will
Retirement accounts, life insurance, and annuities pass by beneficiary designation, not by will. This is the single most common gap we see: a thoughtful, professionally drafted will sitting alongside a 401(k) that still names an ex-spouse or a deceased parent. Reviewing designations after every major life event, and at least every few years, is inexpensive insurance against an outcome nobody intended.
Titling matters too
How accounts and property are titled, whether individually, jointly, or in trust, determines how they transfer. A trust that is drafted but never funded, meaning assets were never retitled into it, may accomplish little. Coordinating titling and designations with the estate documents is where financial planning and legal work meet.
When to revisit the plan
Marriage, divorce, births, deaths, a move to a new state, a business sale, or a significant change in net worth are all triggers for a review. Tax laws change as well, including federal and state estate tax exemption levels, and a plan drafted under old rules may no longer do what you expect. If your documents are more than a few years old, a review with your attorney is worthwhile.
Important disclosures
This article is provided for educational and informational purposes only and should not be construed as personalized investment, tax, or legal advice. The information presented is general in nature and may not be appropriate for your individual circumstances. Litchfield Financial, LLC does not provide tax or legal advice; please consult a qualified tax professional or attorney regarding your specific situation. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. No strategy, including diversification or asset allocation, assures a profit or protects against loss in declining markets.
Litchfield Financial, LLC provides investment advisory services through Claro Advisors Inc. (“Claro”), a registered investment advisor. Claro Advisors Inc. is a Registered Investment Advisor with the U.S. Securities and Exchange Commission (“SEC”) based in the Commonwealth of Massachusetts. Registration of an Investment Advisor does not imply any specific level of skill or training. Information contained herein is for educational purposes only and is not to be considered investment advice.
