Estate Planning Basics: Protecting Your Legacy

By Gregg Gonzalez, CFP®, CFF®

Estate Planning Basics: Protecting Your Legacy

Wills, Trusts, Beneficiaries, and Avoiding Probate

Estate planning isn’t just for the wealthy, it’s for anyone who wants to ensure their assets are distributed according to their wishes while protecting their loved ones from legal and financial complications. At RetireStrong Financial Advisors, we have learned whether you’re just getting started or updating an existing plan, here’s what you need to know about wills, trusts, beneficiaries, and avoiding probate.

1. Why Estate Planning Matters

A solid estate plan ensures that:
✔ Your assets go to the right people
✔ Your loved ones avoid unnecessary legal battles
✔ Your heirs don’t face excessive taxes or long delays
✔ Your medical and financial wishes are honored if you’re incapacitated

Without an estate plan, state laws decide who gets your assets, which may not align with your intentions.

2. The Importance of a Will

A will is a legal document that specifies:

Who inherits your assets (family, friends, charities)
Who becomes the legal guardian of minor children
Who serves as executor (the person managing your estate)

What Happens If You Die Without a Will?

If you pass away intestate (without a will), state laws determine asset distribution—often resulting in delays and unintended beneficiaries.

📌 Our RetireStrong Tip: Keep your will updated, especially after major life events like marriage, divorce, or having children.

3. Trusts: Do You Need One?

A trust is a legal arrangement where a third party (trustee) holds and manages assets on behalf of beneficiaries. Unlike a will, a trust avoids probate and can provide greater control over asset distribution.

Types of Trusts:

🔹 Revocable Living Trust:

Allows you to retain control of assets during your lifetime.
Assets transfer to beneficiaries immediately upon death, avoiding probate.
Can be changed or revoked at any time.

🔹 Irrevocable Trust:

Once created, it cannot be changed or revoked.
Assets in an irrevocable trust are protected from creditors and estate taxes.

🔹 Special Needs Trust:

Protects assets for disabled loved one(s) while maintaining their eligibility for government benefits.

📌 Our RetireStrong Tip: A trust is ideal for individuals with significant assets, minor children, or complex family dynamics.

4. Naming Beneficiaries Wisely

Certain assets, such as retirement accounts, life insurance policies, and bank accounts, allow you to name beneficiaries directly. These assets bypass probate and go directly to the named person.

✅ Best Practices for Beneficiaries:

Keep them up to date (especially after life changes like marriage or divorce).
Name contingent beneficiaries (in case your primary beneficiary passes away).
Avoid naming your estate as a beneficiary, this can trigger probate.

📌 Our RetireStrong Tip: Ensure your beneficiary designations align with your will and trust to prevent conflicts.

5. How to Avoid Probate

Probate is the court-supervised process of distributing assets after death. It can be costly, time-consuming, and public. Here’s how to avoid it:

✅ Create a Revocable Living Trust – Transfers assets smoothly to heirs without court intervention.
✅ Use Beneficiary Designations – Assign beneficiaries for retirement accounts, life insurance, and bank accounts.
✅ Hold Assets Jointly – Property titled as “Joint Tenants with Right of Survivorship” automatically transfers to the surviving owner.
✅ Use Transfer-on-Death (TOD) or Payable-on-Death (POD) Accounts – Many banks and investment accounts allow direct transfers to beneficiaries.

📌 Our RetireStrong Tip: Avoiding probate saves heirs time, money, and privacy.

6. Other Key Estate Planning Documents

Beyond wills and trusts, consider these essential documents:

📄 Power of Attorney (POA) – Appoints someone to manage finances and legal matters if you become incapacitated.
📄 Healthcare Proxy & Living Will – Specifies your medical preferences and names someone to make healthcare decisions.
📄 HIPAA Authorization – Allows designated individuals to access your medical records.

📌 Our RetireStrong Tip: These documents ensure your wishes are followed if you can’t make decisions yourself.

7. Common Estate Planning Mistakes to Avoid

🚫 Not Having an Estate Plan at All – Leaves your assets and family at the mercy of state laws.
🚫 Failing to Update Documents – Life changes (marriage, divorce, births, deaths) may require updates.
🚫 Ignoring Taxes – Large estates may be subject to estate or inheritance taxes. Proper planning can reduce tax burdens.
🚫 Not Communicating with Family – Surprises can lead to disputes. Let your loved ones know your intentions.

📌 Our RetireStrong Tip: Review your estate plan every 3-5 years or after major life changes.

Our RetireStrong Final Thoughts: Protecting Your Legacy Starts Today

Estate planning is about more than money, it’s about protecting your loved ones and ensuring your wishes are honored. By creating a solid plan with a will, trust, and beneficiary designations, you can avoid probate, minimize taxes, and leave a lasting legacy.

📌 Need help creating an estate plan? Consult an estate planning attorney or a RetireStrong financial advisor to ensure your assets are protected!

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

RetireStrong Financial Advisors and LPL Financial do not offer legal advice or services.