Estate Planning
Wills, trusts, and protecting wealth for heirs
Week 49 Day 1: Why Estate Planning Matters Even If You Are Not Rich
Estate planning is not about being wealthy. It is about making sure the people you love are not burdened with legal chaos when you die or become incapacitated. Without a will, the state decides who gets your assets. Without a power of attorney, no one can make decisions for you if you cannot make them yourself. These documents cost a few hundred dollars and save your family thousands and months of
Read commentary →Week 49 Day 2: Wills vs. Trusts: Which Do You Need?
A will tells a probate court what to do with your assets after you die. A revocable living trust holds your assets during your lifetime and transfers them to your beneficiaries when you die without going through probate. The trust avoids the public, slow, expensive probate process. For most people with a home and retirement accounts, a trust is worth the extra cost.
Read commentary →Week 49 Day 3: Beneficiary Designations: The Override Nobody Checks
Your 401(k), IRA, life insurance, and bank accounts pass to whoever is named on the beneficiary form -- regardless of what your will or trust says. If you named your ex-spouse on your 401(k) in 2005 and never updated it, your ex gets the money when you die, even if your will says otherwise. Beneficiary designations are the most powerful and most neglected estate planning tool.
Read commentary →Week 49 Day 4: The Federal Estate Tax: Why Most People Should Not Worry
The federal estate tax only applies to estates exceeding $13.61 million per individual ($27.22 million per married couple) in 2024. Fewer than 0.1% of American estates owe federal estate tax. If you are not in that group, estate tax planning is irrelevant to you. Focus instead on the basics: will or trust, beneficiary designations, powers of attorney, and income tax planning for inherited retireme
Read commentary →Week 49 Day 5: Powers of Attorney: Protecting Yourself While You Are Alive
A power of attorney names someone to act on your behalf if you cannot. A financial power of attorney lets your agent pay your bills, manage your investments, file your taxes, and handle real estate transactions. A healthcare power of attorney lets your agent make medical decisions. Without these documents, your family faces a court petition for guardianship -- a process that is expensive, slow, an
Read commentary →Week 49 Day 6: The Step-Up in Basis: A Massive Tax Break at Death
When you die, your heirs receive your taxable investments with a 'stepped-up' cost basis equal to the market value at the date of your death. If you bought stock for $10,000 and it is worth $100,000 when you die, your heirs inherit it at a $100,000 basis. The $90,000 gain is never taxed. This is one of the largest tax breaks in the entire code and it fundamentally changes how you should think abou
Read commentary →Week 49 Day 7: Your Estate Planning Checklist: The Documents That Protect Your Family
Estate planning is not a one-time event. It is a set of documents you create, review periodically, and update after major life changes. Get the basics done this month, and your family is protected. Everything else is optimization. Do not let the perfect be the enemy of the done.
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