ESTATE PLANNING: SIMPLE UPDATES THAT MAKE A BIG DIFFERENCE
Regardless of your net worth, everyone needs an estate plan.
If you don’t take the time to craft (and update) your own plan, the laws of the state in which you pass away will control how your assets pass.
The Importance of Keeping an Up-to-Date Estate Plan
Your “estate” refers to your cash, real estate, tangible personal property, investment and retirement accounts, and any other assets that you own or control by the time you pass away. (1)
These assets will then be transferred to your beneficiaries, whether designated or through the intestacy process, charities that you select, or in the form of state and/or federal taxes. The most basic set of estate planning documents generally includes your will, healthcare power of attorney or healthcare proxy, advanced healthcare directive, and durable financial power of attorney. Depending on your goals, you may also have a revocable trust and possibly an irrevocable trust. (1)
It’s important to pay particular attention to those you nominate to serve as your fiduciaries, including your executor, the agent under your power of attorney, your healthcare agent, the guardian of your minor children, and your trustee. (1)
What Is the Difference Between a Beneficiary Designation and a Will?
A beneficiary designation is a document that names the person who will receive an asset in the case of your passing. Beneficiary designations are unique to each asset and are managed by the entity that holds said asset. (2)
A will is an estate planning document that details your instructions regarding the distribution of your assets. It’s a legally binding document that should hold up in court, providing that you set it up properly. (2)
In short, a will provides instructions for all of the assets included in your estate, whereas a beneficiary designation is for a specific asset. Common assets that pass by beneficiary designation include life insurance, retirement accounts, and annuities. (2)
Titling of Accounts and Assets
While it’s important to create a will with your attorney, it’s equally important to ensure all of your accounts assets are properly titled. (3)
“Titling” is a legal term that identifies how and who owns your assets. The titling or ownership structure will affect how your assets are distributed, whether or not they need to go through probate, and the amount of estate taxes that must be paid. (3)
For example, if you own a home jointly with someone, the titling of the property would determine the disposition. Your share of the home could be distributed to your surviving spouse, to your estate, or to a third party. In states with community property, the distribution determination could be more involved. (3)
How assets are titled and how beneficiary designations are completed can have significant tax implications. Consider working with an estate planning professional to ensure your assets are properly titled and beneficiary designations are properly completed to align with your estate planning goals. (1)
When to Revisit Your Estate Plans
While we recommend reviewing your estate plan annually, important events such as a move, birth of a child, divorce, purchase of a second home, etc., could require changes.
It is a good practice to spend a little time each year ensuring your estate documents reflect your wishes and are consistent with your goals.
Article Sources:
1) Fidelity Viewpoints. “5 steps to power up your finances,” Fidelity. December 18, 2025. Accessed January 12, 2025. https://www.fidelity.com/learning-center/personal-finance/create-a-financial-plan.
2) Parker, Craig. “Beneficiary Designation vs Will - What You Need to Know,” Trust and Will. Accessed January 14, 2025. https://trustandwill.com/learn/beneficiary-designation-vs-will.
3) “Planning your estate? Make sure your assets are properly titled,” Citizens. Accessed January 14, 2025. https://www.citizensbank.com/learning/estate-assets-properly-titled.aspx.