Financial Planning
Estate Planning: Key Terms & Issues to Consider

Estate Planning: Key Terms & Issues to Consider

Jake Skelhorn
April 30, 2024

When it comes to securing your legacy and ensuring your assets are handled according to your wishes, estate planning is an indispensable tool. This blog post  aims to demystify the often complex terminology and critical considerations involved in the process. Whether you're setting up your first will or revisiting an existing plan, understanding these foundational concepts is essential. We'll explore the most important terms you need to know and the pivotal issues that could impact how your estate is managed and distributed, helping you make informed decisions that align with your personal and financial goals.

Estate planning is an essential process that ensures your assets are distributed according to your wishes and that your loved ones are cared for in your absence. This guide provides a detailed look at the critical aspects you need to consider, divided into four main sections.

General Issues

Creating Your Will: The cornerstone of any estate plan is your last will and testament, which outlines how you want your assets distributed. It's crucial to understand that a will alone does not avoid the probate process.

Appointing Guardians: If you have minor children, appointing a guardian is imperative. You should consider not only who will raise them but also how to financially support the guardian.

Financial Decision-Making: Establishing durable powers of attorney for both healthcare and financial decisions is vital if you become incapacitated. This ensures that someone you trust can make decisions on your behalf.

Reviewing Appointees: Regularly reviewing and possibly updating the individuals you have appointed (executors, trustees, guardians) to manage your estate and care for your dependents is necessary to ensure they are still the right choice.

Questions to Ask:

  1. Do you have any financial concerns regarding your heirs(e.g., fiscal irresponsibility, divorce, special needs, etc.) you’d like to address in your estate plan?
    • If so, consider ways you might mitigate risks related to these concerns (e.g., providing instructions, establishing trust provisions, etc.).
  2. Are you making (or wishing to make) gifts to your heirs while you are alive?
    • If so, consider the extent to which gifting to your heirs may complement, or even fulfill, certain estate planning wishes.
  3. Do you wish to have someone who can make medical and financial decisions on your behalf should you become incapacitated?
    • If so, consider establishing a durable medical and financial power of attorney that appoints someone to make medical and financial decisions for you in the event of your incapacitation.

Asset Issues

Management of Illiquid Assets: If your estate includes significant illiquid assets like real estate, it's important to plan for how these will be handled. This might mean arranging for liquidity through life insurance or other means to cover expenses and taxes.

Diverse Investment Holdings: Ensure that your investment allocations are structured so that they do not leave your heirs with unequal inheritance, especially when it comes to different asset classes that might appreciate differently.

Digital Assets: In today’s digital age, including digital assets in your estate plan is crucial. Use a secure password manager for centralized access and ensure clear instructions are left for their management.

Jointly Owned Assets: Review the titling of any jointly owned assets to confirm they align with your overall estate plan and intentions.

Questions to Ask:

  1. Is a large portion of your net worth composed of illiquid assets(e.g., homes, land, etc.)?
    • If so, consider how this may impact your heirs’ ability to pay any final expenses and/or divide the assets (e.g., keep, sell, buy each other out, etc.). Be mindful to set aside additional funds (e.g., life insurance, other liquid assets, etc.) to mitigate this risk.
  2. Do you have any digital assets (e.g., online banking, digital storefronts, cloud storage, emails, logins, etc.) that you need to include in your estate plan?
    • If so, consider using a secure password manager as a centralized hub for all of your digital assets. Make sure your wishes regarding digital assets are clearly stated and instructed within your estate documents (e.g., will, trust, etc.).
  1. Do you have any personal assets (e.g., jewelry, vehicles, heirlooms, etc.) that you need to include in your estate plan?
    • If so, consider preparing a letter of instruction with your estate planning documents and/or making other arrangements with your heirs to govern the distribution of these assets.

Page 1 of Estate Checklist (click image to download)

Probate & Transfer Issues

Avoiding Probate: Tools like payable on death (POD) or transfer on death (TOD) designations can help assets pass directly to beneficiaries without going through probate, thus simplifying the transfer process.

Establishing Trusts: Consider using trusts, such as revocable living trusts, to maintain greater control over asset distribution and to potentially avoid the probate process entirely.

Tax Considerations: Be proactive about potential estate taxes by employing strategies such as gifting or setting up irrevocable trusts to minimize tax liabilities and maximize inheritance for your heirs.

Questions to Ask:

  1. Do you have any assets or accounts that are jointly owned?
    • If so, consider whether the titling (e.g., JTWROS, TIC, TBE, etc.) is appropriate for you and your joint owner (e.g., spouse, non-spouse, etc.). Be mindful of the potential ramifications joint ownership might have on your estate plan (e.g., effect on step-up in basis, conflictions with your estate documents, etc.).
  2. Do you need to review ways to avoid probate without needing to set up a trust? If so, consider the following:
    • A payable on death (POD) or transfer on death (TOD) account may be considered for any bank or investment accounts you own. 
    • You may name beneficiaries (and contingent beneficiaries) for any qualified investments (e.g., IRA, 401(k), etc.) or insurance products (e.g., annuities, life insurance, etc.) you may have. 
    • Be mindful that naming your “estate” as the beneficiary will cause your assets to go through probate.
    • Depending on the state you live in, you may use a beneficiary deed or TOD affidavit for any real estate assets you own.
  3. Do you wish to both avoid probate and have greater control (e.g., timing of distributions, specific amounts, limitations, etc.) over the distribution of assets to your heirs?
    • If so, consider whether establishing and “funding” a revocable living trust is appropriate. A pour-over will (i.e., “pour” assets back into your trust) may be used to catch any assets missed by the trust, but be mindful that such assets will not avoid probate.

Other Issues

Special Needs Planning: If any heirs have special needs, setting up a special needs trust is crucial to ensure they do not lose eligibility for government assistance due to their inheritance.

Charitable Giving: For those interested in philanthropy, consider integrating charitable giving into your estate plan. This can also provide tax benefits, depending on how the gifts are structured.

State-Specific Laws: Be aware of any state-specific legal issues, like inheritance tax or community property laws, which might affect your estate plan.

Questions to Ask:

  1. Are you interested in leaving a portion of your estate to charity?
    • If so, consider whether pledging tax-inefficient assets (e.g., no step-up in basis, IRD, etc.) to charity would be an optimal choice for your estate planning outcomes. Depending on your specific intentions, a charitable remainder trust (CRT) may also be considered.
  2. Are you concerned about a federal/state estate tax liability?
    • If so, consider ways you might “freeze” or remove certain assets from your estate by using an irrevocable trust (e.g., ILIT, QPRT, A/B trust planning, DSUE portability, etc.). Implementing gifting strategies (e.g., utilizing the annual exclusion for gifts, unlimited gifting exclusion for education/medical expenses, etc.) may also be considered.
  3. Do you have any heirs who have special needs?
    • If so, consider the extent to which their inclusion in your estate plan may affect any public assistance they are receiving for their disability. Determine whether a special needs trust (SNT) may be appropriate for their situation.

Page 2 of Estate checklist (click image to download)


Estate planning is a deeply personal and complex process that should be regularly reviewed and updated as your life circumstances change. Work with a qualified estate planning attorney to ensure that your plan meets all legal requirements of your state and truly reflects your wishes.

Download your free checklist guide here.