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A Comprehensive Guide to Estate Planning Thumbnail

A Comprehensive Guide to Estate Planning

You've worked hard throughout your life, accumulating assets, building a legacy, and nurturing relationships with loved ones. But what happens to all of it when you're no longer here? That's where estate planning comes in—a roadmap for the future that ensures your wishes are honored, your loved ones are cared for, and your legacy endures.

In this post, we'll cover everything you need to know about estate planning, from understanding your assets and key legal documents to the importance of reviewing your estate plan, especially when life throws unexpected curveballs. So, whether you're just beginning to consider your estate plan or you're due for a check-up, you're in the right place. Let's navigate this important aspect of financial wellness together.

What is Estate Planning?

Estate planning might sound like something only the wealthy or elderly need to worry about, but in reality, it's something everyone should consider, regardless of their age or financial status. Estate planning is about making decisions now to protect yourself, your assets, and your family in the future. It's like creating a safety net—a plan that kicks into action if something unexpected happens.

So, what exactly does estate planning involve? Well, it's not just about writing a will (although that's certainly an important part). It also involves making choices about who will take care of your kids or pets,  who will make decisions for you if you're unable to do so, how your assets will be distributed, and how to minimize taxes and expenses.

The Benefits of Estate Planning

First and foremost, estate planning allows you to protect what's yours and ensure that your assets are distributed according to your wishes when you’re gone, not left up to chance or the whims of the legal system. But estate planning isn't just about divvying up your stuff—it's also about saving your loved ones time, money, and headaches down the road. By minimizing estate taxes and administrative expenses, you can maximize the amount that goes to your heirs rather than handing your assets over to a probate court or other government agencies.

Speaking of heirs, estate planning lets you provide for your loved ones in more ways than one. Whether it's making sure your spouse can stay in the family home, setting aside funds for your kids' education, or providing for a family member with special needs, a well-crafted estate plan can help guarantee that your loved ones are taken care of, no matter what.

Perhaps one of the biggest benefits of estate planning is the ability to avoid nasty family disputes. By clearly laying out your wishes in advance, you can help prevent disagreements and misunderstandings among your heirs. This can help maintain family harmony and guide your loved ones in the period after you’ve passed.

Ultimately, estate planning offers you peace of mind. Once you’ve put your plan together, you’ll rest easy knowing you’ve done everything you can to get your affairs in order and set the people you love up for success once you’re gone.

Understanding Your Assets

Your estate isn't just the big stuff like your house and savings—it includes everything you own, from your car and jewelry to your social media accounts and family heirlooms. Knowing what's in your estate is the first step in figuring out how to protect it.

So, let's take a closer look at the different types of assets you might have:

  • Real Estate: This includes your home, any rental properties you own, and any land you might have.
  • Investments: Think stocks, bonds, mutual funds, and other securities.
  • Retirement Accounts: This includes things like your 401(k), IRA, or pension plan.
  • Personal Property: This encompasses everything from your furniture and your clothing to your artwork and your collectibles.
  • Business Interests: If you own a business, whether it's a small family-run operation or a large corporation, this is considered part of your estate.
  • Digital Assets: In today's digital age, it's important to consider things like your email accounts, social media profiles, and online banking accounts.

Now that you've figured out what's in your estate, it's time to consider how each asset is handled in estate planning. Some assets, like retirement accounts and life insurance policies, pass outside of probate and are distributed directly to your beneficiaries. Others, like real estate and personal property, may need to go through probate before they can be distributed.

Understanding how each asset is treated in estate planning is key to ensuring that your wishes are carried out, your loved ones are provided for, and your legacy is in good hands.

Key Players in Estate Planning

When navigating the estate planning process, you’ll encounter a number of titles and faces. Here are just a few of the key players you’ll need to know:


This is the person responsible for carrying out your wishes after you're gone, whether it's distributing your assets according to your will or making sure your bills are paid and your affairs are in order. Choosing the right executor is crucial, as they'll be tasked with handling some pretty important stuff.


If you've set up a trust as part of your estate plan, the trustee is responsible for managing the trust assets and distributing them to your beneficiaries according to the terms of the trust. Like the executor, this person needs to be someone you really trust (pun intended).


If you have minor children, naming a guardian is one of the most important decisions you'll make as part of your estate plan. This is the person who will take care of your kids if something happens to you and your spouse, so it's crucial to choose someone who shares your values and parenting style.


These are the people who will inherit your assets after you're gone. This can be your spouse, your children, or even a favorite charity.

Depending on your specific circumstances, other parties may be involved in your estate plan. But these are the four most important roles commonly involved in estate planning.

Legal Documents and Tools Used in Estate Planning

Okay, we’ve thrown a lot at you so far, and this next part—understanding the common legal documents and tools used in estate planning—might seem especially complicated. But don’t worry! We’ll break it down step-by-step.

Last Will and Testament

This is perhaps the most well-known estate planning document, and for good reason. Your will is where you lay out your wishes for how your assets should be distributed after you're gone. It's also where you can name guardians for your minor children and appoint an executor to carry out your wishes.


Trusts come in many shapes and sizes, but they all have one thing in common: they allow you to hold and manage assets for the benefit of yourself or others. Trusts can be a powerful tool for avoiding probate, maintaining privacy, and providing flexibility and control over asset distribution.

Power of Attorney

This is a legal document that allows you to appoint someone to make financial or healthcare decisions on your behalf if you become unable to do so yourself. Having a power of attorney in place can provide peace of mind knowing that someone you trust will be able to step in and handle your affairs if the need arises.

Advance Directives

Advance directives are documents that allow you to outline your wishes for end-of-life care and appoint someone to make medical decisions on your behalf if you become unable to communicate with a doctor. They can provide clarity and guidance for your loved ones during difficult times.

Beneficiary Designations

These forms allow you to designate who will receive certain assets when you pass away, such as life insurance policies and retirement accounts. Keeping your beneficiary designations up to date is crucial for ensuring that your assets are distributed according to your wishes.

Minimizing Taxes and Costs

Raise your hand if you love paying unnecessary taxes! Huh, that’s weird. I didn’t see any hands go up . . . All joking aside, nobody likes paying taxes or unnecessary expenses, and when it comes to estate planning, there are ways to minimize both. Here are two strategies that can help keep more of your hard-earned assets in the hands of your loved ones:

Estate Taxes

Depending on the size of your estate, you may be subject to federal and/or state estate taxes. Fortunately, there are strategies for minimizing or even avoiding these taxes altogether. From making strategic gifts during your lifetime to setting up trusts to hold and manage your assets, there are plenty of options for reducing your tax burden.

It’s important to remember that each state has its own rules and regulations regarding estate taxes. Oregon residents can learn more here about how estate taxes are handled in their state, and Washington residents can learn more here.


Probate is the legal process through which your assets are distributed after you pass away. It can be time-consuming, expensive, and public, but there are ways to avoid it. By using tools like trusts and beneficiary designations, you can ensure that your assets pass directly to your heirs without going through probate.

Special Considerations for Estate Planning

When it comes to estate planning, there are some special cases that require a little extra attention. Let's take a closer look at a few of these special considerations:

Blended Families

If you're part of a blended family, estate planning can be a bit more complicated. You may have children from previous relationships, stepchildren, and ex-spouses to consider, and navigating these dynamics can be challenging. But with the right guidance, you can create a plan that’s thorough and makes sure all the important people in your life are taken care of. Check out this AARP article for some helpful tips on how to avoid crucial mistakes when planning your estate with a blended family.

Business Succession Planning

If you own a business, planning for its future after you're gone is super important. You'll need to think about who will take over, how ownership will be transferred, and how to minimize taxes and expenses along the way. With some careful planning, you can ensure that your business continues to thrive long after you're gone.

Charitable Giving

If you're passionate about supporting a particular cause or organization, incorporating charitable giving into your estate plan can be incredibly rewarding. Whether you set up a charitable trust, make a bequest in your will, or donate assets like stocks or real estate, there are plenty of ways to leave a lasting impact on the causes you care about.

We love working with our clients to empower them to give and make an even bigger impact on the causes and institutions most dear to them. To learn more, visit fidelitycharitable.org or read our blog post about how you can leverage your charitable giving to make a greater difference.

The Importance of Reviewing Your Estate Plan Regularly

Creating an estate plan is a great first step, but it's not a one-and-done deal. Life is constantly changing; your estate plan should, too. That's why it's crucial to regularly review and update your plan to ensure that it still reflects your wishes and meets your needs.

Obviously, you should update your estate plan whenever there's a significant change in your life. Whether it's getting married, getting divorced, having children, or experiencing a change in your financial situation, any major life event should prompt a review of your estate plan.

But even if your life is relatively stable, it's still a good idea to review your estate plan regularly. Laws and regulations can change over time, and what may have been a perfectly valid estate planning strategy a few years ago may no longer be the best option today. By staying proactive and keeping your plan up to date, you can ensure that it continues to serve your needs and protect your loved ones, no matter what the future holds.

Let’s Work Together to Create an Estate Plan That’s Right for You

Here at Encompass Wealth Advisors, we have a saying: “If you don’t have an estate plan in place, the State has one for you . . . and you may not like it!”

We know that estate planning can be overwhelming, but it’s so important. That's why we're here to guide you through the process. Whether you're just starting to think about your estate plan or you're ready to make updates to an existing plan, our team of experienced advisors is here to help.

We'll start by getting to know you and your goals, taking the time to understand your unique circumstances and priorities. From there, we'll work with you to develop a comprehensive estate plan that meets your needs and reflects your wishes, now and in the future.

But our support doesn't stop there. Once your estate plan is in place, we'll continue to be here for you, providing guidance as your life evolves and your needs change. Whether it's reviewing and updating your plan on a regular basis or providing advice and assistance during times of transition, you can count on us to be there for you every step of the way.

So why wait? Reach out to our team today and take the first step toward protecting your legacy and providing for your loved ones.