Ultimate Guide to Estate Planning

Ultimate Guide to Estate Planning featured image

Over the next decade, approximately $15.4 trillion dollars will be passed from one generation to their heirs.

What’s your slice of that $15.8 trillion?

Do you have an estate plan in place to make sure your assets are transferred according to your wishes?

These days people tend to live longer and they have more complicated lives and financial situations. From blended families with kids from different marriages to cohabitating couples who never marry, and a wide variety and location of physical and digital assets, estate planning is perhaps more crucial now than ever before.

55% of Americans die without an estate plan

At The First, we understand the stakes that come with estate planning. It isn’t just about money—plenty of emotion is involved too. That’s why our experienced, Bucks County-based Wealth Management team is here to help you through the estate planning process. Our personalized service and industry expertise have made us a trusted resource for generations of local families. If you have questions as you read our estate planning guide, feel free to give our Wealth Management team a call.

What is Estate Planning?

Although estate planning has been a popular theme in literature for centuries, from Jane Austen and Charles Dickens to contemporary writers, it isn’t that difficult to explain. Simply put, estate planning is the process of analyzing your current situation, identifying goals for the future, and implementing plans for reaching those goals.

Although the concept of estate planning is easy to grasp, it can be complicated to carry out. That’s why you need to work with an attorney who specializes in estate planning, as well as a professional fiduciary and financial planner.

Now, let’s look at the different situations and concerns that may arise during the estate planning process:

  • Envisioning your desired future: You might start out with a statement like “I want my family to be provided for when I’m no longer here.” Maybe you have a desire to leave a legacy, such as a scholarship or charitable foundation.
  • Setting goals: Once you can picture the ways you’d like to care for your family and the world after your death, your financial planner will help you turn your vision into concrete goals. There are basically three categories for asset-related goals: growth, preservation, and protection. For example, tax minimization, succession planning, and the protection of minor children and other dependents.
  • Family businesses: If you own a business, you’ll need to decide whether to sell or pass on the business upon your death, and how ownership will be distributed.
  • Inheritances for children: At what age do you think your child(ren) will be responsible enough to receive their full inheritance?
  • Legal Custody and Guardianship: If you currently have minor children, you need to decide who will care for them in the event of your death or incapacitation. You also need to allocate resources accordingly so that your children and their guardians will be financially provided for.
  • Elderly parents: If you are caring for ailing or elderly parents, you want to have a plan in place in case your death precedes them.

1/4 of people haven't discussed an estate plan with their families

Who Needs an Estate Plan?

The short answer is everyone, but especially if you are:

  • A high net worth individual
  • A business owner
  • A parent of minor children
  • Legally bound to financially provide for certain people
  • In a long-term cohabitating relationship
  • Recently married
  • Separated but not yet divorced

If you die without a valid will, your spouse or children may have to go through legal and administrative hassles to receive their rightful inheritance. And if you pass on without a valid will and no legal heirs, the government gets to decide what to do with your assets.

So, while the estate planning process may be uncomfortable or even painful at times, it will save your loved ones more suffering later on.

The positive repercussions of estate planning can extend for generations. For example, what if you leave everything to your spouse, who then re-marries and forms a blended family of children from different relationships? Creating a trust in your will, for example, could provide financial support to your surviving spouse in their lifetime, while still preserving your assets for your children.

Keeping your estate plan up to date is important!

This is the reason estate planning makes for a good plot device in novels. Without airtight arrangements, so much can go wrong or at least not as you expected. You may never be able to please everyone with your estate planning decisions, but that’s not the point. Estate planning gives you control over your assets in your lifetime and the way they are distributed afterward.

When Should I Start Estate Planning?

Many people don’t think much about estate planning until they have children. Other big life events, such as marriage or divorce, a new job, or the death of a loved one, can also trigger thoughts of making or changing a will and beneficiaries. The general answer is that isn’t never too early to start.

For example, a recent college graduate starting her first job will need to name a beneficiary for her 401(k) account and life insurance policy. Let’s say she makes her parents the beneficiary. A few years later she marries. Does she make her spouse the beneficiary or forget to change things? All of this is estate planning and you can see that it’s not a “one and done” type of event but a process that will likely need updating over the course of your lifetime.

Whatever stage of life you’re in, the best first step toward estate planning is to make a list of your assets and liabilities. This document, known as a Personal Financial Statement, will prepare you for the next step of goal-setting.

47% of Americans haven't gotten around to estate planning

Set Goals for your Financial Life and Family Situation

At the heart of estate planning is the matching of cash requirements with cash availability to best meet your goals. For example, if all of your assets are in investments, you will also need to have some cash on hand for your family’s immediate needs and the funeral.

Here are some examples of popular estate planning considerations. You can brainstorm your own or sit down with your financial advisor to identify the estate planning objectives most important to you.

  • Make sure your spouse/partner and children will be provided for to the best of your ability.
  • Hand down certain assets such as a business, cottage, keepsake or other family heirloom.
  • Leave funds to educate and financially support your children until they can manage on their own.
  • Protect adult children once they are on their own.
  • Preserve your assets.
  • Reduce or eliminate taxes.
  • Buy life insurance to pay liabilities, provide flexibility, and increase the size of the estate.
  • Transfer assets into the hands of the right people.
  • Protect your assets from the wrong people.

Check out our article on “The 3 Ws of Estate Planning” for more goal inspiration.

Draw up a Last Will and Testament

Your will is the cornerstone of your estate plan. When prepared correctly, it’s a legally binding document that dictates the individuals and/or institutions who should receive your assets after your death.

This is also the place to name guardians for your minor children and the executor of your estate. You can name an individual you know or an institution like The First to serve as executor. Serving as executor comes with a lot of responsibility, so many people like to spare loved ones the burden while they are also grieving.

The only limitation is your beneficiary designations on financial accounts. That’s why it’s so important to update these designations after a life change like marriage, divorce, or death. If you don’t your beneficiary designation will supercede any conflicting instructions in your will.

What is a living will?

In addition to a regular will, it’s a good idea to have a living will. This legal document expresses your desires for medical care in the event of incapacitation. For example, you can decide if you want to establish a “Do Not Resuscitate” order.

You can also designate a “healthcare proxy” under a healthcare power of attorney. This is the person you want to make healthcare decisions for you if you are incapacitated.

Choose a healthcare power of attorney when you draft your living will


There are two primary purposes of a trust. First, to control the distribution of assets upon your death (for example, bequeathing the interest from a trust to a surviving spouse while the principal is held for distribution to the children upon the spouse’s death).

Trusts can also help minimize gift and estate taxes. In 2020, gifts of more than $15,000 in a single year to an individual would require tax reporting and may incur tax liability. The Federal Estate Tax exemption was raised to $11.18 million with the 2017 Tax Cuts and Jobs Act, but it could revert back to $5 million in 2026 if Congress doesn’t permanently adopt the new limit.

Put Together an Estate Planning Team

Now that you have a better understanding of the estate planning process, it’s time to put together a team of skilled and experienced professionals. Finding the right people for the right roles and considering your family dynamics is crucial to the success of your estate plan. Your estate planning team will help not only during your life but also after your death.

  • Financial Advisor: You want to find a person you respect and can trust. Your financial advisor will gather information and help oversee your estate planning goals. They will also educate and consult on the financial aspects of your plan, including the preservation and growth of your estate.
  • Attorney: This member of your estate planning team will provide guidance on what can and cannot be done from a legal perspective. The attorney is also responsible for drafting, executing, and updating legal documents and contracts.
  • CPA or Tax Specialist: Consults on the income tax aspects of your estate plan.

For advice on finding a financial advisor, check out our article with “10 Questions to Ask Your Financial Advisor.”

Why Trust Your Estate Planning Needs to The First?

Just as doctors take the Hippocratic Oath, the Wealth Management team at The First serves as your fiduciary, meaning we are required to act in your best interest with every decision we make. All of our services and products are designed to offer you maximum value with no hidden fees.

To learn more about estate planning and how we can help you, contact our Wealth Management team today.

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