It took about a decade for a woman to list her late mother’s home for sale, with long and costly delays created by a disagreement between siblings. In a recent article from Investopedia, “How to Protect Your Family and Wealth with Smart Estate Planning,” she readily admits the ten-year mess could have been avoided if her mother had simply gotten an estate plan done.
The lesson for others? “People: Handle your business, get things in, put things in a proper place so that those who come behind you don’t have to deal with it.”
Unfortunately, this is not an uncommon situation. The number of people with a will has actually declined from 2022 to 2025. Without an estate plan in place, your assets will take a long, drawn-out journey before they reach recipients, and may not go to those of your choosing.
Wills and trusts are key components of an estate plan. The will is a document instructing how you want your assets to be distributed upon death. It is also used to outline custody arrangements for minor children, appoints an executor to oversee the estate and fulfill your final wishes. You may also need a trust, a legal structure to own assets with instructions on your wishes for the assets’ management and distribution. Think of it this way: wills are for asset distribution after you die, and trusts work while you’re living and beyond.
Estate plans include Power of Attorney and Healthcare Directives, which are also legal documents used while you are living. At its simplest, a Power of Attorney names a person to make decisions for you if you become incapacitated. A POA can be simple, or it can be tailored for your situation. For instance, you may want your brother to be able to pay bills but not to make charitable donations. A Healthcare Proxy allows another person to be involved in your medical care.
Beneficiary designations are often overlooked. This can lead to unintended consequences. Every account you own with a beneficiary designation should be reviewed to make sure it reflects your wishes. Accounts with beneficiary designations include investments, retirement and bank accounts. Insurance policies also have beneficiary designations.
Beneficiary designations supersede any language in your will, so you want to be sure they are correct. If you divorce and your ex-spouse is still your beneficiary, they will still receive the asset, no matter what your will or divorce stipulation says.
Trusts are used to pass wealth on to others and for asset protection. There are many different types of trusts. However, they fall into two basic categories: Revocable Trusts and Irrevocable Trusts. The Revocable Trust allows you—the grantor—to have full control of the assets in the trust and make any changes to the trust whenever you wish. The trade-off for the control is the trust is its contents are not protected from creditors or taxes. Properly prepared, revocable trusts become irrevocable after you die. However, if asset protection is the goal, you’ll want an irrevocable trust.
Irrevocable trusts are used to shield assets for many purposes, Medicaid eligibility chief among them. The grantor may not be the trustee or beneficiary. However, the trust is secured against creditors or legal claims. Because assets in an irrevocable trust are not countable for Medicaid purposes, these trusts are used for Medicaid planning.
Your estate planning attorney will help create an estate plan to protect you while you are living, plan for incapacity and ensure that the right people receive your bequests after you have passed. It’s a gift for those you love, sparing them from disagreements created when each thinks they know what you would have wanted.
Reference: Investopedia (April 1, 2025) “How to Protect Your Family and Wealth With Smart Estate Planning”