Estate Planning is a necessary step in your financial planning process to protect your loved ones. Depending on the amount of your assets and other factors like ownership in a business, estate planning can be simple.
Will
Your first, and most basic, step is to create a will. This can include:
- Deciding who gets your property and cares for minor children.
- Helping loved ones avoid delays and court costs after you die.
- Specifying health care wishes and who can carry them out.
- Naming who handles your financial affairs if you can’t.
Passing away without a will means that a person’s assets will be distributed according to state law. This differs between states, but most of the estate will go to the spouse and equal shares to the children. This may seem fair, but you’re still leaving your assets without a plan or any consideration on your part.
Considerations
A complete estate plan not only considers your belongings and property but also your relatives and loved ones. Plan ahead! You can minimize future stress on those closest to you and help ensure your wishes are carried out. LegalZoom recommends locating insurance policies; statements for financial accounts such as investments; and documents such as mortgages, deeds, and titles.
Tax Exemption Options
A recent development in estate planning involves the federal estate and gift tax exemption. Under the One Big Beautiful Bill Act, the federal estate and gift tax exemption is set at $15 million per individual ($30 millions per married couple) for 2026. This new level is permanent and will be indexed for inflation in future years.
Individuals can give away during their lifetime, or leave at death, up to $15 million. And this is without incurring any federal estate or gift tax. This is a large increase from prior years. And removes the uncertainty around the previous “sunset” provision, which had threatened to cut the exemption roughly in half in 2026. According to the IRS, the annual gift tax exclusion also remains at $19,000 per recipient in 2026 ($38,000 for married couples giving jointly).
Even with a higher exemption, those with significant or complex assets, including business ownership, real estate, or multi-generational wealth, should still work with an advisor to make sure their plan is optimized for the current rules.
Life Insurance
As you put your estate plan in place, you may also want to consider life insurance. Estate planning is about planning for the future after you pass away, but a premature death can upset carefully laid plans. Younger adults in particular have taken notice: the 2025 Insurance Barometer Study from LIMRA and Life Happens finds that 54 million Gen Z and Millennial adults recognize their need for life insurance, yet they remain the least likely to believe they have adequate coverage. Younger adults have more years of income to protect, are more likely to have children, and may still carry mortgages or student loans, making life insurance an important piece of any estate plan.
Final Thoughts
No one is pretending that estate planning is an easy conversation to have. Why do I need to think about this now? Why is this so important? Here’s why:
Because you have minor children…
Parents who neglect to put an estate plan in place are leaving the ultimate choice of guardian up to a probate judge and inviting family disputes. They’re also giving up the chance to create a trust to hold the kids’ inheritance. That means taking the risk that a child will receive a check for their entire legacy as an eighteen-year-old high school senior.
Because you have a child or grandchild with special needs…
Even a small inheritance, without the protection of a special needs trust, can ruin the heir’s eligibility for SSI, Medicaid, or other valuable government benefits, and result in the rapid depletion of assets.
Because you want one child to get more than the other…
Intestacy (dying without a will) means that a person’s assets will be distributed under the scheme determined by state law. This differs from state to state, but in general most of the estate will go to the spouse and in equal shares to the children. If you want anything other than that default distribution, you must plan for that in advance.
Because you’re in a second marriage…
Couples who have children from previous relationships should consider how assets will be distributed among the surviving spouse and both spouses’ kids. Estate planning techniques are available to ensure that the surviving spouse is taken care of, and the interests of the children are protected.
Barnum Financial Group can help answer any questions you may have surrounding estate planning. Your first step is speaking with a financial professional today.
