Creating an estate strategy might seem like something only the wealthy need to worry about, but in reality, it’s an essential part of financial planning for everyone. An effective estate strategy helps ensure that your wishes are honored, your loved ones are protected, and that your assets are distributed in the most efficient way possible after you’re gone.

To help jumpstart your estate-planning process, Brumbaugh Wealth Management has compiled five guiding points that break down the key components of a comprehensive estate strategy, explaining why tools like living trusts and power of attorney are so valuable. By planning ahead, you can create peace of mind for yourself and provide clarity and support for those you care about most.

1: Probate

Probate is the legal process that wraps up a person’s legal and financial affairs after their death.

Probate can be costly and easily take months or years, depending on the state. While no estate strategy can completely eliminate the risk of extensive probate, managing the probate process may be possible with a valid will and assets that avoid probate. [1]

Some assets that avoid probate include:

• Property held in a trust.
• Jointly held property that isn’t common property.
• Death benefits from insurance policies.
• Property given away before you die.
• Assets in a pay-on-death account.
• Retirement accounts with a named beneficiary.

2: Living Wills

These aren’t to do with what happens after you die, but what to do before you die.

Wills outline instructions on how to handle difficult decisions regarding your estate. Despite the importance of this document, only 32 percent of Americans have one. The number-one cited reason for not having a will is procrastination. [2]

3: Tax Exemption Strategies

In 2024, the estate and gift tax exemption is $13.61 million. [3] Potentially hundreds of thousands of additional American households can take advantage of these strategies, passing on some of or all of their estate free of estate taxes.

Less than one out of every 1,000 estates will exceed the exemption. [4]

4: Living Trusts

Created and funded while you are alive, living trusts are composed of assets you choose to put into them. Managed by a trustee (usually you), the assets are structured to pass to a beneficiary, or beneficiaries, automatically upon your death, much like a will. [5]

5: Power of Attorney

Power of Attorney is a written authorization empowering a person to execute personal and legal matters on your behalf. A good strategy may be to pick a person who either has some experience in these fields or has the necessary qualities to handle these decisions. This is often a spouse or adult child.

A Durable Power of Attorney allows that person to act on your behalf, even if you are incapacitated or otherwise unable to make decisions.

Learn more at Brumbaugh Wealth Management. With its collective experience of almost 100 years, Brumbaugh Wealth can help you take charge of your financial situation by developing a comprehensive vision that encompasses your short- and long-term objectives.

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1. Investopedia.com, December 18, 2023.
2. Caring.com, 2024.
3. IRS.gov, 2024. The current estate tax exemption limit is scheduled to expire December 31, 2025.
4. ITEP.org, December 7, 2023.
5. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider using a professional who is familiar with the rules and regulations.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.