Estate-Planning Essentials By: Mathew BarberAIF®

Estate planning, in one form or another, is needed by everybody.  Whether you are single, married or divorced; whether you have six children or no children; whether you have $10 to your name or $10 billion to your name, you need some form of estate planning. Yet it is often consciously ignored.  As a consultant who talks to people on a daily basis about their specific financial situations, I find that this is normally due to a lack of knowledge.  No one likes to talk about what happens if they were to be medically incapacitated or prematurely pass away.  Therefore, whenever the topics come up, whether it is in an educational manner or not, people shy away and don’t learn the lessons that can severely impact their heirs, loved ones or assets in such a situation.


To start off, we should define what exactly a person’s estate is.  A person’s estate is, simply put, all the assets and property that a person holds at death.  The passing of these assets and property to heirs happens by validating a will in a process called probate.  If there is no defined will, then the probate court will follow the rules of intestacy for the state of residence for the deceased.  In other words, if you do not have a plan for your assets, the state that you live in has one for you, regardless of your wishes or the wishes of your loved ones.  By doing a little bit of planning ahead of time, you can make sure that any assets or property get to the correct persons or entities; you can minimize the number of assets in your estate that will decrease the cost of probating the estate and limit the assets that prospective creditors can come after in the event of liabilities still being outstanding. 


Below I list and quickly review five easy estate-planning must-have’s.


  1. Beneficiary designations- This is where you can list primary and contingent beneficiaries on your financial accounts.  You can have multiple of either designation.  The contingent beneficiary will only receive benefits if the primary beneficiaries have predeceased the owner of the account.  It is a best practice to review your accounts every couple of years to make sure that your beneficiaries are up to date with any planning that you have done.  Most people are unaware that nonretirement and life insurance accounts, like saving accounts, can have a transfer on death designation added to them.  These designations will act just like the traditional beneficiaries that we are used to.  They lower the amount of assets in the estate and allow much faster access to the funds, which can be very helpful.

  2. Will- This document will provide a roadmap for how your assets and physical property are distributed.  An executor will need to be assigned when the will is setup.  The executor is the person(s) that executes the instructions of the will and only has power after the death of the owner.
  3. Durable power of attorney- This legal document designates an agent to act on your behalf in a financial capacity.  There are a few different kinds of agents, the durable power of attorney is mentioned here due to its ability to withstand the incapacity of the grantor.  In other words, if at some point in the future, an individual loses the mental capacity to be able to make decisions, the durable power of attorney can continue to act on the behalf of the individual. The agent that is assigned has immediate authority with all authorized actions, and the power only terminates at the death of the individual or if the power of attorney document is changed/updated.

  4. Health care proxy- The health care proxy follows a lot of the same rules as the power of attorney, and, in fact, in some jurisdictions, it is referred to as a health care power of attorney.  However, the agent is only allowed to make health care related decisions when the individual is unable to make the decisions for themselves. 

  5. Living will- Also known as the advanced health care directive.  This is a very important document, which lays out the health care wishes of the individual to its agent.  By completing this along with the health care proxy an individual is comprehensively communicating how they want their care to be given and by whom.  It helps families and family members to not have to make very difficult decisions in the most stressful of times.


To help you pull all of this together, I advise all of my direct contacts to meet with an estate-planning attorney; in fact, you should probably interview two or three.  This is a very important part of planning and without it you are taking a chance with all the saving, and, preparation you have done.  A good estate-planning attorney will be able to ask meaningful questions and help guide you towards a plan that works for you.  If you are looking for an accredited attorney that specializes in this field, you can search for one at www.naela.org.  The planning and accumulation that you have done up to this point have all been for you; this planning is for your family, heirs and loved ones.

Mathew Barber

Mathew is a Senior Consultant at Westminster Consulting, where he is responsible for the firm’s personal advice and employee education programs.

Mathew leads the firm’s participant education and advice initiative, Westminster Workplace Solutions. Additionally, he develops and promotes Westminster...

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