Introduction to Estate Planning

By Dina Megretskaia, CFP®, EA, JD

Wealth Manager, Principal

September 30, 2022

What is an estate plan and why do you need one? An estate plan gives directions to your family, friends, and loved ones about what should happen to you and your assets at the time of your death, or if you become incapacitated.

Through the various legal documents your attorney creates, an estate plan addresses who should be guardian for your minor children, who should make medical decisions on your behalf when you can’t, and who your assets should pass to and support, as well as who you entrust to carry out these plans after your death.

Undertaking an estate plan can be overwhelming and may require difficult conversations. But the comfort of having a completed (and legally binding) plan is often an overwhelming relief!

As you start your estate planning process, please refer to the considerations and legal documents outlined below.

What’s involved in creating an estate plan?

To craft an estate plan, your attorney will need the full picture of your assets: real estate, retirement accounts, taxable brokerage accounts, cash, and other property.

Your attorney will also need to know about the important people in your life and how you would like to provide for them. For example, you may want certain family or friends to receive your assets outright after your death, but provide protections (against creditors, divorcing spouses, or other influences) for others by using a vehicle such as a trust. Or, if you live in a state with inheritance or estate tax, or if your estate will be subject to federal estate tax, you may want to make choices in your estate plan to reduce your taxes.

What are common documents in an estate plan, and what do they do?


  • Outlines who will receive any assets that are part of your estate.
  • Names the person who will be the executor of the estate to ensure assets are distributed according to your wishes.
  • Indicates who you nominate as the guardian(s) for your minor child(ren).
  • Importantly, does not affect retirement accounts, life insurance, or jointly titled assets. These assets pass by title or according to the beneficiary designations listed.

Modera tip: The guardian does NOT need to be a financial whiz, rather someone who cares for your kid(s) and shares your values.


Healthcare Power of Attorney /Living Will / Healthcare Proxy

  • Designates who will make medical decisions when you are incapacitated.
  • Details your wishes for life-sustaining treatments you would (or would not) want to receive.

Modera tip: Certain states allow you to legally bind your agent to follow your wishes, whereas others do not.


HIPAA Authorization

  • Designates a healthcare agent(s).
  • Gives consent to share your medical information that would otherwise be protected by privacy laws with those not listed as your designated healthcare agent(s).

Modera tip: Some hospitals may also have their own forms they prefer patients to fill out.


Financial Power of Attorney

  • Designates someone to have authority to make financial decisions on your behalf (acting in a fiduciary duty).

Modera tip: A durable power of attorney is in effect as soon as it’s signed and does not require incapacity.


Revocable (Living) Trust

  • Helps avoid potentially costly and public probate of your assets, and may have estate tax benefits.
  • Importantly, enables you to maintain control of assets during your lifetime, but provides a set of instructions for how assets are to be distributed after you die.
  • Appoints a trustee(s) (who can be an individual or corporation) to distribute income or principal to the beneficiary of a trust according to your instructions.

Modera tip: Unless assets are transferred to your revocable trust during your lifetime, they will go through probate.


Time, life changes, and moving to another state are all triggers for updating your estate plan. Your circumstances, net worth, and wishes will change over time, as will the circumstances of your assigned executor and those inheriting under your plan. With all of that in mind, once finalized, your estate plan should be reviewed every 5-7 years.

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