The idea of estate planning may sound daunting at first, but it doesn’t have to be if you understand not just how to do it, but why it’s so important.
If you are a retiree or an older couple, then you have probably heard more and more about how important estate planning is, with each year that passes. What you might not know is how estate planning does not just have to be about practical affairs, but can instead be a great way to distil and establish your legacy.
In this “Estate Planning for Dummies” guide, we will provide seven free, step-by-step tips to get you started on your estate planning journey. We will also offer a contextualised, meaning-based perspective you can use to connect with estate planning on an emotional level. We have included this because we believe that when you operate from a place of purpose, the finished result will be stronger for it, from the foundations all the way to the final touches.
Our hope is that you finish this guide with a smile on your face: when you can place yourself in a bigger story, you can rejoice knowing that there are plenty more happy endings on the way.
Why Estate Planning Matters for Retirees and Older Couples
Let’s get one thing clear straight out of the gates: estate planning is not primarily about money. Why? Because life isn’t just about money! Money is simply a store of value, a container waiting to express a greater purpose.
It’s easy to forget this in a culture that often prioritises external markers of wealth to measure success, but it’s so important to remember when it comes to estate planning. Once you’re gone, the money you leave behind almost becomes the least important part of the equation.
The truth is that you are not what you have; your worth is not determined by the quantity of your belongings or bank balance. Instead, the stories and values behind those things — how you came across them, what memories they have inspired, and who they remind you of — are what really count. That kind of thinking is what undergirds the best version of estate planning.
Impact over Averages
As the slightly morbid adage goes, ‘death is the great equalizer’… but that does not mean you have to succumb to the societal average! The way you approach estate planning can mark your life as one of impact and blessing for generations to come.
The key here is the word “impact.” Impact is all about the mark you leave on the world around you; namely, your loved ones, and the causes you care most about. If you start the estate planning process with that end in mind, you can transform estate planning from being a checklist-based chore to a resonating roadmap that will guide those you care about long after you are have left.
Faith over Fear
Feel free to skip ahead to the full “Estate Planning for Dummies” guide if feel like you’ve got the idea already, but allow us to run through this estate planning foundation from just one more angle: faith versus fear. Faith is all about what could be: envisioning a brighter future in the world. Fear is all about lack and comparison, and caves inward: “How do I protect what I have?”
It’s easy to fall into a fear-based mindset when it comes to estate planning. Please trust us when we say we get it: thinking about what happens when you pass away is not an easy thing to do. But that does not mean it should be a process devoid of hope or vision for how the world could change with your say-so.
Why not pause for a moment, close your eyes, and let your imagination fill with images and feelings of those you love, and the causes you care about? And as you do, you could mindfully consider how the proceeds from your estate could make a real difference to those people and movements…
Now we are ready to move on to the main part of this guide.
Effective Estate Planning for Dummies: 7 Free Tips
You don’t need to hire expensive consultants or buy costly books to start your estate planning process. Here are seven practical, step-by-step tips to help you create a solid plan.
1. Create a Will
After the mindset piece we addressed above, your will is the second foundation of your estate plan. It outlines how you want your assets distributed and who will manage your estate. Drafting a will doesn’t have to be complicated. There are many free resources available online to help you create a legally binding document (like this one).
A well-crafted will ensures that what you really care about — your express wishes — are honoured, and reduces the likelihood of legal challenges. In your will, it is crucial that you are specific about your assets and beneficiaries to avoid confusion. You will also need to regularly review and update your will to reflect any changes in your circumstances or wishes (more on that later).
2. Designate Beneficiaries
Beneficiaries are the individuals or entities who will receive your assets — the people you love and care about, and who you hope will uphold your legacy after you are gone. They are the main reason to press through the estate planning process, so make sure you remember them on paper, not just in your heart!
The first step here is to ensure that all your accounts and policies have designated beneficiaries. Financial vehicles to focus on include retirement accounts, insurance policies, and any other financial instruments in your name.
It goes without saying that you should keep your beneficiary designations up to date, rather than assuming they are one-and-done at the first time of asking. It’s one of those things where you have to take the “Nike” approach and just do it. Just look at those records and make sure they list the right people.
That could be especially pertinent after specific life events such as marriage, divorce, or the birth of a child — if you remarried, how do you think your new husband or wife would feel knowing that your previous spouse remains your beneficiary?! (I’m guessing they wouldn’t be thrilled.)
And here’s a bonus insight for Pennsylvania residents from our President, Greg Liszka:
“If you have no beneficiaries in the State of Pennsylvania, then by default your spouse will only be a 50% beneficiary; the other 50% automatically goes to your children. This law was designed to maximise the amount of taxes you have to pay: you can pass assets to your spouse with no inheritance, but for children, there’s a 4.5% inheritance tax.”
So that is yet another reason to regularly review your designations — to make sure your assets are heading where they should be going, rather than being diverted elsewhere without your knowledge!
3. Set Up Trusts
Speaking of making sure your assets are heading where they should be…
Trusts can be powerful tools in estate planning. They provide a way to manage your assets and protect them from certain legal challenges. Trusts can also help manage your estate more efficiently and privately than a will alone.
There are different types of trusts, each serving different purposes. You could consider a revocable living trust for greater flexibility or an irrevocable trust if asset protection is your main concern. Free resources and templates are available online to help you set up a trust that meets your needs (like this one).
Again, trusts are the place to get creative with your estate planning ambitions: they are a perfect place for your personality and values to shine through. Consider one client Greg helped recently:
“I helped a client who had no children, who has done very well, and whose passion is for mules. They love mules. They have a little farm with several mules, and when they pass away, we’ve set up a foundation to care for mules, so we’ll be giving out $50,000 a year to different mule rescues around the country. Just tell us your dreams! We’ll figure it out.”
If you took the time to pause and visualise what really matters to you earlier, this is where what came up in your mind’s eye could really come to the forefront. Trusts can be great, tax-efficient ways to serve the people and causes you care about practically, for a long time.
4. Review and Update Regularly
Your estate plan should evolve with your life, precisely because it is a beautiful reflection of your life. Regular reviews ensure that your plan remains relevant and effective for expressing the things you care about, at the time you care about them.
Major life events, changes in financial status, or new laws can impact your plan, so it’s crucial that you set aside one day a year to review your estate plan. Now, if you go through any particularly significant life changes, you might want to bring that date forward, but otherwise, once a year should be fine.
And remember: sitting down to review your estate plan isn’t just a practical affair — it can be a great opportunity to re-centre and reconsider what matters most in your life, to ground you in a greater purpose. Annual reviews can reinforce the truth that your dreams can live on long after you are gone.
5. Consider the Tax Implications
Estate taxes can significantly reduce the value of your estate. That’s why planning for these taxes is essential if you want to maximize the inheritance for your beneficiaries. Strategies such as gifting during your lifetime or setting up specific types of trusts (see above) can help mitigate tax burdens.
But what does “considering the tax implications” mean, really? Greg offers a helpful, recent example to help you get to grips with this idea a little more clearly:
“I just gave an entire presentation to a church in Greenville, OH, about charitable donations out of their IRAs. There are a lot of people, when they are of an age where they are forced to take distributions out of their IRA, who don’t need they money… but they’ve got to pay tax on it.
So if they were going to donate that money anyway, then why not do it directly from the IRA, where there’s no tax burden? Easy math: let’s say they were forced to take $10,000 and they’re in the 25% tax bracket…
Well, if they were going to give that money to the church, there would be $7,500 left over after taxes (if it went through their checking account). But if they did it directly from the IRA, they could give the church the full $10,000.
This example might not be directly related to your unique estate planning situation, but the point stands: considering the tax implications — doing the math — could make a huge financial difference for the people you love and the causes you care about.
Estate taxes vary from state to state, so it would be best for you to familiarise yourself with the tax laws in your specific state, in addition to any federal taxes (e.g. for PA, see here). There are also free online calculators and resources that offer estimates, and can help you develop strategies to minimise your taxes (like the one here).
6. Plan for Incapacity
Incapacity planning might be an uncomfortable aspect of estate planning, but that makes it no less critical. Incapacity planning is about preparing the possibility that you may one day be unable to make conscious decisions about your health care or finances.
If that day were to come, that’s when tools like living wills, durable powers of attorney, and health care proxies would come in — tools that would be wise to prepare and apply ahead of time. It’s better to have a plan in place that you can get behind than stumble into a situation completely unprepared.
Here’s a brief breakdown of the kind of tools we’re talking about:
- A living will outlines your wishes for medical treatment if you become incapacitated;
- A durable power of attorney designates someone to manage your finances; and
- A health care proxy appoints someone to make medical decisions on your behalf.
Collectively, these documents ensure that your wishes are followed and your affairs are managed by trusted individual, no matter what may happen to you.
7. Communicate Your Plan by Telling the Story
Once you know why you are writing up your estate plan, and what exactly comprises it, it’s time to tell those you love. Communicating with your family and any other relevant parties is vital for ensuring that your legacy is both understood and honoured.
In Western culture, conversations about finances can be a little strained and awkward — especially in a context where people are wondering how much they stand to inherit. People typically keep that kind of information close to their chests, for fear of offending people.
However, we do not believe that potential awkwardness or fear should derail what could be a compelling opportunity to tell the story of your life through your estate plan. Remember all that stuff we talked about at the beginning — your values, your why, your vision — that’s where those can really make their mark.
Human beings are wired for story. There’s a world of difference between laying out cold, hard-facts, and weaving a complex and emotional narrative people can connect with. Instead of leaving others to project their feelings (positive or negative) onto your estate plan, you have the opportunity to draw those you love into how you feel and how you see the world. In other words: invite empathy.
By laying out your positive vision for the future, and showing how your estate plan contributes to it — the “faith” and “impact” pieces we talked about earlier — you could actually inspire those you love to make changes in their lives, and help them not just be OK with the financial decisions you have made in your estate plan, but actively champion them.
Of course, this kind of meeting can also provide space for a Q&A to talk through any important practicalities (sharing the documents you’ve written up, making sure people know if they need to execute anything, etc.), but you can set the mood by how vulnerably and authentically you draw people into your story.
That’s why this step is last: it’s the one that will probably take the longest to craft, because it is the most precious. In fact, it’s how human beings have preserved their individual and cultural legacies since the dawn of human history. So remember: storytelling is not just a to-do item; it’s an art in and of itself, and it’s what lasts.
The Benefits of Professional Advice
This might be “Estate Planning for Dummies” but even though we’ve tried to keep things simple (and free), that doesn’t mean there is no complexity involved.
Although you could use any of the free resources we have linked above, you might find certain elements of the estate planning process too time-consuming or technical to complete on your own. In those cases, we would advise you reach out to a professional like an estate planning attorney or certified financial planner.
When to Seek Professional Help
Consider seeking professional help if your estate includes substantial assets, multiple businesses, or complicated family dynamics. Professionals can help you navigate these complexities as they have plenty of experience helping others like you through similar situations.
They can also keep you updated on changing laws, and ensure your plan remains effective. They have the time to keep on top of these matters, precisely because it’s their job. You might not have the time, but there’s not shame in that. Asking for help shows wisdom and humility.
Indeed, at Iron Point Financial, we ask for help all the time, when we know there are others who can add more value than we can. In Greg’s words, when it comes to estate planning:
“I work very closely with an estate planning team. I am not an attorney. There are areas of the estate planning process where you need attorneys. Especially if we’re trying to pre-plan things.
A very common goal is to protect their wealth from the nursing home; people don’t want to lose the family farm if they get sick. Sometimes, that involves different types of trusts, depending on what we’re trying to achieve.
It is a very specific type of law, where you definitely want a specialist, because it’s different down to the county that you live in. For residents in Mercer County, I refer a lot to Heritage Elder Law (Jeff Banner).”
Finding the Right Professional
For legal matters in particular, we would recommend that you look for estate planning attorneys with a track record of experience and plenty of positive reviews. Consultations are often free, allowing you to find the right fit without an initial, binding financial commitment.
If there’s one thing we care about at Iron Point Financial, it is making sure that your financial planning is as unique as you are, and matches your goals. We believe that finding an estate planning attorney should be no different: the person you choose should take the time to sit down with you, listen to you, and develop an understanding of what you need (just like we do with all of our financial panning clients).
Combining DIY and Professional Advice
Depending on your situation, you might also consider combining a DIY approach with professional guidance. You could do that by using free resources to create a basic plan, and then consulting a professional to review and refine it. This approach could save you money while ensuring your plan is thorough and legally sound.
Final Words
Estate planning is a crucial step in securing your financial future and providing for your loved ones. By following these seven free, step-by-step tips, we hope you feel equipped to create a comprehensive plan without needing to rely on costly consultants or heavy books (while remembering that scheduling an appointment with the right professional could always be a good option).
And with that summary, we have made it to the end of our “Estate Planning for Dummies” guide. How did we do? We started off by expressing our hope that you finish it with a smile on your face, and the confidence to proceed. Why not let us know through the comment form below what you thought of this article — we would love to hear from you!
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Iron Point Financial is here to empower you to secure a brighter tomorrow. We operate physical offices in Grove City, PA and Greenville, PA.
We primarily serve residents of Pennsylvania, Ohio, West Virginia and Florida but we also have security registrations for 22 other states across the continental USA.
