It’s estimated that 67% of Americans don’t have an estate plan. Many assume they don’t need one, believing estate planning is only for the ultra-wealthy. However, having a plan isn’t just about passing down wealth—it’s about protecting your loved ones, reducing legal challenges, and making sure your wishes are followed.
At Main Financial Group, our team of financial advisors in Brighton, MI, helps individuals and families navigate estate planning with strategies to safeguard their legacy.
This blog outlines 10 key steps to help you create a well-structured and effective estate plan.
1. Conduct a Financial Inventory
Before making any estate planning decisions, it’s important to understand what you own. A financial inventory provides a clear picture of your assets and helps prevent anything from being overlooked when creating your plan.
Here’s a checklist of assets to include:
- Bank accounts (checking, savings, CDs)
- Investment accounts (stocks, bonds, mutual funds)
- Retirement accounts (401(k), IRA, pensions)
- Real estate holdings (primary home, rental properties, and land)
- Personal property (valuable items such as jewelry, art, and collectibles)
- Business interests (if applicable)
Keeping financial documents organized and accessible makes it easier for your loved ones to manage your estate when the time comes.
2. Create a Will
A will is an important legal document, but having one guarantees your estate will go through probate. Without it, state laws determine who inherits your assets, and a judge makes the final decision—potentially leading to a lengthy and costly process. A will should:
- Specify who receives your assets
- Name an executor to manage your estate
- Designate guardians for minor children
3. Consider a Trust
A trust can provide greater control over how and when your assets are distributed. Trusts come in different forms, each offering unique benefits:
- Living trust: Allows you to manage assets during your lifetime and facilitate the transfer of assets upon your death.
- Revocable trust: Can be changed or revoked during your lifetime.
- Irrevocable trust: Cannot be changed once established, often used for estate tax reduction and asset protection.
This legal tool can help avoid probate, reduce taxes, and make asset distribution more efficient. However, it’s important to properly fund the trust by retitling assets in its name; otherwise, those assets may still go through probate.
4. Review and Update Beneficiary Designations
Many assets allow you to name beneficiaries directly, and these designations override what’s stated in a will. Common accounts with beneficiary designations:
- 401(k)s and IRAs
- Life insurance policies
- Pension plans
- Annuities
- Transfer on Death (TOD) accounts (investment and bank accounts)
Be sure to name contingent beneficiaries to inherit assets if the primary beneficiary cannot. Outdated designations—such as an ex-spouse or deceased relative—can cause complications and delays.
5. Plan for Digital Assets
As more financial and personal information moves online, digital assets have become essential to estate planning. These assets may include:
- Online financial accounts (PayPal, Venmo, crypto wallets)
- Email and social media accounts
- Cloud storage and critical digital documents
Having a secure list of usernames, passwords, and instructions for handling digital assets can help your family manage them appropriately after your passing. Some platforms even offer legacy planning tools to grant access or deactivate accounts when necessary.
6. Consider Life Insurance
Life insurance plays a valuable role in legacy planning by providing financial support for loved ones. It can cover final expenses, replace lost income, and help pay estate taxes or debts.
Common types of life insurance:
- Term life
- Whole life
- Universal life
The right policy depends on your financial situation and family needs.
7. Minimize Estate Taxes
Estate taxes can reduce the wealth passed on to your heirs, but strategic planning can help limit this impact. Some ways to manage estate taxes include:
- Annual gifting – You can give up to a certain amount per year (set by the IRS) without triggering gift taxes.
- Trusts – Certain trusts can remove assets from your taxable estate while still benefiting your heirs.
- Charitable giving – Donations to qualified charities may reduce taxable estate values.
Tax laws are complex and subject to change, so working with Main Financial’s estate and financial planning professionals in Brighton, MI, can help you find the best approach for your situation.
8. Plan for Incapacity
Having the right legal documents in place helps your loved ones manage your affairs if you’re unable to do so. Two key documents to consider:
- Power of Attorney (POA): Grants someone the authority to handle financial or legal matters on your behalf if you become incapacitated.
- Healthcare proxy (Advance Directive): Allows you to name someone to make medical decisions for you and outline your end-of-life preferences.
Without these documents, decisions about your finances or healthcare could end up in court, making an already difficult situation even harder for your family.
9. Communicate With Your Family
An estate plan only works if your loved ones understand it. While some conversations may feel uncomfortable, being open about your wishes can prevent confusion and family disputes down the road.
What to discuss:
- Who is responsible for carrying out different aspects of your estate plan (executor, trustee, POA).
- How your assets will be distributed and any special considerations for heirs.
- Final wishes, such as funeral arrangements or charitable contributions.
Clear communication gives your family the knowledge they need to handle your estate according to your intentions.
10. Regularly Review and Update Your Estate Plan
Life changes—and so should your estate plan. Events like marriage, divorce, births, deaths, or significant financial changes can impact your decisions. Reviewing your documents every few years helps keep everything current.
Key areas to revisit:
- Beneficiary designations (retirement accounts, life insurance, annuities).
- Wills and trusts (making adjustments as needed).
- Legal documents (Power of Attorney, Healthcare Proxy).
Updating your estate plan helps prevent outdated instructions from causing confusion or legal challenges.
Main’s Financial Advisors in Brighton Can Help
Estate planning is more than just drafting documents—it’s about creating a comprehensive strategy that protects your wealth, provides for your loved ones, and minimizes unnecessary expenses.
Our team of experienced financial advisors provides estate planning guidance to help you make informed decisions about your legacy. We’ll work with you to develop a plan that supports your goals, including retirement planning and investment management.
If you’re ready to take the next step, contact us today to schedule a consultation