Legacy & Estate Planning: Shaping Futures Beyond Your Own
Ann Garcia, CFP®
Head of Content & Author
Ann Garcia, CFP®
Head of Content & Author
Ann is a nationally recognized financial advisor and author who provides comprehensive financial planning and investment management advice to families, businesses, and individuals. She obtained her BA from the University of California, Berkeley, is a member of Phi Beta Kappa, and holds the Certified Financial Planner certification. Ann lives in Oregon with her husband and is the proud parent of two recent debt-free college graduates. In her free time, she enjoys running the Wildwood Trail and exploring Portland's vibrant food scene.
Tihomir Yankov, JD
Financial Advisor, Founder & CEO
Tihomir Yankov, JD
Financial Advisor, Founder & CEO
Tihomir is the Founder, CEO, and Registered Investment Advisor Representative of Tobi. Prior to founding Tobi in 2023, he was a consumer financial services attorney in private practice for twelve years. He earned his BA in Economics from the University of Virginia and his JD (cum laude) from American University. He lives on a small farm outside Washington, D.C. with his wife and middle-school son, perfecting the art of keeping their alpaca, llama, horses, and sheep in a semi-perfect state of harmony. Their rescued alpaca became the inspiration for the company's mascot.
Scott Snyder, JD
Estate Planning Attorney
Scott Snyder, JD
Estate Planning Attorney
Scott Snyder is an Oregon attorney with 35 years experience helping businesses and individuals solve legal issues by walking them away from risk and towards resolution. He received his BA from the University of California, Berkeley, his MA from the State University of New York at Albany, and his JD from Lewis & Clark Northwestern School of Law School.
Legacy & Estate Planning: Shaping Futures Beyond Your Own
Life is full of uncertainties, but one thing is inevitable: at some point, your assets will be passed on to others. And whether the transfer happens smoothly or with a lot of work by those who you leave behind depends entirely on how well you plan ahead.
Estate planning might sound complicated, but you don’t need to be wealthy to have an estate plan. In fact, taking control now will absolutely save your heirs time, money, and stress in the future. And the main rub is whether your family would have to go to probate court or not when you die. But that depends on how you set things up while alive.
First things first: Your estate is your net worth at the time of your death: all your assets and all your liabilities.
The individuals and organizations that get your assets are called your beneficiaries.
An estate plan has four main components. And you should consider all four—especially if you have minor children:
- Beneficiary Designations
- A Trust
- A Will
- An Advance Directive
Step 1: Set Your Beneficiaries (Do This First!)
Want the easiest way to ensure your assets go to the right people? Designate beneficiaries on every financial account and life insurance policy directly with each financial institution itself.
- ✅This process doesn’t require an attorney, a Will, or drafting anything at all!
- ✅You must set each beneficiary directly with your bank, investment firm, or life insurer.
- ✅The financial institution must transfer the accounts to each designated beneficiary when notified of your death—regardless of the provisions in your Will!
- ✅Ensure the designations are always up to date and update them immediately if circumstances change (marriage, divorce, childbirth, etc.) or if you change your mind for any reason.
🚨 The best gift you can leave your loved ones are assets that avoid probate altogether!
⚠️ Important: If you have a Will and it conflicts with one or more beneficiary designations, the beneficiary that is designated with the institution will get ownership of the account—regardless of what the Will says. So double-check who's listed on each account—and make sure they're accurate once a year—because those names determine who actually receives the funds. A Will does not and cannot overwrite the beneficiary designations on your accounts – either now or in the future!
⚠️ Important: If you designate a minor as a beneficiary with a financial institution or life insurer, you also need a Will or a Trust to address the manner in which the assets will be used for their benefit while they're still a minor, and even when and how the assets should be distributed to them in adulthood. In the absence of a Will or a Trust to address this, a probate judge would have to appoint another adult to manage the minors' assets for their education, health, welfare, and benefit until they become an adult. And it can be an adult that you don’t want doing that. Typically, in the absence of a trust, the minor will then get full control over the account where they’re listed as a beneficiary as soon as they become an adult.
Step 2: Establish a Trust for Financial Privacy – or If You Have Children
A Trust is the best estate planning tool even if you’re not rich for two reasons: (i) it gives you total financial privacy in death and (ii) allows you to control the distribution of your assets long after your death—such as by designating a trustee to manage the assets on behalf of your children or preventing a spendthrift beneficiary from getting everything at once.
i) A Trust creates a complete privacy shield around your assets.
A Trust keeps your financial affairs private when you die, but a Will does not. Any Will you write must be filed in probate court, and doing so makes it a public document for anyone to see. The contents and provisions of a Trust document, on the other hand, can remain private—even after you die—keeping your estate away from prying eyes of relatives, friends, or whomever else you wish to avoid seeing your assets in your estate.
ii) A Trust gives you full control over how assets are distributed to your heirs – and is critical if you have minor children.
- ✅It allows you to appoint a Trustee to manage the inheritance until your children become adults.
- ✅Without a Trust, a probate judge may pick someone you wouldn’t have chosen to manage their funds.
- ✅A Trust lets you control when and how assets are distributed: you can further delay the age when they get control of the inheritance or place any other conditions or restrictions that you want to. You cannot do that with a beneficiary designation.
Step 3: Write a Will (Yes, You Still Need One!)
Even with beneficiary designations and a Trust, you still need a Will—but not for the reasons you might expect.
- ✅A Will can serve as a catch-all for assets that don’t fit in your Trust or beneficiary designations (like personal property) or anything you may have forgotten.
- ✅A Will can provide public confirmation of who you’ve designated as beneficiaries with your bank or financial institutions so they know to go and claim their accounts directly with the institutions.
- ✅A Will appoints an executor (in some states referred to as a “Personal Representative”) to file your estate with the probate court. That Personal Representative is then legally bound to carry out your intentions and wishes in your Will, so you should tell that person where the physical original signed Will is located.
⚠️ Important: A Will can never override a beneficiary designation with the financial institution itself. For example, say Jennie is supposed to inherit your savings account based on provisions in your Will. But your bank records show Max as the official beneficiary designation you made with the bank. Who gets the money? Max does.
Step 4: Set Up an Advance Directive For Medical Decisions
An Advance Directive ensures that your medical wishes are honored if you’re unable to communicate them.
- ✅It spells out the life-sustaining treatments you do (or don’t) want.
- ✅It appoints a medical decision-maker to act on your behalf.
- ✅All Advance Directive forms have standardized language based on the state you live in, and you can ask for one from any hospital or medical provider and fill it out yourself. An attorney cannot do that for you.
Without an Advance Directive, your loved ones may struggle to make tough decisions—and courts may get involved.
Why These Four Steps Matter
If you place everything only in a Will, the executor (or Personal Representative) of your estate can have a very difficult, expensive, and time-consuming job to disseminate your assets in accordance with your wishes.
The executor of your estate will have to file your Will in a public probate court hearings to settle your estate. And the more information you have in the Will, the longer and more expensive the probate proceedings can become. And if you have minors as heirs, then a probate hearing can get even messier – and much more expensive!
Disseminating your assets automatically through Beneficiary designations with each financial institution removes that job from your Executor, because they would have absolutely no control or power over your beneficiary designations with the financial institution.
How do you create estate planning documents?
Typically, an estate planning attorney drafts and creates Wills, Trusts and other estate documents. Estate planning attorneys know your state’s laws and will customize documents to your situation. This includes planning for any state estate tax liability and ensuring that your children have appropriate guardians and custodians up to your state’s age of majority, which could be 18 or 21.
Estate planning attorneys can be expensive (around $2,000, ballpark, to set up basic documents), but there are many lower-cost online options or employer benefit plans that can help you for much less.
So, although estate planning isn’t a great area to look for savings–because the cost of errors can be so high–there are circumstances where these options may make sense:
- You are single and have never been married or divorced; and
- You don’t have children; and
- Your assets are primarily retirement accounts with named beneficiaries; and
- No one is likely to fight over your estate
If all of the above apply, then you might consider an online Estate document service, but make sure that the provider offers state-specific guidance, and that you fully sign the Will in front of a notary once it’s completed.
Coming Soon: How the Legacy & Estate Smart Card™ Will Help You:
- ✅Project of the value of the estate you may leave behind.
- ✅Track all beneficiary designations across your financial accounts and life insurance policies.
- ✅Ensure you have a Trust, Will, and Advance Directive in place.
- ✅Get annual reminders to update your beneficiaries and estate documents, if needed.
Estate planning doesn’t need to be morbid—and it's definitely not only for the rich. It’s how you can save your loved ones a lot of time and money sorting through your assets when the time comes.
Let’s make sure your legacy is protected. 🚀
Frequently Asked Questions:
This article–as with all information on Tobi–is for informational purposes and does not constitute legal advice.
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