Blog, Estate Planning

Estate Management Tips to Protect Your Assets and Heirs


Imagine working your entire life and amassing a fortune but not having control over what happens to that money after your death. How do you make sure that your assets go to the right people and places? The answer is estate planning and management!

What is the purpose of estate management?

Estate management is about preserving the assets you have spent a lifetime building. It is about protecting your spouse, children, or other heirs and ensuring that your assets are distributed how and when you want them to be. Estate management is also about mitigating the taxes that may be due after your death.

There are two major objectives in Estate Management:

  1. Managing your financial and personal affairs during your lifetime, and
  2. Distributing your wealth after your death.

Done well, estate management can make a huge difference in not just how your estate is distributed after your death, but also how your affairs are handled if you become unable to manage them yourself due to illness or injury. It enables you to spell out your health care wishes in a way that helps to ensure they are carried out, even if you are unable to communicate. And it can help ensure that your possessions go to the heirs you choose, without the burden of legal wrangling that can tie up your estate for a prolonged period of time and cause deep divisions within your family. 

Through effective estate management, you can avoid needless expenses in legal costs, and you can provide for loved ones who may not be protected otherwise. These issues are too important to trust to luck; you need to determine the outcome by planning in advance.

What does estate management entail?

We find it helpful to think about the various estate management principles and strategies as a pyramid. The foundation is formed by an understanding of how estate taxes work. As we move up the pyramid, we encounter critical estate management documents and, at the top, specific tactics for estate management.

Estate Taxes

The first estate tax was established in 1797 to fund an undeclared naval war with France, but it was repealed after the war finished. The Revenue Act of 1916 re-established estate tax, and in 2012, the American Tax Relief Act made the estate tax a permanent part of the tax code. In 2017, the Tax Cuts and Jobs Act doubled the estate tax exemption to $11.4 million dollars per individual, and it will increase again in 2022.

You can estimate the federal estate tax using a quick formula. Simply start with the gross value of the estate, subtract that exemption amount ($11.7 million in 2021 and $12.06 in 2022 if the deceased was single or $24.12 million if the deceased was married). Then, multiply the leftover amount by 40% — the federal tax bracket for estates above $11.7 million in size. If you complete your estimation and find you may have an estate tax bill, you may benefit from estate management.

Since an estate must be worth such a large amount to be taxable, it will automatically put the beneficiary in the top tax bracket. The tax payment can have a severe impact on the overall amount the person inheriting will receive.                

Estate Management Documents

Having the right documents in place and keeping them regularly updated is critical for estate management and planning. Your wishes will be carried out according to these documents only, not simply what you want or hope to happen. 

A will 

Your will is the most basic estate planning document. It tells government officials exactly where you want your assets distributed when you die. A will is actually the cornerstone of an estate because it names the executor who oversees the process of distributing the estate. It can also name a guardian for minor children and direct property distribution.

Everyone should have a will, but according to one study, roughly 66% of Americans do not have one. That is short-sighted—and not just for the wealthy—because if an individual doesn’t have a will, it is up to the state to decide how his/her assets will be distributed. Even if you have a trust, you still need a will to take care of any holdings outside of the trust when you die. 

Health care directives

If you desire specific medical care instructions should you become incapacitated, then you need something called a living will. This document is a written list of health care wishes to be executed if you are unable to ask for them yourself. 

You will also need to name a medical power of attorney. This is a legal document that assigns a family member or trusted friend to have the legal power to make medical decisions on your behalf —so choose wisely!

Financial directives

There are three documents you may wish to complete for financial safety. 

First, joint ownership enables a spouse or co-owner of property to automatically receive the title without having to go through the legal system. 

A living trust is a trust that you create before passing, and it goes into effect for the trustee immediately after you sign the documents and fund the trust. 

Lastly, you will also need a financial power of attorney who can make decisions on your behalf.          

Tax Effective Strategies

Unless you want much of your life savings and assets to go to the government at the expense of your heirs, it is important to use strategies that allow for passing inheritance in the most tax-effective way. Consider the following tactics:

  1. Give money while you are still alive: You can gift up to $15,000 at a time and $11.7 million in your lifetime tax-free!
  2. Establish a trust: A trust is a private legal entity that can own property and avoid probate if properly structured. After death, trusts can provide some management over asset distribution to heirs, but they do involve a very complex set of tax rules and regulations.
  3. Use a life insurance policy payout as the money to pay taxes on a trust.

Estate Management Considerations

If you now find yourself wanting to establish an estate management plan, consider two things:  

  1. The total estate value, including personal property, home, real estate, cash and bank accounts, investments, retirement plans, business interests, and life insurance including death benefits.
  2. The main objectives of your estate management. This includes who inherits assets, who makes medical and financial decisions, and whether or not you want to provide for a spouse or heirs.

We hope that this estate planning overview has been helpful to you! If you have any questions about your estate planning, feel free to reach out to us.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific issues with a qualified tax advisor or legal professional. 

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