Taxation has been the traditional "hot button" that motivated people to see their lawyers about estate planning. Death taxes—inheritance taxes, estate taxes, federal taxes, state taxes—have taken a notorious toll on unplanned estates over the years. With sound planning, that burden can be lightened or even eliminated. In some cases, the tax savings easily cover the cost of the attorney's fees for creating the estate plan.
However, that hot button has cooled considerably in recent years as the federal estate tax has increasingly targeted larger estates. For example, a single person who passes away in 2026 has a federal estate tax exemption of $15 million. A married couple, assuming that they both pass in 2026, may shelter $30 million from federal estate tax, even without elaborate estate planning. An exemption that large would seem to let most families of moderate wealth off the hook. However, there are other taxes to be considered at death. State inheritance and/or estate taxes typically kick in at much lower wealth levels. There are income taxes to consider, particularly income in respect of a decedent (which primarily affects retirement plan payouts after the account holder's death).
But estate planning always has been about much more than tax planning. Estate planning always has been about financial protection for beneficiaries, with tax minimization just one means to that end.
The basics for everyone, regardless of wealth
At a foundational level, everyone should have a will. If you don't have a will, your state of residence has a default plan for dividing your property called the law of intestacy. It represents compromise, which is what legislators assume most people would want.
With a will, you can designate your beneficiaries, making it clear who gets what. You can name contingent beneficiaries in case someone dies prematurely. You can make beneficiaries of friends and others who are not relatives. You can nominate an executor to implement your estate plan rather than have the probate court assign a stranger to do that job. If you own a business, you can authorize your executor to continue operating the business to avoid the need for a quick sale. You can protect the financial interests of your beneficiaries by establishing trusts to manage their inheritances.
Will substitutes
A will controls only a portion of one's property at death, the part that goes through probate. Property with named beneficiaries may pass to them automatically. Examples of such property include jointly owned property, such as real estate, bank accounts and brokerage accounts, pay-on-death accounts, life insurance, qualified retirement accounts, such as IRAs and 401(k)s and revocable living trusts established for lifetime financial management.
Understanding the role of such assets in the composition of an estate plan is essential. If you have an IRA or an employer-provided retirement plan, you have already started on your estate planning when you made your beneficiary designations. These designations should be reviewed periodically, especially when there have been changes in family circumstances, such as a divorce.
Financial management in retirement
Should you become incapacitated, who will manage tax obligations, oversee investment portfolios, and ensure the seamless handling of ongoing financial affairs?
The first solution that comes to mind for these questions is the financial durable power of attorney. This document allows another person to step into your shoes, financially speaking, and make binding decisions on your behalf. A durable power of attorney may be as broad or as limited in scope as needed to make you comfortable.
The more comprehensive solution is a revocable living trust. You create the trust now. The trust agreement is revocable, meaning that you can make changes to it at any time, even canceling the agreement if you see fit. After your investment assets are transferred to the trust, the trustee takes over everyday investment responsibilities and maintains accurate records of all transactions.
If and when you become incapacitated, or upon your request, the trustee steps in to take over full management of your assets, acting as you have directed in the agreement. In addition to handling your investments, the trustee's responsibility may be extremely wide-ranging. You may authorize the trustee to utilize trust assets to retain private care professionals, manage estate obligations, and preserve your standard of living.
The living trust can also be integrated into your overall estate plan. You can make provision for assets that have not been placed in trust during your lifetime to pour over into the trust at your death. You can fashion an agreement that allows you to distribute your assets as you wish at your death.
Health care in retirement
Another axis of anxiety concerns health care. In this area, you may need:
- A health care power of attorney, with medical instructions to be followed if you are incapacitated
- A Health Insurance Portability and Accountability Act (HIPAA) authorization, so that your agent has full rights to your medical records
- A health care proxy that may give someone decision-making power at the end of life
- A living will that outlines your expectations for medical care near the end of your life
Digital assets
One of the emerging areas of interest in estate planning concerns "digital assets." A variety of items will fall under this umbrella, including e-mail, electronic files, financial accounts, digital photographs and video, social media accounts and perhaps even items with substantial value such as domain names or cryptocurrency.
Upon one's passing, the fiduciary who will be handling estate settlement would have access to all of these items. There are many reasons for such access, including:
- Consoling grieving loved ones, making images and writings of the deceased available
- Identifying and marshaling the assets in the estate, especially accounts that may exist solely online
- Heading off any attempts at identity theft after passing
However, the law is surprisingly unsettled in this area, and expectations may not be met.
End-of-life choices
Many individuals have specific personal preferences regarding their final resting arrangements, and outlining your wishes can provide clarity for your loved ones. Options might include traditional burial, cremation, or alternatives such as organ donation, green burial, or other modern memorialization options. If you have already reserved a resting place or have specific religious or personal wishes for a memorial service, sharing these details in your estate plan ensures your wishes are honored and relieves loved ones of making difficult decisions.
Protecting your wealth requires a tailored approach unique to your goals. Reach out to your Arvest Wealth Management client advisor to discuss these topics. As an extension of your team, your client advisor can arrange an introduction to a trust officer and provide you and your family with access to subject-matter professionals tailored to your specific situation.
This content has been prepared by The Merrill Anderson Company and is intended as a general guideline.
© 2026 M.A. Co. All rights reserved.
Arvest and its associates do not provide tax or legal advice. The information presented here is not intended as, and should not be considered, tax or legal advice. Consult your tax and legal advisors accordingly.
