The traditional “hot button” that motivates people to see their lawyers about estate planning is taxation. 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.
However, that hot button has now cooled considerably. This year, the federal estate tax applies to estates larger than $13.99 million. Next year, the exemption level goes to $15 million, due to the One Big Beautiful Bill Act signed by President Trump on July 4, 2025. Unlike past increases in the exemption amount, this change is permanent, and there will be additional inflation adjustments in subsequent years. For a married couple, each partner is entitled to an exemption, so a total of $30 million may be exempt from federal estate and gift taxes.
There are other taxes to be considered at death. State inheritance and/or estate taxes typically take effect at much lower wealth levels. There are income taxes to consider, particularly income in respect of a decedent (this primarily affects retirement plan payouts after the passing of the account holder).
Estate planning has always involved far more than tax planning. It focuses on protecting beneficiaries financially, with tax minimization serving as one method to achieve this goal. If you haven’t attended to your estate plan, don’t put it off any longer. If you do have an estate plan, consider reviewing it in light of the changes in federal tax law.
Assess the family assets in all dimensions
To begin, you have to know what you are working with.
- Inventory assets: Your estate plan must dispose of everything you own; otherwise, the state’s law of intestacy will apply. This includes bank accounts, stocks, bonds, real estate, and business interests. Don’t overlook insurance policies and retirement plan benefits or personal property, such as fine art, collections, jewelry, and cars. You’ll need to know how you wish to distribute the assets as well as what needs to be distributed.
- Identify beneficiaries: A surviving spouse and children are the usual persons to be protected. You may also have distant relatives, charities, and pets to include in your estate plan.
- Check beneficiary designations: If you have an IRA or an employer-provided retirement plan, then you already started on your estate plan when you designated your beneficiaries. These designations should be reviewed periodically, especially when there have been changes in family circumstances, such as a marriage or divorce.
- Consider trust benefits: A trust offers a wide range of financial benefits, which can be especially valuable when beneficiaries need help managing money. Trusts may be established and funded during a person's life (the living trust) or in a will (the testamentary trust).
Begin an exploration of the utility of trusts
A great variety of financial protection strategies can be implemented through careful trust planning. Among the choices to evaluate:
- Marital trusts: Several options are available to provide lifetime asset management and financial protection for a surviving spouse.
- Support trusts: For an adult child who requires a permanent source of financial support, with the trust principal protected from the claims of creditors, a support trust may offer a suitable solution. The beneficiary’s access to the trust income can be limited to only the amount required for their support, education, and essential expenses.
- Discretionary trusts: The trustee has authority over the income and principal, similar to the grantor's rights before the trust's establishment. The beneficiary has no interest in the trust that can be pledged or transferred. When there are multiple beneficiaries, the trustee may weigh the needs of each in deciding how much trust income to distribute or reinvest, when to make principal distributions, and to whom they should be distributed. The trust document will often include guidelines on such matters.
A trust can be a powerful financial tool, which you can explore further with an estate planning professional.
Collaborate with your estate planner to carry out actions
The next steps require the advice of an attorney and the execution of legal documents.
- Make a will: Your will contains instructions for the disposition of your property. It also nominates an executor or personal representative to manage the settlement of your estate.
- Make a living will: This document addresses your expectations for medical care at the end of your life. You also may want to execute a power of attorney for health care to identify an individual who can make medical decisions on your behalf.
- Execute a durable power of attorney: Identify an individual who can make financial decisions on your behalf.
- Create a document locator: Your family needs to know where your will and powers of attorney are kept. Your executor will need to know the location of all your other important papers, such as tax returns, account statements, property deeds, and insurance policies.
- Make arrangements for any safe-deposit box: Very often, a safe-deposit box is closed upon death and cannot be opened until probate. It may not be the best place to keep documents that will be important after your passing.
These steps are not comprehensive and are merely suggestions for the range of concerns you should address during the estate planning process.
How Arvest Wealth Management can help
Our experienced professionals specialize in administering trusts and settling an estate. We are advocates for trust-based wealth management strategies for affluent families’ wealth transfer. If you would like a second opinion about your estate plan or if you are curious whether a trust might be right for you, reach out to one of our trust officers. We’ll be pleased to discuss your unique situation.
This content has been prepared by The Merrill Anderson Company and is intended as a general guideline.
© 2025 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.
