As a huge number of baby boomers turn 65 from now through 2027, most people should be thinking about managing their money amid the so-called “great wealth transfer,” when as much as $72 trillion is expected to move from one generation to the next. A recent article from MarketWatch, “As a $72 trillion ‘great wealth transfer’ is set to begin, here are 4 estate-planning rules to follow,” offers some tips.
Every adult should have a last will and testament and a financial power of attorney, so someone can manage their financial affairs if they become incapacitated. You’ll also need a healthcare proxy to name a person who can make medical decisions on your behalf.
Update beneficiary designations on 401(k)s, investment accounts and any financial accounts naming a beneficiary. Whatever is on those documents supersedes trusts and wills. These should be reviewed every few years or after any major life events like marriage, divorce, the birth of new children or grandchildren, or the death of a beneficiary.
Secure your important documents and make sure your executor, trustee and a trusted family member know where they are. The executor should also have contact information for your estate planning attorney, CPA and financial advisor.
Review your overall estate plan every three to five years. If your estate plan was created when your children were minors and now they’re adults, it’s time to revisit your estate plan.
A will alone might work for a simple estate. However, if you have complicated finances or significant wealth, you should talk with your estate planning attorney about a Revocable Living Trust. Putting assets into trusts allows assets to pass to beneficiaries without going through probate, which is often expensive and time-consuming. Once the trust is established, you’ll need to fund it by retitling assets, so they are taken out of your estate and owned by the trust.
Wills, trusts and estate planning documents should be reviewed and updated on three occasions: every three to five years if your life doesn’t change much, every time there is a major event in your life, commonly called a “trigger” event and whenever there is a large change to tax laws.
The estate planning community is now preparing for the possible end of the Tax Cuts and Jobs Act of 2017, which raised the federal estate and gift tax exemptions to historically high levels. Unless the rule is extended, on January 1, 2026, these limits will return to previous amounts, with estates around $7 million subject to federal estate taxes. If your wealth is near the $7 million mark and you haven’t met with your estate planning attorney to prepare for this potential change, now is the time to make an appointment.
Once your estate plan is up to date, it’s a good idea to have conversations with family members, the people you’ve named as executors, power of attorneys and beneficiaries. If you have a plan but haven’t shared it with children or heirs, it could lead to family fights, even leading to litigation.
Your estate planning attorney will help create an estate plan to meet your needs and protect your loved ones. It’s a task to tackle sooner, rather than later.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: MarketWatch (April 3, 2025) “As a $72 trillion ‘great wealth transfer’ is set to begin, here are 4 estate-planning rules to follow”