Estate Planning Guidance FOR INDIVIDUALS & FAMILIES
Estate planning is how you provide for the people you love and the causes you believe in after you are gone. Our advisers can support you in updating beneficiaries, titling accounts correctly, and funding the trusts your attorney sets up, while coordinating directly with your attorney when beneficial.
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An estate plan is how your intentions are carried out when you no longer can: who is provided for, in what form, and with what tax consequences. It works through the documents you put in place, including your will, trusts, beneficiary designations, and powers of attorney, and through the accounts and assets that sit behind them. For individuals and families, detailed planning helps wealth transfer more efficiently, helping your family avoid the cost and delay of probate, and carrying out your wishes as you intended.
Our investment advisers are not estate planning attorneys and cannot draft legal documents, but they can help you align your accounts and investments with your estate plan. That includes confirming beneficiary designations and account titling match what your documents say, supporting the funding of trusts your attorney has established, and positioning assets to pass to the next generation. We recommend working with an estate planning attorney alongside your adviser so the legal documents and the investment strategy stay aligned.
Common Estate Planning Considerations for Individuals and Families
Estate planning involves different considerations from one client to the next based on family structure, asset mix, and intent. Examples include:
Beneficiary Designation Review
Account Titling
Trust Funding
Tax-Aware Wealth Transfer
Inherited Asset Strategy
Charitable Estate Planning
Our Approach to Estate Planning Guidance
Estate planning is an ongoing process. Your estate documents are written at a specific moment in time and should then be updated as family, finances, and intent evolve. While the documents are drafted by an estate planning attorney, working with an investment adviser to carry what those documents say through to your accounts is also important. Our approach typically includes the following:
Understanding Your Estate Goals
Understanding your estate goals means getting clear on who and what your wealth is meant to support, during your life, in the event of incapacity, and after you are gone. The first conversations with your adviser explore the people and organizations you want to provide for, the documents already in place, and the other advisers, attorneys, and accountants involved. The aim of this stage is a clear picture of your intent before any investment decisions are made.
Aligning Your Investments with Your Estate Documents
Aligning your investments with your estate documents means confirming that account titling, beneficiary designations, and trust funding match what is contained within the documents. This is important because beneficiary designations or the way an account is titled can override what your will or trust says. When your estate planning documents and your investment accounts don’t match, assets can pass to the wrong person, bypass a trust, or get stuck in probate when your family needs them most. For individuals and families, this often surfaces gaps such as an old retirement account still naming a former spouse or other family members, a brokerage account never retitled into a revocable trust, or a beneficiary form filled out before children were born. Your adviser can work with you to review the investment accounts against your current estate plan, identify mismatches, and coordinate with your estate planning attorney on any concerns. It is recommended that you review your accounts as they are added or consolidated and after major life events.
Tax-Aware Wealth Transfer Across Generations
How much of your wealth reaches the next generation depends in large part on how each asset is taxed when it transfers. When you leave appreciated investments to your heirs, their cost basis usually resets to the value at your death, which can erase the capital gains tax that would have been owed if those assets were sold during your life. Inherited retirement accounts carry their own withdrawal rules, and a traditional IRA is taxed differently from a Roth when an heir draws it down. Some states also apply an estate or inheritance tax on top of the federal one. A tax-aware approach is aimed at keeping more of your wealth with your family rather than lost to taxes along the way, and it involves deciding which assets to draw from during life, which to gift, and which to leave to heirs or charity. Your adviser shapes these recommendations in coordination with your CPA so your investment decisions and the broader tax picture stay aligned.
How Your Adviser Coordinates with Your Estate Planning Attorney
Coordination between an investment adviser and an estate planning attorney is the practice of sharing information so the investment accounts, the estate documents, and the underlying intent stay aligned. Your adviser works with you to review beneficiary designations against the current documents, confirm account titling, support trust funding, and consider tax impact, involving your CPA when beneficial. The estate planning attorney handles document drafting, legal advice, the structure of trusts and powers of attorney, fiduciary appointments, and other legal decisions.
Raffa is not an estate planning attorney and does not draft legal documents or provide legal advice. With this in mind, we recommend working with an estate planning attorney alongside your adviser so the legal documents and the investment strategy stay aligned.
Reviewing the Estate Plan Over Time
It is important to periodically review your estate plan to confirm that the documents and the accounts behind them still reflect your current circumstances and intent. For individuals and families, estate documents are commonly revisited every three to five years or after major life events, while items such as account titling, beneficiary designations, and trust funding are beneficial to confirm annually. If you experience a life event that may call for an update (marriage, divorce, new child or grandchild, a death in the family, a significant change in assets, a move to a new state, etc.) or there are major changes in tax law, an update may be justified. Your adviser can work with both you and your estate planning attorney to update your accounts to maintain alignment with your estate plan.
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Frequently Asked Questions About Estate Planning
How is an investment adviser involved in estate planning?
An investment adviser helps with estate planning by aligning your accounts with the estate plan and coordinating with the attorney who drafts the documents. For individuals and families, that includes reviewing beneficiary designations, confirming account titling matches the estate plan, supporting the funding of trusts that have been established, and considering the tax implication of each account as it relates to wealth transfer.
An investment adviser is not an estate planning attorney and does not draft wills, trusts, powers of attorney, or other estate documents. We recommend working with an estate planning attorney alongside your adviser so the legal documents and your accounts stay aligned.
How often should I review my estate plan?
A common practice is to review your estate plan every three to five years and after any major life event, such as a marriage, divorce, birth, death in the family, a significant change in assets, or a move to a new state. For individuals and families, items such as account titling, beneficiary designations, and trust funding are worth confirming annually so the accounts stay aligned with the documents the attorney has drafted.
How do beneficiary designations interact with my will?
Beneficiary designations on retirement accounts, life insurance policies, and certain other accounts control where those assets go regardless of what the will says. For individuals and families, that can produce unexpected results when designations are outdated or inconsistent with the broader estate plan. An IRA naming a former spouse as beneficiary, for example, will pass to that person even if the will leaves everything to current family. Your adviser can review beneficiary designations with you as part of aligning your accounts with your estate plan and update them alongside the documents the attorney maintains.
What is the lifetime gift and estate tax exemption?
The lifetime gift and estate tax exemption is the cumulative amount an individual can transfer to others, during life or at death, without owing federal gift or estate tax. The exemption is set in tax law and indexed for inflation; the most current figure is available from the IRS. For individuals and families, gifts made during life, including those above the annual exclusion amount, reduce the remaining lifetime exemption and are part of family wealth planning. State-level estate or inheritance taxes may also apply with their own thresholds. Conversations about how much to transfer, when, and through what structure are typically coordinated between your wealth adviser, estate planning attorney, and your CPA.
What happens to my retirement accounts when I pass them to heirs?
Inherited retirement accounts follow different rules depending on who inherits them and the type of account. For individuals and families, a spouse who inherits an IRA can typically roll it into their own IRA. Most non-spouse beneficiaries are required under SECURE Act rules to withdraw the full balance within ten years, which can push significant taxable income into the heir’s higher-earning years. Roth accounts inherited by non-spouses follow the same ten-year rule, but distributions are generally tax-free. For those with sizable pre-tax balances, planning ahead can include Roth conversions during the original owner’s lifetime, charitable beneficiary designations, or structured withdrawal strategies that consider the heir’s tax bracket.
How can charitable giving be built into an estate plan?
Charitable gifts can be built into an estate plan through bequests in the will, beneficiary designations naming a charity or donor-advised fund, charitable remainder or lead trusts, and lifetime gifts of appreciated assets or qualified charitable distributions. For individuals and families with significant charitable intent, integrating charitable giving with the estate plan can reduce taxes on inherited assets while supporting the organizations you care about. These decisions are typically coordinated among your wealth adviser, your CPA, and your estate planning attorney.
How do I avoid probate?
Probate is the court-supervised process of settling an estate, and it can be slow, public, and costly for your loved ones. A will generally does not avoid probate; it directs who receives what, but the assets it governs still pass through the court process. Beneficiary designations, transfer-on-death (TOD) and payable-on-death designations, joint ownership with right of survivorship, and assets held in properly funded trusts help keep assets out of the probate process. For individuals and families, much of this comes down to account-level details your adviser can assist you with, such as updating beneficiary designations, adding transfer-on-death designations where they fit, and confirming that any trust your attorney works with you to create is funded.
Disclosures:
Raffa Wealth Management, LLC dba Raffa Investment Advisers (“Raffa”) is a registered investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
The information contained on this page is for informational and educational purposes only and should not be construed as personalized investment, legal, or tax advice, or as a recommendation to take any specific action. Advisory services are only offered to clients or prospective clients where Raffa is properly licensed or exempt from licensure.
Raffa does not provide legal or tax advice. Clients should consult their estate planning attorney and tax professionals regarding their individual circumstances. Any coordination with attorneys, accountants, or other professionals is conducted with the client’s permission and does not imply responsibility for the services or advice provided by those third parties.
Estate planning and tax-related strategies discussed are general in nature and may not be suitable for all individuals. These strategies are not guaranteed to achieve specific outcomes and depend on a variety of factors, including individual circumstances, proper implementation, and changes in applicable laws and regulations. Tax laws are subject to change, and their application can vary widely based on the specific facts and circumstances involved.
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