Estate Planning Essentials: Protecting Your Wealth and Loved Ones

Estate planning is essential to protecting your loved ones, preserving family wealth, and directing how your assets should be managed and distributed when you pass away or become incapacitated.

However, the topic can be complex and emotional, causing too many families to procrastinate rather than be proactive. To help ease the stress, we’ve simplified estate planning into a few fundamental components to help you and your family get started.

Estate planning is also about creating a legacy on your own terms. That means your plan should reflect what matters most to you—whether that’s setting up your children and grandchildren for financial wellness, helping your business thrive in your absence, or supporting a cause you’re passionate about.

Effective planning encompasses:

  • Performing a comprehensive review of your assets, including bank accounts, investments, real estate, cars, insurance, etc.
  • Compiling critical documents that outline decisions involving how your assets will be distributed, who will care for dependents, and instructions for your medical care.
  • Employing strategies to mitigate estate taxes, such as setting up trusts or gifting throughout the year.

Creating a complete set of documents is one of the most important parts of estate planning. It is essential to review and revise your plan regularly to reflect any changes in laws or your life circumstances. Key components include:

A will is a simple legal document that defines your wishes for the distribution of your assets and guardianship of your minor children, dependents, or pets after your death. It does not take effect until you pass away.  

Wills typically go through probate, a costly and time-consuming process that becomes a part of the public record. If you die without a will in place—called “intestate”—the state court system will decide the transfer of your property.

A trust is a more sophisticated legal agreement that allows you to direct the management and distribution of your assets during your lifetime and after your death. A trust takes effect as soon as it is signed and funded.

Trusts can give you greater control over your estate, ease your tax burden, help you avoid probate, and provide more privacy than a will. Crescent Harbor can guide you through the nuances of different trusts—including revocable, irrevocable, special needs, and assets protection trusts—and align with estate attorneys to choose the option that best suits your goals.

A durable power of attorney (POA) gives a trusted individual (known as an agent) legal authority to act on your behalf should you become physically or mentally incapacitated.

You can choose to give your agent as much or as little power as you wish, including making decisions involved with:

  • Buying, selling, and maintaining real estate and other property
  • Using your assets to pay for you and your family’s regular expenses
  • Filing taxes and collecting government benefits
  • Investing money in bonds, stocks, and mutual funds
  • Transferring property to existing trusts

A crucial part of your estate plan involves providing instructions for your medical care if you become seriously sick, injured, or unable to communicate your intentions.

Typically called an advance medical directive, this may include the following:

  • Durable POA for health care that designates a medical proxy to make decisions if you are unable to do so.
  • HIPPA authorization form that names who can access your medical records and discuss your care.
  • Living will that details guidelines for life-saving treatments such as CPR, ventilators, or feeding tubes in the case of a medical emergency.

You’ve worked hard and made sacrifices to build wealth for yourself and your family.

Embracing tax planning strategies, such as setting up trusts or donating to philanthropic causes, is important to reduce the value of your taxable estate and preserve your family’s wealth.

Three taxes to consider as a part of your estate plan include:

  • Estate tax: This federal tax is currently levied on assets over the cap of $13.61 million per individual, which will be reduced by close to 50% at the end of 2025.  Twelve states currently impose their own estate taxes.
  • Inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania currently impose this tax, which is paid by estate beneficiaries (above specific thresholds).
  • Gift tax: The donor is responsible for paying this tax on gifts that exceed the annual exclusion for the calendar year. Qualifying charitable donations, political contributions, gifts to a spouse, and funds used for another person’s tuition or medical expenses are generally excluded from this tax.

It requires a dedicated estate planning partner who takes the time to understand your vision, wishes, and unique family circumstances.

Crescent Harbor can help you crystalize your vision, provide objective and tailored advice, and collaborate with your estate planning attorneys to achieve your goals. Let’s discuss your goals and create a clear road map to achieving them.

This material is for informational purposes only and should not be construed as tax or legal advice.

Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.