7 Estate Planning Consideration In 2023

Signing estate planning documents

When Aretha Franklin died intestate in 2018 – without a will – she joined the long list of the likes of Picasso and Abraham Lincoln who didn’t own a will. Thus, their estate became ground for a fierce battle amongst the claimants for years. Though you might or might not own a million-dollar estate, estate planning is essential for all. In 2022, $12.06 million is the tax exemption limit. And estate planning also rescues you from impending taxes.

This blog highlights the primary estate planning considerations, their significance, and essential elements of a will.

What are the basic estate planning documents?

A complete estate plan encompasses the following primary estate planning documents:

1. Last will and testament

A last will and testament is the fundamental document in estate planning. A will is a legal document outlining the owner’s (testator) final wishes on the disposition of their assets. Moreover, the essential elements of a will are assets, beneficiaries, and executors. The fundamental purpose of the will is to distribute assets to the beneficiaries upon the testator’s death.

The testator enlists their assets in the last will and assigns them to the beneficiaries. Also, the will includes the executor, who is responsible for managing and distributing the assets. Besides, a will is the basis of the probate – the process of administering and distributing the will.

2. Trust

A revocable trust is another critical document in estate planning. A living trust helps to designate your assets to specific beneficiaries when you are alive. When you are incapacitated, then your trustee takes over the trust. Further, upon the testator’s death, the assets directly pass on to the assigned beneficiaries avoiding the probate process.

Moreover, a revocable living trust includes guardianship details for minors, senior members, and an adult child with special needs. The benefits of a trust are tax exemption and bypassing the probate process. You can also create an irrevocable trust, but you cannot change its terms once created.

3. Durable power of attorney for healthcare

A durable power of attorney designates an “agent” to act on your behalf when you cannot do so. Moreover, through a durable power of attorney, the principal(person who writes of power of attorney) can assign general powers, financial powers, and the ability to make healthcare decisions when incapacitated or unable to speak for themselves. A power of attorney expires on the principal’s death.

4. Advance directive

An advance directive is a legal document that states your healthcare decisions when you are incapacitated or unable to speak for yourself. Moreover, an advance directive includes your end-of-life care decisions. These decisions express your preferences regarding cardiopulmonary resuscitation, life-support, artificial hydration and nutrition, and organ donation. Creating an advance directive clears the air of misunderstanding for your loved ones during the crucial moments of your life.

5. Estate and gift tax exemption

If your sizable estate exceeds $12.06 million, your estate is subjected to tax. Therefore, to reduce the sizable estate and for availing the gift tax exemption, consider the following:

  • Qualified personal residence Trust(QPRT)
  • Grantor retained annuity trust (GRAT)

In QPRT, you transfer a primary residence or a vacation home in a QPRT. Moreover, the QPRT allows you to stay in residence rent-free within the QPRT’s term, and after the term, the residence passes on to the beneficiaries. The advantage of QPRT is that you can avoid the tax levied by falling under the exemption criteria or freezing the current value of your home.

Further, GRAT is similar to QPRT, but here the “corpus” of the trust is an income-producing asset, and you have the right to receive an annual payment for the given term.

6. Guardianship designation

A will and a trust allow for incorporating guardianship designation. If you have minor children, a senior member, or an adult child with special needs, you can appoint a guardian to look after them upon death. Before appointing a guardian, ensure they are mentally sound and financially capable of taking care of your children. Besides, mention a contingent guardian also in the document.

On the other hand, if you haven’t appointed anyone, the court appoints someone(the surviving parent). So, if you wish for the right person to take care of your children, nominate them beforehand.

7. Life Insurance and Retirement Savings

Life insurance is an important estate planning tool. Life insurance provides lump sum money and relief for your loved ones. Moreover, they can opt to receive it in lump sum or installments. There are numerous benefits of life insurance:

  • Quick financial aid for beneficiaries
  • Easy access to money for covering the financial expenses
  • Tax-free inheritance for your loved ones

Further, the death benefit from life insurance doesn’t go through probate. And it provides an exemption from estate taxes for high-net-worth individuals.

What do these documents do?

So, why create these estate planning documents? The following are the reasons to consider creating estate planning documents:

  1. The primary purpose of estate planning is to secure your assets.
  2. Secondly, these estate planning documents ensure you inherit all your physical, financial, and digital assets to the right people per your wishes.
  3. Will and trust do have a guardianship clause to protect your minor children.
  4. Another key benefit is that it provides tax exemptions for high-net-worth individuals.
  5. Besides, it helps to eliminate any possible family disputes in the future.

What should you be thinking about for your will?

last will and testament

The following are the considerations you ought to make while creating a will and testament:

  • Which assets must you cover?

    The fundamental purpose of creating a will is to secure your assets and pass them on to your loved ones. And the first step for creating a will is to inventory your estate. Determine what you own. Enlist both the real estate property – house and land; and the personal property – bank accounts, investments, stocks, jewelry, etc.  

  • Who will be your beneficiaries?

    The next crucial question to consider is – who are your beneficiaries? Your beneficiaries could be your children, spouse, close relatives, or even friends. Further, considering unexpected situations or events is essential. Hence, also mention a contingent(alternate) beneficiary.

  • Who will be your executor?

    An executor is integral to a will and fuels your estate on your behalf. An executor has different duties, such as managing and distributing your estate and settling your debts and taxes. So, choosing someone trustworthy, organized, and financially competent is essential. Also, consider discussing with the individual and have their consent before going ahead.

  • Should I choose a legal guardian for my children?

    Choosing a legal guardian for minor children is crucial but, often, a neglected clause in the will. Generally, when a parent dies, the surviving parent gets custody of their children. But what if both parents die or you are going through a divorce? Under such circumstances, you should consider someone else to take care of your children. 

  • How to protect your digital privacy?

    Digital life is an inevitable part of our lives. Deciding the fate of our social media accounts after we die is essential. Moreover, we can either delete the accounts or memorialize them. After all, protecting your digital privacy is also more critical than ever before. So, mention your wishes regarding your digital accounts in the will, so the executor and your loved ones know them.

  • Who will take care of my pets?

    Although pets are family members, they are personal property under the law. You can mention someone to take care of your pets and write specific instructions.

  • How will I create a will?

    Creating a will is the most fundamental aspect of estate planning. You can create a will following the traditional route through a lawyer or estate planning attorney, an online service, or by referring templates yourself. Moreover, the will must be under state laws.

  • Which are the areas of potential complication?

    In the end, being prudent and considering your areas of potential complications will be helpful. Moreover, every estate that exceeds the threshold limit qualifies for a probate process. If your estate is straightforward, executing the will is simple. However, if your estate is complex, the probate takes more time. Under such situations, consider hiring a probate lawyer for your estate.

What are some other planning considerations?

The following are some other estate planning considerations:

  • Inventory your estate
  • Review your beneficiaries
  • Update your estate-planning documents
  • Take professional help if required


Estate planning is an essential tool to secure your assets and to inherit them to the next generation. While reviewing the estate planning considerations, the last will is the fundamental document for managing and distributing your assets. Further, a complete estate plan minimizes your estate and inheritance taxes. Above all, reassess your estate plan at least every five years to pass a complete estate plan to your loved ones.

We at Clocr help you to create your complete estate plan. Clocr’s estate planning services include the last will, social media will, and digital estate. The Last Will helps you to secure your assets and leave a legacy for your next generation in just 10 minutes. And with Clocr’s digital estate, you can organize your digital accounts and information in one place. In the end, you can store all your estate planning documents in Clocr’s digital vault – your family’s cloud vault. So, for a one-stop estate planning solution – Join Clocr today!