Written By: Bruce Jones

When it comes to estate planning, you may think it is just getting your Will or trust in order.  You wouldn’t be wrong, but that is just part of it.  A properly planned estate plan would also include provisions to transfer your assets smoothly to your beneficiaries.  There are also other documents you’ll need like a power of attorney and a health care directive if you become incapacitated.

So, what should your goals of your estate plan be?  Do you want to secure your family’s financial future?  Are you trying to reduce your estate taxes?  Would you like to provide for your favorite charity or something else?  Let’s look at the 6 important components of an estate plan.

  1. Will
  2. Trust
  3. Power of Attorney
  4. Health Care Directive
  5. Beneficiary Designation
  6. Regular Review & Revision
  1. Will

A Will is a great place to start.  It is a legal document that outlines how you would like your assets and property to be distributed after death.  It allows you to provide instructions on who should inherit your assets as well as how they should be divided, how your debts and taxes should be paid and who should be in charge of administering your estate.  Your Will should include the names of the beneficiaries and their relationship to you, as well as any specific instructions on your assets.

  1. Trust

A trust is an arrangement in which a person, the trustor, gives control of their property to a trustee, who manages them for the benefit of a beneficiary.  Your trustee has a fiduciary duty to manage the assets to the best interest of the beneficiary according to the terms of the trust.  Trusts can be used for a variety of purposes, including avoiding probate, providing for minor children or other dependents, protecting assets from creditors or lawsuits, and reducing estate tax liability.  There are many different types of trusts, each with its own specific purposes and requirements, so it is very important to consult with an estate planning attorney to determine which type of trust is right for your individual needs.

  1. Power of Attorney

A power of attorney is a legal document in which you would authorize another person to act as your trusted person and make decisions on your behalf.  A power of attorney can be useful in situation where you are unable to make decisions due to illness or incapacity, or when you may be otherwise unable to manage your own affairs.  It is important to choose a trusted power of attorney carefully due to the fact that they may be authorized to sign legal documents, manage investments or make healthcare decisions on your behalf.  So, make sure that you create a power of attorney document that clearly spells out the extent and limitations to your chosen trusted person.

  1. Health Care Directive

Including a healthcare directive as part of your estate plan is important because it can help ensure that your healthcare wishes are respected and followed in a manner that is consistent with your values and beliefs in case you are unable to make medical care decisions for yourself.  It can also ease the burden on your family members who may be called upon to make those difficult medical decisions on your behalf.

  1. Beneficiary Designation

Having a clear and up to date beneficiary designation is important to your estate plan as it supersedes other instructions about asset distribution.  A beneficiary designation is an individual, organization or institution who should receive your assets or benefits from your retirement accounts, such as an IRA, 401(k) plan, a life insurance policy, or annuities among others.  It is advised that you consult with an estate planning attorney to make sure your beneficiary designations align with your overall estate plan.

  1. Regular Review & Revision

It is very important to review your existing estate plan on an annual basis or in the event of a significant life change, i.e., marriage, birth/adoption of a child, divorce, or death of a family member.  It is also a good idea to review if you have experienced a change in financial status, i.e., retiring, lost job, college funding or have new financial goals.

In addition to these 6 important components of your estate plan, it is also essential to consider meeting with a tax professional, estate planning attorney & a financial professional.  This team of professionals can help identify other vehicles of asset protection and negative cash flow preventative solutions. Just remember your main priorities in an estate plan are to ensure that your assets are distributed in the way you prefer, that someone else has the authority to make decisions on your behalf if you are unable to do so and that your beneficiaries are clearly defined.

Important Notes

  1. Make sure your Will is worded in the way you have meant it to say.
  2. Your named beneficiaries should be over the age of 21 and mentally capable.
  3. Always name a guardian and back up guardian for your minor children.
  4. You should have a letter of intent to provide details how you’d like to be buried and other requests; and consider prepaying your funeral expenses.
  5. Communicate your plan to your family members and attorney and share location of your documents (fireproof lockbox) with them.
  6. Schedule a meeting with a Financial Professional to help you navigate through your estate planning goals.
  7. Retain an attorney who specializes in estate planning to help prepare the proper documents that includes how your assets will be distributed.
  8. You don’t have to be rich to have an estate plan.
  9. Everyone should have a Will!


  1. Pennmutual.com
  2. Practical Guide to Estate Planning Essential. Ray Madoff, Cornelia Tenney, Martin Hall, Lisa Mingolia
  3. The Complete Book of Wills, Estates & Trusts. Alexander Bove Jr, Esq. & Melissa Langa, Esq.
  4. Pennsylvania Estate Planning. William Hussey II
  5. https://www.investopedia.com/articles/retirement/10/estate-planning-checklist.asp

Registered Representative of, and Securities and Investment Advisory services offered through Hornor, Townsend & Kent, LLC (HTK). Registered Investment Advisor, Member FINRA/SIPC. 600 Dresher Rd., Horsham, PA 19044, USA. 800-873-7637, www.htk.com. HTK is a wholly-owned subsidiary of The Penn Mutual Life Insurance Company. 1847Financial is not affiliated with Hornor, Townsend & Kent, LLC

This information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal tax professionals for specific information regarding your individual situation.