The Importance of Estate Planning

By Net Worth Advisory Group

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When was the last time you reviewed or updated your estate plan? Does it cover all the necessary documents and support your wishes? If not, you’re not alone—statistics show that only 32% of American adults had an estate plan in place in 2024.

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The consequences of neglecting to create an estate plan can be far-reaching for your loved ones, leading to unnecessary estate taxes, disputes among heirs, and costly probate delays. Take the case of Lisa Marie Presley’s recent estate dispute, or the ongoing battle over Jimi Hendrix’s estate, which has been tied up for over 50 years due to his lack of a will.

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Don’t leave your legacy vulnerable to the same fate. Here’s what you need to know about building a comprehensive estate plan to safeguard your family and your wishes.

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Basic Estate Planning

No matter how big or small your estate is, there are a few important documents everyone should have in place.

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Will

A will is the most familiar of the estate planning documents. It spells out your final wishes and names a person or entity to handle your financial affairs upon death. A will is especially important if you have minor children. If you don’t specifically name a guardian in your will, the choice will be made by the court with no consideration for your preferences.

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Medical Directive

Also known as a living will, this document describes what type of life-saving intervention you would like and in what situations it should be used.

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Healthcare Power of Attorney (HPOA)

The last thing you want is to leave your family in the dark regarding important medical information and how you want to be treated in the event of a medical emergency. If there are no documents in place, conflict can arise over who should make the decisions and what course of action should be taken. This document identifies a specific person who is authorized to make medical decisions on your behalf. It can be used in conjunction with a medical directive, or it can be used on its own.

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Power of Attorney (POA)

Covering everything else outside of medical rights, this document allows an authorized individual to make decisions on your behalf, including financial and business decisions. There are several types of POA; the choice of which one to use is highly personal. Make sure to involve whomever you choose to act as your designated agent—they should be well aware of the responsibility and willing to take on the role.

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Trusts

Though wills are the most well-known estate planning vehicle, trusts are the true lynchpin. This is because they save both time and money by removing assets from your estate and avoiding probate. It operates as a separate entity that holds all your assets while you’re alive, thereby removing them from your personal estate. The trust’s assets will then be distributed to your beneficiaries in accordance with the terms of your trust document, which means your estate will avoid the hassle and expense of probate. 

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Advanced Estate Planning

In addition to the basic estate planning described above, individuals who have estates valued at $10,000,000 or more may want to consider more advanced planning techniques. Currently, an individual can leave an estate up to $13.61 million (increasing to $13.99 million in 2025) without being charged estate tax. Of course, there is an unlimited exemption for amounts left to a spouse. If you are nearing this limit, proactive estate planning can help you reduce or eliminate your estate tax liability and take advantage of the portability option available for a surviving spouse, where applicable.

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Need Clarity on Your Estate Plan?

Estate planning can feel overwhelming with all the details, but it’s wise to get your affairs in order sooner than later. At Net Worth Advisory Group, we’re here to guide you through the process and connect you with an experienced estate planning attorney. If you have any questions about your options, we’re here to help. Call us at 801-566-6639 or schedule a complimentary, no-obligation consultation to see if we are a good fit to help you pursue your goals.

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To learn more, visit our website.

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About Net Worth Advisory Group

Founded in 2003, Net Worth Advisory Group is an independent, fee-only, CERTIFIED FINANCIAL PLANNER® and investment advisory firm located in Salt Lake City, Utah. We specialize in helping people transition from the workplace into retirement and ensuring that those who are already retired will not outlive their nest egg. Our top priority is to have clients experience a greater sense of ease with diligent, personalized wealth care and the implementation of customized financial plans and ongoing personalized asset management. We equip all clients with a comprehensive financial plan, meeting every six months to update as needed and review investment performance. Our team is passionate about providing comprehensive financial planning with the fee-only model, and we love feeling like we’re making a difference in our clients’ financial lives.

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As a NAPFA-registered fee-only advisory firm, our recommendations are untainted by a hidden agenda to sell financial products paying large commissions. Unlike our competitors at brokerage firms, insurance companies, and banks, we are compensated solely by our clients, so we are financially motivated to provide objective advice that is always in our clients’ best interests. Anyone can call himself or herself a financial planner, but only an advisor with the CERTIFIED FINANCIAL PLANNER®, CFP® designation has met the education, examination, experience, and ethical requirements mandated by the CFP® board. According to the CFP Board, there are 97,000+ CFP® professionals in 2023, representing about 1 in 3 financial advisors in the U.S. Net Worth advisors are also members of NAPFA, which only has about 4,600 advisors, and are either CFP® professionals or CFP® professionals in training.

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Net Worth Advisory Group’s mission is to significantly improve the lives of our clients by delivering exemplary financial planning and wealth management advice that enables them to live the lives they have imagined.