Five documents, one titling review, and your family is spared a mess

Will versus revocable trust

A will directs the property that passes through probate and names guardians for minor children. It only takes effect at death, and it is a public court filing. A revocable living trust is a container you create while alive, transfer assets into, and control as trustee. At death, your successor trustee distributes the assets under the trust terms without court involvement, privately.

Neither saves federal estate tax on its own. A revocable trust's assets remain in your taxable estate. What a trust buys is process: probate avoidance for the assets you actually retitle, privacy, a seamless plan for incapacity, and simpler handling of real property in multiple states. Its cost is upfront drafting, usually a few thousand dollars, plus the discipline to retitle deeds and accounts.

Rules of thumb worth applying. If you own real estate in more than one state, a trust probably pays for itself. If you live in a state with slow, expensive probate, likewise. If your estate is a house, a 401(k) and a bank account in a state with a streamlined small-estate process, a will plus correct beneficiary designations may be entirely sufficient.

Beneficiary designations, titling, and TOD or POD accounts

Most American wealth does not pass by will. It passes by contract. Retirement accounts, annuities, life insurance, and any account with a transfer-on-death or payable-on-death instruction go to the named person directly, and that designation controls even if your will says the opposite. This is why a beneficiary audit is the highest-value hour in estate planning.

Work through every account: 401(k) and 403(b) plans from current and former employers, IRAs, HSAs, life insurance including group coverage through work, annuities, and pensions. Name a primary and at least one contingent beneficiary on each. Percentages must total 100%. Use full legal names and, where the form asks, dates of birth so the custodian can identify the person years later.

Transfer-on-death registration for brokerage accounts and payable-on-death for bank accounts avoid probate cheaply, and are available in nearly every state. Many states also allow transfer-on-death deeds for real estate. These tools are simple and effective, but they are blunt: they pay outright, immediately, with no provision for a beneficiary who is a minor, has creditor problems, or receives means-tested benefits. When any of those apply, a trust is the better container.

Federal exemption, gifting, and the states that tax anyway

The federal picture for 2026 is generous. The IRS set the estate basic exclusion amount at $15,000,000 per decedent and the gift tax annual exclusion at $19,000 per recipient, with a $194,000 exclusion for gifts to a non-citizen spouse. The annual exclusion is per giver and per recipient, so a married couple can move $38,000 to each child every year without touching the lifetime exemption or filing a gift tax return.

Because the higher exemption is now permanent rather than sunsetting, most families should shift attention from estate tax avoidance to basis planning. Appreciated assets held until death generally receive a step-up in basis, which is frequently worth more than a lifetime gift of the same asset. Gifting a low-basis stock to a child transfers your basis along with it and can create a larger capital gains bill than the estate tax you were avoiding.

State taxes are the live risk. Twelve states plus the District of Columbia impose an estate tax in 2026, and a handful of states impose an inheritance tax paid by the recipient, with close relatives usually exempt or taxed at lower rates. Exemptions are far below the federal level: Oregon at $1 million, Illinois at $4 million, Hawaii at $5.49 million, Maryland at $5 million, Maine at $7.16 million, and Connecticut aligned near the federal amount. Confirm your own state and any state where you own real property, because both can assert a claim.

Digital assets and the practical handoff

Your executor will need access to email, cloud storage, photo libraries, password managers, cryptocurrency wallets, loyalty programs, and possibly a business's online accounts. Terms of service and federal privacy law often prevent a provider from handing those over without explicit authorization. Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which creates a legal path for executors and agents to manage digital assets and gives priority to any online tool the provider offers, such as Google Inactive Account Manager or Apple Legacy Contact, per Nolo's explanation of RUFADAA.

Three concrete steps handle it. Set the provider-level legacy contacts on your major accounts, because those settings override your will. Add digital asset authority language to your will, trust and power of attorney. And keep a password manager whose master credential your executor can reach through your attorney or a sealed letter. Self-custodied cryptocurrency deserves special care: with no key, there is no recovery, and no court order can produce one.

• Audit every beneficiary form. Retirement plans, IRAs, HSAs, annuities, and both individual and group life insurance.
• Sign a durable financial power of attorney. And a healthcare proxy, advance directive and HIPAA release, executed under your state law.
• Retitle what the plan requires. Fund the trust if you created one, and confirm survivorship language on deeds.
• Set provider legacy contacts. Then record digital asset authority in your documents.
• Check your state exemption. And any state where you own property, since state thresholds start far below $15 million.
• Revisit after every life event. Marriage, divorce, birth, death, a business sale, or a move to a new state.

Estate law is state law, and it changes. Have documents drafted and reviewed by an attorney licensed where you live. Advisory services are offered through a registered investment adviser; we coordinate with your attorney and tax professional but nothing here is individualized legal or tax advice.