Estate planning taking a backseat to retirement planning

 April 10, 2015

by Mark Huffman

cons-affWe are constantly told the importance of retirement planning. Save for the future, we are told, because you don’t want to outlive your money. It’s true. And it’s also true that Americans as a whole are not doing a very good job of saving money for retirement.

But at the end of retirement comes death. And while there is little data to back it up, it appears we are doing an even worse job of planning for that eventuality – what’s known in financial services circles as estate planning.

Michelle Perry Higgins, principal at wealth management firm Maloon, Power, Pitre & Higgins, of San Ramon, California, says her clients rarely ask about estate planning, though she wishes they did.

Low priority

“Estate planning is a low priority to many compared to their retirement plan,” Higgins told ConsumerAffairs. “I am the first one to bring up the conversation during our meetings.”

In those meetings, Higgins says she asks clients to make sure they have the correct beneficiaries on their accounts. If they have an estate plan, she asks if it needs to be updated.

Concerned that clients might be overlooking some of the important aspects of estate planning, Higgins created the Everything Binder in 2013, a binder with tabs, all related to important documentary topics for an individual or family.

“As you can imagine, I am great at nagging my clients to complete their estate plan and document everything for their heirs,” Higgins said. “I have seen firsthand the disaster that ensues for their heirs if they have nothing in place.”

Beyond a will

An estate plan starts with a will but goes beyond that document. While a will designates an executor of the estate, the estate plan offers guidance to that individual, in keeping with the wishes of the deceased. In recent years there has been growing emphasis on providing instructions on end-of-life medical care and funeral plans.

An estate plan is especially important if the disposition of assets is not cut and dried; for example, if disposition of business assets is an issue. Higgins says an estate plan addresses the questions that arise in a less-than-simple estate.

“Do I want to leave my half of the estate to my spouse or have restrictions on it by creating a trust for my spouse’s benefit? Who will be my beneficiaries and on what terms will they receive their inheritance? These are just a couple of the typical questions that need to be addressed,” she said.


If you have a special needs child, or a child who does not manage money well, maybe you should set up a trust for their benefit. If you have a minor child, a provision should be made for their guardianship if both parents are deceased.

What happens is you die without an estate plan in place?

“You either have an estate plan or your state has a default plan, known as intestacy, for you,” Higgins said.

For example, you may have four children but only want three to inherit your estate. If you don’t have an estate plan, then the state rules would apply. And if you don’t have an estate plan, your estate will likely be probated.