By: John P. Napolitano, CFP®, CPA, PFS, MST

For many, updating their estate plan is one of the last things on their mind. Yet when a friend passes suddenly or you hear a horror story of an unplanned estate gone awry, the idea flashes.

If you don’t care about the following two issues, then go ahead, ignore making any updates and the lawyers and taxing authorities may be your largest beneficiaries.

The first issue is taxation. Many are lulled into thinking that the tax penalties of their death are minimal because the federal exemption is set at $11.58 million per taxpayer or $23.2 million per married couple. But there may be more than just federal taxes to consider.

Your death estate often includes assets that you don’t think about every day. Your life insurance, 401k, or the value of a business interest all may be included. Next, not all states are as generous as the Federal Government. My home state of MA has an individual exemption of $1 million or $2 million per married couple. This means that MA residents with assets including life insurance death benefits above $1 million or $2 million will be taxed at a rate just north of 10%.

The second reason to update your estate plan would be to avoid chaos and confusion upon your death or incapacity. A solid estate plan is a set of documents that may be just as valuable while you’re living than to your heirs after your passing.

Your current living benefits to an updated estate plan would be that you have a valid health care proxy and durable power of attorney. Most pros feel that these two documents should to be updated every 3–5 years. This allows people of your choosing to make both health care and financial decisions on your behalf should you become incapacitated.

A living trust can also provide benefits to you while living, the first being privacy. Trusts are named whatever you want, minimizing the frequency your name appears online. A second benefit is that you appoint the person in your trust to act as a successor trustee on your behalf. Trusts that clearly state the key factors or people who make the decisions regarding your disability, can simplify the process immensely.

Disarray is possible even for those with current plans in place. This is typically due to lack of clarity. It’s a common error to think that your four children won’t argue because you’ve left the family business to them equally. Rather than ensure family harmony, your plan without guidance outlining compensation, roles and rules for sibling minority owners who don’t work in the business are a recipe for disaster.



This information is not intended to be a substitute for individualized legal advice.

John Napolitano, US Financial Advisors, US Wealth Management and LPL Financial do not provide legal advice or services. Please consult your legal advisor regarding your specific situation.

John P. Napolitano CFP®, CPA is CEO of US Wealth Management in Braintree, MA. Visit JohnPNapolitano on LinkedIn or The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. John Napolitano is a registered principal with and securities offered through LPL Financial, Member FINRA/ SIPC. Investment advice offered through US Financial Advisors, a Registered Investment Advisor. US Financial Advisors and US Wealth Management are separate entities from LPL Financial. He can be reached at 781-849-9200. 1-05045793 (9/11/20)