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Charting Your Financial Course

Estate planning involves family relationships. You may need to take action now to lessen the financial and emotional burden incapacity or death can bring. Estate planning encompasses more than just minimizing estate and gift taxes. It should provide for the efficient use of your assets during your lifetime, the disposition of your assets after death, and the possible reduction of taxes and costs associated with transferring your assets.

Contrary to what many people think, you don't need to be a millionaire to have an estate plan. An estate plan is an important part of any ongoing financial planning process.

Key Elements of any Legacy Plan

A will
A will is a legal document that expresses an individual's wishes regarding the disposition of his or her property after death. A will is generally revocable and amendable until death and only becomes effective upon death. By preparing a will, an individual is able to control the passing of his or her property on his or her terms. Without a will, state law will dictate to whom a decedent's property will pass.1 Each state has its own laws as to what requirements are necessary for a will to be valid. Before executing a will, check with your attorney to determine what the requirements are. An improperly executed will is likely to be declared invalid and not be recognized by the local probate court.


A trust is an arrangement in which a trustee holds and manages money or other assets for the benefit of another. Trusts may be created to accomplish broad or specific goals, such as:
  • Personal and financial safeguards for family or other beneficiaries
  • A means of controlling or administering your assets
  • Simplifying the estate administration process by bypassing the probate process
  • Deferring or reducing taxes


A durable power of attorney for assets 
A durable power of attorney for assets (DPOA) is used to nominate someone to make financial decisions for the principal. The purpose of a DPOA is to ensure someone is always available to make financial decisions in case of incapacity. A DPOA will be needed for any property not transferred to a living trust because property transferred to a living trust can be managed by the trustee. A DPOA is very flexible, easy to create and involves little cost. A DPOA is revocable by the principal. It can be drafted broadly or on a very limited basis.2


A durable power of attorney for healthcare (or its equivalent) 
A durable power of attorney for healthcare (DPAH) is used to nominate someone to make healthcare decisions for the principal. The DPAH gives this person the authority to determine which medical treatment to consider should the principal become incapacitated. Most states have statutes that authorize the appointment of a healthcare agent. A DPAH is easy to create and is revocable. The decision of whom to nominate should not be taken lightly because, if the DPAH is ever used, it will be a very difficult time for all those involved.


One of the most important steps in planning your estate is determining who should make decisions for you in the event of your incapacity and what you want to happen to your loved ones and your assets after you have passed away.

Key Questions:

  • Who should manage my assets and take care of me in the event of my incapacity?
    Family? Friends? Bank or Corporate Trustee?
  • Who should carry out my estate plan after my death?
    Family or Friends? Bank or Corporate Trustee? Probate Court?
  • Who should take care of my children if they are minors at my death?
    Parents? Siblings? Friends?
  • Who should receive my assets at my death?
    Family? Friends? Charity?
  • When should my assets be distributed?
    Immediately after my death? At some specified time after my death? Upon beneficiaries reaching certain ages?
  • How should my assets be distributed?
    Should my spouse have a right to the income before my assets pass to others? Will my children need a Corporate Trustee to handle their inheritance? Should my beneficiaries attain certain goals I specify before they receive my assets?

Professional Guidance
Just like your financial plan, it's important to review your will and other estate planning documents regularly, or when significant life events occur. A trust and estate attorney can help you create a financial plan that includes estate planning strategies designed to help you reflect the things that are important to you. You'll need an attorney's assistance to create a trust, and for tax exclusions, you will need to consult your tax professional for details.

Additional Resources

    Documents to Review     Tools To Use  
  Estate Planning Using Life Insurance     Estate Tax Calculator
  Framing Your Legacy     How Much Insurance Do I Need?
  Understanding Trusts
    Taking Minimum Distributions While Preserving a Legacy
  What The Wealthiest Families Know: 2013 & Beyond      


1 There are many different types of wills. A detailed discussion is beyond the scope of this information. Please consult with your attorney for more information.
2 Each state has its own set of requirements for a DPOA to be valid so your local attorney should be consulted.

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any fixed subaccount crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company.

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