Protect Your Loved Ones With an Estate Plan
schedule 7 minutes

Taking a proactive approach to passing on your assets can help bring peace of mind to you and your family.

schedule 7 minutes

Estate planning is one of the most important things you can do to provide for your family into the future—no matter your age, health status or net worth. An estate plan allows you to choose who will care for your minor children in the event of your death, as well as who will inherit your assets. It also helps you pass on your assets in a way that can minimize the tax burden on your loved ones. Here are some suggestions on how to get started.

Draft a will

In a will, you state who gets your assets, when they will get them and in what form. Wills generally include the designation of an executor, the person in charge of carrying out the instructions you’ve laid forth. A will forces your estate into probate. Without a will, the court will distribute your assets according to the laws of the state you reside in, and they may end up in the hands of a relative you did not foresee receiving them.

If you have minor children, a will allows you to appoint a guardian to take care of them in the event of your death. If you leave assets to your children, their guardian may also be in charge of managing those assets and making sure they are spent and invested appropriately. Be sure that potential guardians understand the full extent of their responsibilities.

Make a plan in the event that you are incapacitated

Unpleasant as it might be to think about, you should plan not only for the eventuality of your death but also for the possibility of becoming incapacitated during your life. You can establish a plan for your financial matters through a power of attorney and for your health-care decisions through a health-care proxy or health-care power of attorney. When you designate a power of attorney, you legally authorize someone to make medical decisions on your behalf if you lose the ability to make those decisions yourself. In addition, you should draft a living will, which states your wishes regarding life-sustaining medical intervention.

Consider a trust

A trust is a legal entity that allows a designated third party (a trustee) to manage assets on behalf of the trust’s beneficiaries. A trust gives you more control over the way your assets are passed down than a will and the probate process. Trusts can minimize the amount your beneficiaries pay in taxes and probate, too.

Trusts come in two main varieties, each with certain advantages and disadvantages. Revocable trusts give you access to your assets during your lifetime and still designate who will receive those assets after you die. However, the tax advantages are limited.

With an irrevocable trust, you permanently cede control of your assets to a trustee in order to remove them from your estate. Irrevocable trusts typically offer more tax advantages, both to you during your lifetime and to your beneficiaries when the assets pass to them. The main drawback is that you lose the power to use your assets in any way other than that designated by the trust.

Other trusts are designed for more specific situations. For example, qualified terminable interest property trusts, or QTIP trusts, provide for a surviving partner while also designating where any remaining assets go after that partner dies. People in second marriages often use QTIP trusts, since they allow you to pass on assets to both your current partner and children from a previous marriage.

Other estate-planning vehicles

Life insurance provides your beneficiaries with a designated amount of money after you die. It is often used toward funeral expenses, to pay estate administration costs and to settle outstanding debts, as well as replace the insured’s income for their surviving dependents. The proceeds may be excluded from agreements like prenuptials or wills. Life insurance can be especially effective in an irrevocable life insurance trust, which may remove the policy’s value from your taxable estate. In exchange, you give up borrowing against the policy or changing beneficiaries, unless your trust contains certain provisions that allow your trustee to make policy changes and access trust assets. Talk to your qualified and independent tax and legal representatives for details.

There are plenty of other estate-planning strategies to consider. For example, stretch IRAs (individual retirement accounts) allow you to pass on your IRA assets to a beneficiary while extending their tax-deferred status. Other savings vehicles can be used for estate-planning objectives as well. For instance, contributions to 529 college savings accounts are eligible for the annual gift tax exclusion over the course of five consecutive years, allowing you to reduce your taxable estate while funding the education of a relative.


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 affiliates, their distributors and 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 or attorney.

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. 

Pacific Life’s Home Office is located in Newport Beach, CA.


This website or its third-party tools use cookies, which are necessary to its functioning and are required to achieve the purposes illustrated in our online privacy policy.