The important thing to remember is that no one expects you to be an expert, Schumacher said. That s why you probably want to have some help an attorney, a financial advisor and an accountant. Such advisors can help determine how much planning you need and whether a will is enough, or if your assets warrant a trust or a full estate plan. In those cases, the person s state of residence decides how to divide their assets based on a standard formula a formula far different than most of us would choose for ourselves. That may sound like a very high number, but with so many people these days having stocks and mutual funds in their retirement plans, many people are at that level.
State tax takes an additional bite.
The biggest problem, Hall and Schumacher agree, comes when the surviving spouse dies. The way to avoid that is with a bypass trust. If the first spouse to die has put their estate in a bypass trust, the surviving spouse has access to the money as long as they live. But, when they die, the assets in the bypass trust pass tax-free to a second beneficiary a child or grandchild, for example. Other important tools include generation-skipping trusts, which pass assets to grandchildren, and charitable remainder trusts, in which the assets revert to a charity once the beneficiary passes away and no longer needs them.