Estate planning essentials: What you need to know

Common mistakes to avoid and key documents you’ll need to help protect your wealth

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Estate planning is an important process that involves more than just preparing for your passing. It’s about aiming to secure your financial future and protect your loved ones. 

Knowing where to begin can be challenging. But more investors than ever are creating estate plans. In 2014, only 56% had a wealth transfer plan, but that number jumped to 72% by 2022, according to a UBS survey.1 This estate planning checklist can help jump-start the process of creating an estate plan that works for you and your loved ones. Once you’re ready, see our guide to getting started.

What does a basic estate plan include?

Four foundational documents are likely to play a key role in your comprehensive estate plan.

  • Will

    A will is perhaps the most well-known estate planning document. It specifies how assets will be distributed to your beneficiaries and designates guardians for minor children and dependents. Without a will, the state will make decisions on these issues, which may not align with your wishes.

  • Trust

    A trust also allows you to direct assets to your heirs but can give you more control over how those assets are distributed. Certain types of trusts also can help minimize your heirs’ potential tax burdens. What’s more, trusts enable your estate to bypass probate, which can be a public and often time-consuming, costly process.

  • Financial power of attorney

    A financial power of attorney appoints someone you trust to manage your finances if you become severely injured or incapacitated. Without it, the court may appoint a guardian.

  • Healthcare power of attorney

    Similarly, a healthcare power of attorney allows someone to make medical decisions on your behalf if you cannot. You may also want to create an advance directive, which outlines your healthcare wishes.

What taxes do you need to plan for in your estate plan?

For high-net-worth individuals, in particular, reducing estate tax exposure is a key consideration when building an estate plan. In 2025, a married couple can protect nearly $30 million in assets through their combined lifetime estate and gift tax exemptions. But assets beyond that amount can be taxed at rates as high as 40%.2

Strategies such as gifting assets, creating trusts, and using tax-advantaged vehicles, including family-limited partnerships, can help reduce estate tax liabilities and preserve wealth across generations.

Navigating the complex world of estate taxes can be challenging, so consider working with a professional, such as an estate tax attorney, with expertise in informing these types of estate plans. 

Asset protection strategies

Protecting your assets is vital, and several tools can help shield your wealth from creditors and minimize tax liabilities:

    Revocable trusts help provide flexibility and control, as you can amend or revoke them at any time. However, they don’t offer protection from creditors. Irrevocable trusts remove assets from your estate, providing better protection from creditors and potential lawsuits.

    Common pitfalls in estate planning

    Many people make mistakes when setting up their estate plans, which can lead to complications for their families. One common error is not updating the plan after major life changes such as a marriage, a divorce, or the birth of a child.

    Another pitfall is neglecting the tax impact. Estate taxes can eat into your estate’s value if not properly managed. Regular reviews with your estate planning attorney and financial advisor can help minimize these taxes.

    A mistake to avoid is shying away from conversations about inheritance plans with family members. A UBS survey found half of benefactors have not shared with their heirs how much they are worth or their most recent will.3 Having estate planning conversations with your loved ones early and often can help ensure fewer conflicts and greater ease in carrying out your wishes.

    Protecting your financial legacy

    Estate planning is essential for helping to protect your financial legacy and provide for your loved ones after you pass away. By understanding and implementing the key elements of estate planning, from the key documents you need to strategies to help protect your assets and benefit your heirs, you can help ensure your wishes are honored and your family wealth can be extended potentially for generations to come.

    Creating a Legacy strategy as part of a larger wealth management framework, such as UBS Wealth Way, can help organize your financial life and help you pursue all of your long-term goals.

    At a glance

    • Usewills, trusts, and powers of attorney to help ensure your wishes are followed and help protect your assets.
    • Consider trusts, gifting, and life insurance to help minimize taxes and preserve wealth.
    • Update plans, address taxes, and discuss inheritance to help avoid conflicts.

    Crafting your legacy through estate planning strategies

    Work with a UBS Financial Advisor to create a plan that reflects your core values and maximizes the impact for those you care about most.

    Woman walking on a boardwalk over dunes near a beach at sunset

    Crafting your legacy through estate planning strategies

    Work with a UBS Financial Advisor to create a plan that reflects your core values and maximizes the impact for those you care about most.

    Learn more

    1,3 “Share it well: Discussing and dividing wealth across generations ,” UBS Investor Watch.

    2 “The Estate and Gift Tax: An Overview ,” Congressional Research Service, September 2024.

    UBS Wealth Way is an approach incorporating Liquidity. Longevity. Legacy. strategies that UBS Financial Services Inc. and our Financial Advisors can use to assist clients in exploring and pursuing their wealth management needs and goals over different time frames. This approach is not a promise or guarantee that wealth, or any financial results, can or will be achieved. All investments involve the risk of loss, including the risk of loss of the entire investment. Time frames may vary. Strategies are subject to individual client goals, objectives and suitability.

    The information contained in this newsletter is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc.

    Neither UBS Financial Services Inc. nor its employees (including its Financial Advisors) provide tax or legal advice. You should consult with your legal counsel and/or your accountant or tax professional regarding the legal or tax implications of a particular suggestion, strategy or investment, including any estate planning strategies, before you invest or implement.

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