Estate Planning Basics for Millionaires

If you're worth $1 million or $10 million, you need more than a will from LegalZoom. Here's what wealthy families need to protect themselves.

The Core Documents

1. Revocable Living Trust

A will that's properly probated takes 6-18 months and costs thousands. A properly funded trust avoids probate:

• Assets titled to trust: Bank accounts, brokerage, real estate
• Successor trustee: Who manages if you're incapacitated, who distributes when you're gone
• Pour-over will: Catches any assets not in trust at death

For most estates, this alone can save $15,000 - $50,000 in probate costs.

2. Financial Power of Attorney

Who handles your finances if you're incapacitated?

• Agent: Someone you trust implicitly
• Powers: Limited vs. broad—durable vs. springing
• Financial institutions: Some won't accept older POAs—review and update every 3-5 years

3. Healthcare Power of Attorney + Advance Directive

• Healthcare agent: Makes medical decisions if you can't
• Living will: Your end-of-life wishes in writing
• HIPAA release: Access to your medical records

4. Will

Even with a trust, you need a pour-over will. Also:

• Guardian designation: Who raises minor children
• Residuary clause: Distributes any assets not in trust
• Debts/expenses: Payment instructions

The Wealth Layer

Once the basics are done, consider:

Bypass Trust (Credit Shelter Trust)

For married couples, the "portable" estate exemption is now permanent—but a bypass trust still makes sense:

• Shelter both exemptions: $13.99M x 2 = $27.98M potentially protected
• Step-up in basis: Assets in trust get a new cost basis
• Control after first death: Spouse can be beneficiary, not uncontrolled

Irrevocable Life Insurance Trust (ILIT)

Life insurance is part of your estate if you own the policy:

• Create ILIT: Separate legal entity
• Transfer ownership: Trust owns policy
• Premium payments: Gifts to trust, trust pays premiums

Grantor Retained Annuity Trust (GRAT)

Transfer appreciating assets gift-tax-free:

• Annuity payments: You receive payments back
• Zeroed-out GRAT: Value of annuity = value of gift—minimal gift tax
• Success: Assets grow gift-tax-free

Charitable Remainder Trust (CRT)

Income to you, remainder to charity:

• Income stream: 5% - 50% to you or heirs for term of years
• Charitable deduction: Immediate, partial offset
• Capital gains deferral: Sell appreciated assets inside CRT

The Practical Steps

1. Gather documents: All accounts, policies, deeds, beneficiaries
2. Make list: Who gets what, specifically
3. Pick people: Trustees, agents, guardians
4. Fund the trust: Transfer assets—no transfer, no trust
5. Review every 3 years: Life changes, tax laws change

Common Mistakes

1. Not funding the trust: The #1 error—documents signed but assets not transferred
2. Joint accounts on death: Everything goes to "survivor" automatically
3. Beneficiary designations: These override wills—check them all
4. Outdated documents: Laws changed in 2017, 2019, 2020, 2021, 2022, 2023...
5. No disability plan: Who manages if you're incapacitated?

Cost

Basic estate plan (trust + POAs + advance directive): $3,000 - $10,000 Complex plan (multiple trusts, business succession): $15,000 - $50,000+

That sounds like a lot—until you remember what probate costs and what your time is worth.

Bottom Line

If you're a millionaire, you need a Plan. The only question is whether your Plan is executed or not. Get it done.