Ask yourself – what does your estate plan look like? Do you have a will? Power of attorney documents? A living trust? And just as important, when was the last time any of it was updated?
For most people, the answer is: not recently. Maybe you first put something in place when the kids were little or before taking a big trip. But now the kids are grown, your goals have changed, and your documents are probably collecting dust. Estate planning is one of the most overlooked parts of financial planning, but it’s essential, especially in 2025, as we face a potentially shifting tax landscape.
Let’s walk through what you may want to know right now.
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What’s Changing in 2025
Currently, federal tax rates are near historic lows. Unless legislation is passed to extend the current laws, these rates are set to increase in 2026. That means you could pay more in taxes on income, investments, and your estate.
In addition, the estate tax exemption is scheduled to drop. Right now, you can leave nearly $15 million per person without triggering federal estate taxes. Anything beyond that is taxed at 40 percent. However, if Congress does not act, this limit is expected to drop to around $7 million per person. That’s a dramatic decrease and could put more families at risk of paying substantial estate taxes.
If this change could affect you, it may be wise to consult with an estate planning attorney soon. There are strategies that can help lock in today’s higher exemption, but they must be implemented before the law changes.
Why Even Modest Estates Need a Plan
You might think estate planning is only necessary for the ultra-wealthy. But even if you have modest assets, your estate will still go through probate without the proper documents in place. Probate can be time-consuming, costly, and emotionally draining for your family.
At a minimum, every adult should have an updated will and power of attorney documents. These tools can help ensure your wishes are honored and your loved ones are protected. And if you plan to leave money to children, grandchildren, or charitable causes, these documents become even more important.
What Is a Living Trust and Do You Need One?
Many of the successful families we work with at REAP Financial choose to set up a living trust. It’s not just about wealth; it’s about control, privacy, and avoiding probate.
A living trust allows you to dictate how and when your assets are distributed. Want your children to receive funds at different ages or use them specifically for education? You can structure that into the trust. Want to leave money for future generations or charitable causes? A living trust can handle that, too.
However, one of the most common mistakes we see is creating a trust but forgetting to fund it. If your assets aren’t titled in the name of the trust, it won’t serve its purpose. In many cases, you’ll want to title your home, car, bank accounts, and brokerage accounts in the name of the trust to ensure they pass smoothly to your heirs.
Not all accounts should be placed in a trust. Retirement accounts like IRAs and 401(k)s have specific tax implications and distribution rules. Often, naming individual beneficiaries is more advantageous than directing those funds through a trust. Work with a professional who understands these nuances and can tailor a plan to your situation.
Trusts Aren’t Just for the Wealthy
There are many types of trusts beyond the revocable living trust. Irrevocable trusts, charitable trusts, and others can help protect your wealth, reduce taxes, and ensure your legacy stays within your family. Whether you have $500,000 or $15 million, if your goal is to leave money behind, a trust may be a smart part of your estate plan.
One viewer, Jacqueline, recently asked a great question about Social Security: Why do so many advisers recommend taking benefits at full retirement age or waiting until age 70? Does early filing only make sense for high-net-worth couples?
It depends on your broader financial picture. Many high-net-worth individuals may benefit from claiming Social Security earlier. That’s because they often retire earlier and begin drawing from their portfolios sooner. In these cases, using Social Security to supplement income can reduce the need to sell investments and potentially preserve long-term wealth.
High earners may also remain in the same tax bracket – or even move into a higher bracket – in retirement. Claiming benefits earlier can help balance withdrawals, preserve tax efficiency, and leave more for long-term care or legacy goals. As with any strategy, the right approach depends on your needs, assets, and timeline.
Advanced Planning for Business Owners and Larger Estates
If you own a business or have more than $5 million in assets and plan to leave a legacy, your estate planning needs are likely more complex. In these cases, basic documents may not be enough. You’ll want to work with a specialist who understands your goals, values, and the legal tools available to protect what you’ve built.
Be sure to vet any estate planning professional you hire. They should have experience working with clients at your wealth level and be able to serve as a fiduciary who puts your interests first.
The Bottom Line
Estate planning isn’t one-size-fits-all, but one thing is universal: you don’t want your loved ones navigating confusion and conflict after you’re gone. Whether you need a simple will or a comprehensive trust structure, getting your plan in place now can help save your family time, stress, and money later.
At REAP Financial, we help successful families protect what they’ve built and pass it on with purpose. If your estate plan hasn’t been reviewed recently, let’s talk. We can help ensure it reflects your wishes, your family, and the latest tax laws.
Contact Us
Phone: (512) 249-7300
Our Main Office Address
REAP Financial
9414 Anderson Mill Rd #100
Austin, TX 78729
Chris Heerlein, a Texas native, is an Investment Adviser Representative and CEO at REAP Financial, servicing its private client group, helping private business owners, top-level executives and affluent individuals create, transition, preserve and grow their wealth over generations. REAP serves corporate and private clients, offering objective financial and investment advice, tax planning, business succession planning, access to webinars, and exceptional service that creates generational relationships built on trust. Affluent families and individuals look to Chris and his team of advisers to empower them by providing organization, accountability, objectivity, proactivity, education, and partnership. Chris is a multi-published author with his most recent release, “How to Retire Rich and Look Poor in Retirement: The Millionaire’s Tax Playbook” (2026), “Divorce With Dignity” (2019) and “Money Won’t Buy Happiness But Time To Find It” (2017).
In addition to his work with clients, Chris hosts Wealth Radio each Saturday at 11 a.m. on NewsRadio KLBJ and has been a featured speaker on other podcasts. He is also the host of Retire Ready TV on KXAN each Monday and Wednesday at 6 p.m., as well as REAP Financial’s YouTube channel.
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