How to leave an inheritance

By Joseph M. Dionisio, CFP®, Senior Wealth Strategist | Citizens Private Wealth

The decisions involved in leaving an inheritance are deeply personal. Inheritance planning determines not only who will receive your financial assets and valued possessions, but also how the process will unfold. These choices reflect your values, relationships and hopes for the future.

Despite the importance of these decisions and the $124 trillion in wealth transfers anticipated by 2048, many individuals have yet to establish a formal plan.¹ In fact, only 24% of adults reported having a will (or revocable trust) in 2025, a foundational estate planning document for directing inheritances.²

Without proper planning and legal documentation, your assets may be distributed according to state law, potentially benefiting individuals you did not intend and leading to family disputes. Proactive planning helps ensure your wishes are honored and can make the transfer of your estate more efficient and less stressful for your beneficiaries.

Steps to leave an inheritance

Whether you're starting from scratch or reviewing an existing strategy, these seven steps can help you leave an inheritance with clarity and confidence.

1. Take an inventory of your assets

An inheritance typically includes financial and personal assets such as:

• Bank accounts
• Investments
• Real estate
• Retirement accounts
• Personal property like cars, jewelry, art and family heirlooms
• Digital assets or accounts
• Business interests
• Life insurance proceeds

Start by creating a detailed list of your assets and liabilities. Include account numbers, property deeds and insurance policies. Include beneficiary designations for life insurance and retirement plans. Organize this information in a centralized, secure location so it's easy to update over time. A clear inventory will serve as the foundation for every decision that follows.

2. Define your goals

Next, determine the objectives that you want your inheritance to achieve. Will everything go to immediate family, or do you want to include extended relatives, friends or charitable organizations? Consider whether you'd like to make lifetime gifts to reduce your taxable estate or provide support sooner.

Timing matters too. Should younger heirs reach a certain age before receiving assets? Would you prefer to set conditions, such as completing a certain level of education or achieving other life milestones? Defining these goals now helps ensure your plan reflects your priorities.

3. Draft and execute a will and revocable trust

Once you've defined your goals, the next step is to put them into action with the right estate planning documents.

• Will: A will is the cornerstone of most estate plans. It specifies how assets should be distributed and names an executor to carry out your wishes. It can also include instructions for personal property and charitable gifts.
• Revocable trust (also known as a living trust): A revocable trust can help assets bypass the probate process, which involves a special court or designated legal officer verifying your will. This helps make distribution faster and more efficient. It also offers flexibility for managing assets during your lifetime and the ability to modify or revoke the trust.

An estate planning attorney can help you draft and execute these documents correctly. A financial advisor can work alongside your attorney to ensure your plan aligns with your overall financial goals and supports your long-term wealth transfer strategies.

In addition to these documents, consider how life insurance fits into your overall strategy. The death benefit can provide liquidity for expenses, taxes or debt repayment. Beneficiary designations on life insurance override instructions in your will, so it's important to keep them updated. The same applies to retirement plans — choosing both a primary and contingent beneficiary is essential, and your selections should align with your estate plan.

4. Select executors and trustees

An executor is the individual appointed in your will to manage your assets and property after your death. This role includes settling debts and overseeing the distribution of your estate in accordance with your wishes. A trustee oversees assets placed in a trust and manages them according to your instructions in your estate planning documents.

You should carefully select individuals who are trustworthy, organized and capable of handling important financial matters. If you prefer, you can appoint a professional, such as an attorney or trust company, to reduce the burden on family members.

It's also wise to name alternates in case your first choice is unable or unwilling to serve. Discuss these responsibilities with your chosen representatives so they understand what will be expected of them.

5. Consider tax implications

Estate and gift taxes can impact inheritances. The federal estate tax is a tax on the transfer of a person's estate at death. In 2026, the federal estate tax exemption is $15 million per individual, or $30 million for married couples who combine exemptions. Amounts above these limits may be subject to federal estate tax.³

There is also a federal gift tax that applies to transfers of assets or property during your lifetime. The annual gift tax exclusion allows you to give up to $19,000 each year (per person, per donee) without typically needing to report it on a gift tax return. Amounts over that limit must be reported to the IRS and the excess is subtracted from the $15 million lifetime exemption.

State-level taxes can also apply. In addition to Washington, D.C., there are 16 states that impose estate or inheritance taxes, often with much lower exemptions. For example, Oregon's estate tax exemption is $1 million and any amounts above that limit are subject to a 10%–16% tax.⁴

Strategies such as lifetime gifting or establishing trusts may help minimize taxes and protect assets. You may also want to explore charitable giving strategies, which can reduce taxable estate value while supporting causes you care about.

6. Communicate with family and beneficiaries

Sharing your intentions with loved ones and other beneficiaries can prevent misunderstandings and reduce the likelihood of disputes. You don't need to disclose every detail, but explaining your reasoning behind decisions can provide clarity and a sense of comfort.

This conversation is also an opportunity to express your values and the legacy you hope to leave behind. If direct conversations feel difficult, consider writing a letter of intent to accompany your estate documents.

7. Make regular plan updates

Plan to review your estate planning documents and beneficiaries on accounts at regular intervals, such as during year-end financial planning meetings.

Whenever you have a major life event, such as moving, marriage, divorce, or the birth of children or grandchildren, you'll want to review your plan. However, even in the absence of life changes, updates may be necessary if estate or inheritance tax laws change, such as the passage of the One Big Beautiful Bill Act in July 2025.

Start planning your inheritance strategy

It's important to remember that planning your inheritance is just one piece of a basic estate plan. Other aspects to consider include assigning an agent for power of attorney and creating health care proxies and a living will. A well-rounded approach looks at estate planning holistically so that it best addresses your long-term financial goals.

A Citizens Wealth Advisor* can help you organize your assets, evaluate options and ensure your inheritance plan aligns with your broader financial objectives. Together, you can build a personalized financial plan that helps protect your wealth and support the legacy goals that matter most to you.