The Letter in the Desk Drawer

When Margaret’s father passed away at 83, she thought the hardest part would be saying goodbye. And for a time, it was. The funeral was intimate, tasteful, just as he would have wanted. A retired high school principal with a fondness for jazz and crossword puzzles, he had always been meticulous with everything: how he folded his shirts, labeled photo albums, paid his taxes.

So when the dust settled and Margaret began sorting through his affairs, she expected the same level of order. But inside his study, beneath a stack of insurance statements, old baseball cards, and yellowing receipts, was only a single envelope labeled: “For Maggie, when the time comes.”

Inside it was a handwritten letter, poignant and thoughtful, but no legal guidance. No will. No healthcare directive. No power of attorney. Just a few heartfelt pages and a bank statement.

What followed was a year of probate court, complicated family conversations, and legal fees, all of which could have been avoided with proper estate planning.

Margaret later told us, “I thought he had everything taken care of. I didn’t even know what to look for.”

Stories like Margaret’s are exactly why we talk so often about estate planning, not just for the ultra-wealthy, but for anyone who wants their wishes known, their loved ones protected, and their legacy preserved. At its heart, a good estate plan begins with five essential legal documents: a will, a living trust (if applicable), a durable power of attorney, a healthcare proxy, and documents or deeds for real estate. 

Your last will and testament is the foundational piece. It names who receives your property, who becomes the guardian of any minor children, and who is responsible for carrying out your wishes (the executor). Without it, the state makes the decision for you.

For more complex or larger estates, a living trust provides a layer of efficiency. It lets your assets avoid probate entirely, ensuring a faster and more private distribution. It’s particularly helpful for those with property in multiple states or a desire to provide for children in staggered distributions over time.

Next is your durable power of attorney, which allows someone you trust to manage your financial affairs if you're incapacitated. Without this, your family could be forced to petition the court just to pay your bills or access your bank account.

Your healthcare proxy names who should make medical decisions for you if you’re unable to do so. It's the voice at the hospital bed when you can't speak.

And finally, the living will, your instructions for end-of-life care. It answers hard questions so your loved ones aren’t left guessing in a moment of crisis. Do you want to be on a ventilator? What if recovery is unlikely? These aren’t easy decisions, but making them in advance can spare your family tremendous emotional strain.

These documents don’t just distribute assets, they distribute peace of mind.

Beyond the personal implications, estate planning also comes with tax considerations that are often misunderstood. A frequent question we hear from clients is: What’s the difference between an estate tax and an inheritance tax?

The estate tax is levied on the estate itself, before the assets are distributed. This means the executor of the estate is responsible for paying it out of the estate’s total value. The inheritance tax, on the other hand, is charged to the individual beneficiaries after they’ve received their inheritance.

Only a few states levy an inheritance tax: beneficiaries in Michigan do not pay state taxes on assets received, though federal estate taxes may apply to very large estates ($13.99 million+ exemption as of 2025. States that do impose inheritance tax, each has different rules about who is taxed and at what rate; often, immediate family, like spouses or children, are exempt or taxed at lower rates, while more distant heirs face higher percentages.

As for estate taxes, twelve states plus the District of Columbia currently impose one. Notably, Massachusetts and Oregon have the lowest exemption thresholds, meaning even moderate estates may be subject to taxation. Connecticut, Illinois, Minnesota, New York, Rhode Island, Vermont, Washington, Hawaii, Maine, and Maryland round out the list.

So, which is “better”? That depends. In general, estate taxes affect fewer people but can have a bigger bite, especially if your estate exceeds state or federal exemption thresholds. Inheritance taxes, though potentially burdensome for beneficiaries, are often limited to non-immediate family members.

The good news is that, with thoughtful planning, most of these taxes can be mitigated or avoided entirely. Trusts, charitable giving, and lifetime gifting strategies all play a role, and the state you reside in. But none of those tools work without first having the basics in place.

Margaret’s story isn’t unusual. It’s common. Too many families are left scrambling, not because a loved one lacked good intentions, but because they never translated those intentions into legal protection.

As a financial advisory firm, we see estate planning not as a legal formality but as a gift, one of the most generous things you can leave behind. It tells your family: “I’ve thought this through. I’ve taken care of you. Now focus on what matters.”

If you haven’t started your estate plan, or it’s been more than five years since you updated it, now is the time. Let us guide you through the process. Call us at 248.942.4842.