Estate Planning Before Retirement: 7 Things to Review Before You Retire

Retirement planning usually starts with financial questions.

Do I have enough to retire? When should I claim Social Security? How should I invest my portfolio? What will I pay in taxes? Should I pay off my mortgage?

Those are important questions. But as retirement gets closer, there’s another part of your financial life worth reviewing: your estate plan.

And estate planning isn’t only about deciding what happens to your money after you die.

A good estate plan also addresses what happens if you become unable to manage your finances or make healthcare decisions for yourself. It identifies who should step in, how your assets should pass, and whether your beneficiary designations, account ownership, insurance, and legal documents actually work together.

Retirement is a particularly good time to review these decisions because so much else is changing at the same time. You may be rolling over a 401(k), starting a pension, changing insurance coverage, paying off or selling a home, consolidating accounts, or beginning to think more seriously about helping children and grandchildren.

If you’re getting close to retirement, here are seven estate planning items worth reviewing.

Important: Financial planners and tax professionals can help identify planning issues and coordinate the financial pieces, but wills, trusts, powers of attorney, and other legal documents should be prepared and reviewed with a qualified estate planning attorney.

1. Make Sure Your Core Estate Planning Documents Are Current

Start with the basics.

Depending on your circumstances and the laws in your state, your estate plan may include documents such as:

• A will

• A durable financial power of attorney

• A healthcare power of attorney

• A living will or advance healthcare directive

• HIPAA authorizations

• Potentially a revocable living trust or other trusts

A will receives most of the attention, but some of the other documents may become important long before anyone needs your will.

For example, a durable financial power of attorney generally allows someone you’ve selected to handle financial matters on your behalf under the circumstances specified in the document. A healthcare power of attorney identifies someone to make medical decisions when you cannot. A living will or advance directive can document your wishes concerning certain medical care.

That makes incapacity planning an important part of estate planning.

If your documents were prepared 15 or 20 years ago when your children were young, your assets were substantially smaller, you lived in a different state, and retirement seemed far away, don’t assume they’re still appropriate today.

Retirement is a natural checkpoint for another review.

2. Ask Whether the People You’ve Named Are Still the Right People

Having the right documents isn’t enough. You also need the right people named in them.

Look at the individuals you’ve selected as your:

• Personal representative or executor

• Trustee or successor trustee

• Financial agent under your power of attorney

• Healthcare agent

• Guardians, if you still have minor children

• Successors or backups for these roles

Then ask a deceptively simple question:

Would I still choose these people today?

Relationships change. People move. Parents and siblings get older. Children grow into adults who may now be perfectly capable of filling roles they couldn’t have handled when the documents were originally written.

There’s also a difference between someone you love and someone who is well suited to administer your financial affairs.

Your executor may need to work with attorneys and accountants, track down assets, file tax returns, communicate with beneficiaries, and manage administrative details for months. Your financial agent may someday need to manage investments, pay bills, or make decisions involving your home.

Those jobs require judgment, availability, and organization.

Choose accordingly.

3. Review Every Beneficiary Designation — Not Just Your Will

This is one of the most important financial planning pieces of an estate plan.

Many assets don’t necessarily pass according to your will.

Retirement accounts, for example, generally pass according to the beneficiary designation maintained under the account or plan. The IRS specifically notes that retirement benefits are generally paid to the beneficiary designated under the plan’s procedures.  

That means you should review beneficiary designations on accounts such as:

• IRAs

• 401(k)s and other employer retirement plans

• Roth IRAs

• Life insurance

• Annuities

• HSAs

• Other accounts with transfer-on-death or payable-on-death instructions

Don’t stop with the primary beneficiary, either. Review the contingent beneficiaries and what happens if one of your intended beneficiaries dies before you.

This becomes particularly important around retirement because you may be consolidating old accounts or rolling a workplace retirement plan into an IRA.

And beneficiary decisions can have significant tax consequences.

Under current federal rules, the distribution options for inherited retirement accounts depend in part on who inherits the account. Spouses generally have more options than many non-spouse beneficiaries, while many non-spouse beneficiaries are subject to a 10-year distribution rule.  

In other words, who inherits which account can matter almost as much as how much they inherit.

This is one reason estate planning, investment planning, and tax planning shouldn’t operate in separate silos.

4. Understand How Your Assets Would Actually Transfer

Once you’ve reviewed your documents and beneficiaries, zoom out and look at your entire balance sheet.

For each significant asset, ask:

If I died tomorrow, where would this asset actually go?

Consider your:

• Home and other real estate

• Bank accounts

• Brokerage accounts

• Retirement accounts

• Business interests

• Life insurance

• Vehicles and personal property

The answer may depend on beneficiary designations, account titling, joint ownership, trusts, or ultimately your will and the probate process.

Colorado, like other states, has a probate process for administering certain assets after death.   But whether a particular asset goes through probate depends on how it is owned and whether another valid transfer mechanism applies.

This is where seemingly small administrative details can have outsized consequences.

You might have a beautifully drafted estate plan while an old beneficiary form, incorrectly titled account, or newly acquired asset produces an outcome you didn’t intend.

The objective isn’t necessarily to avoid probate at all costs or put everything into a trust.

It’s to understand what will happen and make sure that result is intentional.

Your house deserves particular attention

For many retirees, the home is one of their largest assets.

If you’re also deciding whether to remain in your home, pay off the mortgage, downsize, or move closer to family, the estate-planning implications should be part of that discussion.

I’ve written separately about whether you should pay off your mortgage before retiring in Colorado⁠. The bigger point is that housing, cash flow, taxes, and estate planning are interconnected retirement decisions rather than four separate planning exercises.

5. Decide How — and When — You Want to Help Children or Grandchildren

Estate planning doesn’t have to mean waiting until death to help the people you care about.

For some retirees, the more interesting question is:

How much can I comfortably give away while I’m still here to see it make a difference?

That could mean helping with:

• College

• A first home

• A wedding

• Starting a business

• Travel or family experiences

• Medical expenses

• A grandchild’s long-term savings

There are several ways to accomplish those goals, and the tax treatment can differ substantially.

For example, under current federal tax rules, the annual gift-tax exclusion is $19,000 per recipient in 2026. The IRS also provides separate exclusions for qualifying tuition and medical expenses paid on another person’s behalf.  

The tax rules aren’t the only consideration, though.

A gift that is perfectly permissible under the tax code can still be a bad financial-planning decision if it jeopardizes your own retirement.

That’s why I generally prefer starting with the retirement plan:

What can you afford to give without compromising the lifestyle and financial security you’ve spent decades building?

Once you know that, you can decide which giving strategy makes sense.

I’ve explored this more directly in Helping Grandchildren Financially Without Hurting Your Retirement.

And for younger grandchildren, two newer options worth understanding are Trump Accounts⁠ and traditional 529 college savings plans. I compared those directly in Trump Account vs. 529 Plan: Which Is Better for Your Child or Grandchild?⁠

The right answer isn’t necessarily choosing one account. It’s first deciding what you’re trying to accomplish.

6. Plan for Incapacity as Carefully as You Plan for Death

This may be the most overlooked part of estate planning.

A traditional estate-planning conversation often starts with:

What happens when I die?

A retirement-planning conversation should also ask:

What happens if I’m alive but can’t make decisions for myself?

Who pays the bills?

Who manages your investment accounts?

Who communicates with your financial advisor, CPA, insurance companies, and banks?

Who can make healthcare decisions?

Who knows what you would want?

Without appropriate documents, incapacity can leave a family facing a court process to establish authority to act on someone’s behalf. Requirements and terminology vary by state, which is another reason these documents should be prepared with an estate-planning attorney. 

This issue can become even more important in retirement because financial lives don’t necessarily become simpler the day work stops.

You may have Social Security, pensions, IRAs, brokerage accounts, real estate, insurance, Medicare, tax payments, charitable giving, and other ongoing financial responsibilities.

Someone needs the legal authority — and enough information — to step in if necessary.

Long-term care planning belongs in this conversation as well. If you’re thinking about how incapacity or declining health could affect your retirement, you may also find What If I Never Use Long-Term Care Insurance?⁠ helpful.

7. Make Sure Someone Knows Where Everything Is

The final step is simple, but it’s one families often overlook: make sure someone knows where everything is.

Someone you trust should know how to find the information they’ll need.

That doesn’t mean handing your children every password and account statement today. It means creating an organized roadmap so your family isn’t forced to conduct a financial scavenger hunt during an already difficult time.

Consider maintaining a secure record of:

• Estate planning documents and attorney contact information

• Financial advisor and CPA contact information

• Bank and investment accounts

• Retirement plans

• Insurance policies

• Real estate

• Business interests

• Important recurring bills

• Digital assets

• Password-management instructions

• Safe deposit boxes or secure storage

• Funeral or end-of-life preferences, if applicable

You should also decide who needs to know what.

Your adult children may not need your complete net worth today. But the person you’ve named as financial power of attorney should probably know that they’ve been named and how to locate the documents if they’re ever needed.

An estate plan that nobody can find isn’t especially useful.

If creating your own system feels overwhelming, there are tools designed specifically for this. A client recently introduced me to Nokbox, a Colorado-based company that provides an organizational system for important documents, financial accounts, insurance information, digital assets, keys, household information, and instructions for your next of kin. I haven’t personally used every feature, but I like the basic idea: your estate plan shouldn’t leave your family with a scavenger hunt.

Estate Planning Is Part of Retirement Planning

None of these decisions exists in isolation.

Your beneficiary choices affect how retirement accounts may eventually be taxed.

Your housing decisions affect your estate and cash flow.

Your gifting decisions affect both your legacy and your ability to support your own retirement.

Your insurance can affect how much risk your portfolio and family ultimately bear.

And your powers of attorney determine who can manage much of this if you no longer can.

That’s why I view estate planning as part of the larger retirement-planning process — even though the legal documents themselves belong in the hands of an estate planning attorney.

If you’re still several years away from retirement, my article on What Should You Do 5 Years Before Retirement? provides a broader checklist of the financial decisions worth addressing during this window.

For Colorado retirees and near-retirees, the objective is ultimately to get your investments, taxes, retirement income, insurance, beneficiary designations, and estate plan pointing in the same direction.

Winding Trail Financial Planning is a fee-only financial planning firm in Lafayette, Colorado. I help retirees and people approaching retirement coordinate these decisions as part of a comprehensive financial plan.

If you’re approaching retirement and would like help putting the pieces together, you can Start Here⁠ to learn more about working together.

Thanks for reading!

-Dwight Dettloff, CFP®, CPA/PFS, RICP®

Estate Planning Before Retirement: Frequently Asked Questions

When should I review my estate plan before retirement?

Retirement is a good trigger for a comprehensive estate-plan review, particularly if your documents haven’t been reviewed in several years. You should also consider another review after major life changes such as a marriage, divorce, death, move to another state, significant change in assets, or changes involving your children or intended beneficiaries.

What estate planning documents should I have before retirement?

Common documents include a will, durable financial power of attorney, healthcare power of attorney, living will or advance healthcare directive, and appropriate medical-information authorizations. Some families may also benefit from a revocable living trust or other trust planning. The appropriate documents depend on your circumstances and state law and should be determined with an estate planning attorney.

Does my will control who receives my IRA or 401(k)?

Not necessarily. Retirement plans generally distribute assets according to the beneficiary designation maintained under the plan rather than simply following the instructions in your will. That’s why reviewing beneficiary designations is an important part of an estate-planning review.  

Should I name a trust as the beneficiary of my IRA?

Sometimes, but it shouldn’t be done automatically. Trust beneficiaries of retirement accounts are subject to specialized tax and distribution rules. Whether a trust makes sense depends on your estate-planning objectives, intended beneficiaries, and the terms of the trust. Coordinate the decision among your estate-planning attorney, financial planner, and tax professional.

Should I give money to my children or grandchildren before I die?

Lifetime giving can make sense if it supports your goals without threatening your own retirement security. Options might include outright gifts, 529 contributions, other investment accounts, or direct payment of qualifying tuition or medical expenses. The best strategy depends on the purpose of the gift, the recipient, your finances, and applicable tax rules.

Do I need a trust to avoid probate in Colorado?

Not necessarily. Whether an asset is subject to probate depends partly on how the asset is owned and whether it passes through another mechanism, such as a beneficiary designation or certain forms of ownership. A Colorado estate-planning attorney can determine whether a trust or another strategy is appropriate for your situation.