Estate Planning Essentials for University Faculty: Where to Begin

Estate planning is often the part of financial planning where many faculty members have a general sense of what they want but tend to postpone formalizing those plans. After building significant assets over the course of a long academic career, and with estate goals that naturally evolve over time, documenting your wishes is crucial to help ensure your financial legacy is protected and your loved ones are provided for.

We recently hosted a webinar covering the 10 Planning Opportunities Faculty Commonly Miss, and one of the key takeaways was the importance of properly coordinating your estate plan. It’s a nuanced topic, so let’s distill some of those ideas into a few practical, actionable steps. Whether you’ve already worked with an estate planning attorney or are just starting to think about this chapter of your financial journey, here are some important opportunities to consider — and common mistakes to avoid.

1. Coordinate Your Beneficiary Designations

A frequently overlooked but essential first step in estate planning is reviewing the beneficiary designations on your retirement accounts, insurance policies, and other financial assets. Many university faculty members accumulate multiple retirement plans over their careers, including 403(b)s, 457(b)s, and personal brokerage accounts. Over time, it’s surprisingly easy to lose track of which accounts have which designations or to let them become outdated. In some cases, a retirement plan vendor change can even result in beneficiary information not transferring properly.

One common misconception we often hear is that creating a will or trust means your estate plan is complete. Unfortunately, that’s not the case. Beneficiary designations take precedence over what’s written in your will or trust. If your accounts name an outdated beneficiary or don’t have a contingent listed, those assets could end up in probate, leading to potential delays, unnecessary costs, or distributions to unintended individuals.

That’s why it’s crucial to regularly review and update your primary and contingent beneficiary designations. This step is especially important for university faculty, who frequently change institutions and often accumulate multiple retirement plans across different providers over the course of their careers.

2. Avoid the “Stale Plan” Trap

Another common misstep is assuming your estate plan is a one-and-done task, especially if it was created decades ago. Many faculty members establish these documents early in life, often after marriage or the birth of a child. While those plans may have been appropriate at the time, it is likely that the individuals you originally named as trustee, executor, or power of attorney may no longer be the best choices today. It’s not unusual for us to see elderly parents or aging siblings listed in these important roles.

As a general guideline, we recommend reviewing your estate planning documents at least every five years, or anytime there is a significant life event, such as a marriage, divorce, birth of a child, or a major change in financial circumstances. It’s also common for faculty members’ priorities to evolve over time. Charitable interests may grow, grandchildren may become part of the picture, and wealth may increase beyond what was originally expected, prompting the need for additional protections.

When working with new families, one of our first steps is to perform a gap analysis — a thorough review of what is currently in place and how well it aligns with your present wishes and financial situation. This can be an invaluable exercise for identifying and updating outdated provisions before they become a problem.

3. Don’t Forget to “Fund” Your Trust

If you’ve recently taken the important step of drafting estate planning documents, that’s a great start! However, we often find that when a professor or faculty member creates a trust, they mistakenly believe the work is done. One crucial, and commonly overlooked, step is funding the trust. This means retitling financial accounts, real estate, and other applicable assets into the name of the trust and ensuring this is properly coordinated with your beneficiary designations.

Unfortunately, we’ve seen many situations where someone invests the time and resources to establish a solid estate plan, only to leave key accounts, like retirement plans or investment accounts, unchanged. This disconnect can unravel even the best-designed plan, sending assets through probate or causing confusion and delays for heirs.

To avoid this, it’s essential that your financial advisor and estate planning attorney maintain regular communication, thereby making sure that your accounts are aligned with your estate documents. Often, it’s that final 10% of effort that determines whether your plan functions as intended.

At Savant, we believe one of the most valuable services we offer is helping clients integrate their estate plan with their broader financial picture. Our in-house wealth transfer team collaborates directly with our wealth advisors to help ensure everything is properly coordinated, so your plan works as intended.

4. Align Charitable Giving with Your Estate Plan

Many faculty members have charitable causes that hold special meaning for them — whether it’s the university where they built their career, their alma mater, a faith community, or a favorite nonprofit. Charitable giving offers a valuable opportunity, and with careful planning, you can help ensure these charitable intentions continue beyond your lifetime in a way that’s meaningful and tax efficient.

As a general strategy, pre-tax retirement accounts (like 403(b)s, 401(k)s, or IRAs) are often among the most tax-efficient assets to leave to charitable organizations. Because charities are tax-exempt, they can receive the full value of these accounts without paying income tax, making the impact of your gift significantly greater.

Incorporating charitable giving into your estate plan isn’t just about generosity; it’s also about maximizing the legacy you leave behind in the most effective way possible.

5. Understand the Tax Landscape: Federal, State, and Income Tax Considerations

Federal Estate Tax and Faculty

The good news for most university faculty is that federal estate taxes are likely not an issue. As of 2025, the federal estate tax exemption is $13.99 million per individual and $27.98 million for married couples. Unless your estate exceeds those amounts, it isn’t likely federal estate tax is something you need to worry about.

That said, it’s important to monitor future changes. These historically high exemption levels are scheduled to sunset in 2026, potentially reducing the exemption by about half unless Congress takes further action. For faculty members with significant wealth, particularly those holding appreciated property, real estate, or concentrated assets, it may be wise to start planning now for a potentially lower exemption in the years ahead.

State Estate Taxes Are a Different Story

Even if federal estate taxes aren’t a concern for you, it’s important to remember that your state may have its own estate or inheritance tax rules. Several states impose these taxes with exemption amounts far lower than the federal level, which means faculty members with moderate to significant assets could be impacted without proper planning.

That’s why it’s essential to work with a financial advisor or estate planning professional who understands the specific tax laws in your state and can help you navigate them effectively. A thoughtful, localized strategy can help minimize unnecessary tax exposure and preserve more of your estate for the people and causes you care about.

Income Taxes Matter More for Most Faculty

While estate and inheritance taxes often get the spotlight, income taxes are one of the most overlooked issues in estate planning, especially for university faculty. A significant portion of faculty wealth is typically held in pre-tax retirement accounts, such as 403(b)s and 401(k)s, where contributions and growth have been tax-deferred over the years thanks to both personal savings and university matches. However, those taxes eventually come due, not just for you, but also for your heirs.

Since the passage of the SECURE Act, most beneficiaries are now required to withdraw inherited retirement account balances within 10 years. This accelerated timeline can push heirs into higher tax brackets, increasing the overall tax burden on your estate’s legacy.

The good news is, with thoughtful planning, you can help mitigate this. Strategies like Roth conversions during lower-income years, charitable gifting from pre-tax accounts, lifetime gifts, and carefully considering which heirs inherit which types of assets can all help potentially reduce the income tax impact on your loved ones and preserve more of your estate’s value.

Where to Start? Know What is in Place Today

The foundation of effective estate planning is knowing your current financial situation. What documents have you created? Where are your assets held? Who are your listed beneficiaries? Taking inventory of your existing plan is the first, and often most important, step.

From there, consider partnering with a trusted financial advisor or estate planning attorney to help identify any gaps, outdated provisions, or areas that need attention. Estate planning doesn’t have to feel overwhelming — even minor, practical updates can make a meaningful difference in protecting your financial legacy and ensuring your wishes are carried out.

Final Thoughts

Estate planning for university faculty isn’t just about distributing assets — it’s about protecting the financial legacy you’ve spent a lifetime building and ensuring it’s passed on smoothly, in line with your wishes, and without placing unnecessary burdens on your loved ones.

Whether you’re just beginning to think about your estate plan or it’s time for a review, remember that this isn’t a one-time task. It’s an ongoing, evolving process. When approached thoughtfully, estate planning can offer peace of mind for you today and lasting clarity for the people and causes that matter most to you tomorrow.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment or legal advice from Savant.