6 minute read

Estate Planning for Employer-Provided Benefits - What You Need to Know

If you've recently changed jobs or received new employer-provided benefits, you'll need to update your estate plan. Here's what you need to know.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

Have you recently changed jobs? Have you recently elected or changed your employer-provided benefits? Alternatively, did you set up your own company and set up your own benefits? If you answered “yes” to any of these questions, then now is the perfect time to review and update your estate plan. 

For those who are gainfully employed, some are lucky enough to earn employer benefits alongside a salary or hourly pay. Because these benefits are often assigned automatically, it’s easy to “set it and forget it” and not give them much further thought. In reality, receiving new or updated employer benefits should always lead to an additional action step: reviewing and updating your Estate Plan. This guide will provide an overview of employer-provided benefits and how they should always be handled as a part of your Estate Plan.

What are employer-provided benefits?

Employer-provided benefits, or employer benefits, are all of the benefits that your employer provides in addition to your hourly wage or salary. We’ll go over several different examples of employer benefits momentarily, but they can include things such as paid time off and medical insurance. 

Essentially, you can think of employer benefits as any non-wage perks that are meant to support your physical, mental, and emotional wellbeing. They may also support other aspects of your career, such as professional development or employee engagement. 

The array of benefits provided often varies based on the type of employer, and whether or not they are a private or public entity. However, any employee will have a general baseline of benefits that are mandated by federal and state law. Optional benefits may be leveraged by a company to support recruitment and retention. Further, note that an employee may be required to pay a partial contribution or premium to receive a benefit, although typically heavily subsidized by their employer. 

What is the purpose of employer provided benefits?

The purpose of some employer benefits are to ensure the basic health and protection of all workers in the U.S., as mandated by federal and state laws. Minimum wage and unemployment benefits are two examples. These are intended to support workers such that they have a livable wage and have access to benefits should they get laid off, disabled, or pregnant.

Then, we move into a larger category of employer benefits that are intended to support the personal and financial well being of employees, both inside and outside of work. Health insurance, retirement planning, and life insurance are all examples of employer-provided benefits that fit into this category. Typically, employees are required to pay a premium for each of these benefits. However, they are heavily subsidized via employer contributions and are significantly affordable relative to purchasing these plans in the open market. They are also typically provided with a range of plan premiums to choose from to help fit their personal budget. 

Finally, we move into a myriad of non-essential perks. Free gym membership? Bring your pet to work? Holiday bonus? Monthly on-site massages? Fantastic! Employers are not required by law to offer non-essential perks, but they may do so to create an enjoyable work environment. They will also do so to help recruit and retain bright talent. Studies show that employees who feel supported are more likely to be productive, stay engaged, and remain with the same employer long-term. Harvard Business Review reports that 60 percent of workers heavily consider benefits and perks before accepting a job offer.

What are the different types of employer benefits?

So far, we’ve hinted at a few different types of employer benefits. To give you a better idea of what employer benefits are and how they work, here we provide an explanation of several common types of employer-provided benefits. 

Here’s an overview of the benefits that we’ll expand upon below:

  • Medical insurance

  • Dental and vision insurance

  • Life insurance

  • Disability insurance

  • Retirement plan

  • Pension

  • Estate Plan coordination

Medical insurance

Most employers offer health insurance to employees that cover at least primary care visits, specialist visits, emergencies, and hospitalization. Companies that employ 50 employees or more are required by law to provide medical coverage to employees that work at least 30 hours per week. Otherwise, they are subject to heavy fines. Obamacare, or the Patient Protection and Affordable Care Act, sets standards on basic services and coverage. Employers may offer Health Savings Accounts (HSAs) and Flexible Savings Accounts (FSAs) to employees as a tax-advantaged method of saving up for medical expenses as well. 

Dental & vision insurance

Employers will also typically offer dental and vision insurances alongside medical insurance. However, these are up to the discretion of the employer. These insurance plans cover dental and vision exams and coverage for any dental work, eyeglasses, contact lenses, and essential surgeries. 

Life insurance

If you’ve ever tried purchasing your own life insurance policy, you’ll know that it can be very costly. Employers are typically able to secure group policies so that they can extend affordable options to employees. Life insurance extends a death benefit that is equivalent to your annual salary. In some cases, the benefit may be equal to two to three times your salary! 

Another benefit of securing a life insurance policy through your employer is that they are typically guaranteed. This means that your age and medical history will not be used against you and you will be able to secure a policy. The plan that you select should be based on your financial circumstances, the financial circumstances of loved ones who depend on you, and the amount of debt that you may have. It’s highly recommended that you consult with a financial planning professional to select the appropriate plan.

Disability insurance

What if you suddenly became sick, injured, or became pregnant and were unable to work? There are certain labor laws that will help protect your job while you are on leave. However, they don’t address the financial strain that can come about due to your inability to work for short or long periods of time. 

Disability insurance serves as your financial safety net in these scenarios. You can elect to pay into short-term and/or long-term disability insurance, which will help cover illness or injuries of varying severity and recovery timelines. Disability insurance also helps provide a portion of your income if you were to elect to take maternity leave. 

Retirement planning & saving

If your employer offers a retirement savings program, take advantage of it! In most cases, the employer will cover the cost associated with opening and managing your retirement savings and investment account through a service provider. 

Even better, many employers will match any contributions you make from each paycheck toward retirement. There are seldom scenarios in which we can get free money, and this is one of the rare few. You will have peace of mind knowing that you are contributing to a nest egg that will help support a comfortable life in retirement.  However, be careful to find out if your employer stipulates a vesting period. This means that you will not be able to claim your employer’s portion of any retirement contributions if you were to leave the company before you are vested, or a minimum number of years with the same employer. 

Your employer’s retirement benefit will also often include complimentary retirement planning services. Be sure to take advantage and consult with an advisor provided by your employer’s retirement savings service provider. 


Pensions used to be the gold standard in terms of employer benefits, but unfortunately, they are offered less frequently. A pension is a retirement benefit that is extended to employees who have maintained employment for an extended period of time. Upon retirement, they are guaranteed a set income stream for a set number of years, or for the rest of their lives. 

This was more common in the era of career employees who tended to stay in the same workplace throughout the majority of their careers. Now, the workforce is a lot more mobile and pensions are becoming increasingly rare. 

Estate plan coordination

Estate planning benefits have become increasingly popular in recent years. This is because companies are picking up on the concept that it’s valuable to support employees in their end-of-life planning. Further, holistic benefit packages are in high demand from employers looking to attract and retain top talent.

By offering estate planning coordination services as a part of an employee benefit package, employees may feel supported in tackling what is often perceived as a challenging process. Further, it says a lot about a company’s ethos if they are supporting employees with aspects of their lives that would likely take place outside and after their time with their company.

Employer-provided benefits & estate planning

Now, you may be wondering, “what is the connection between employer benefits and estate planning?” This is a great question, and employers often miss the opportunity to bridge this gap for employees. (Thus why some more forward-thinking companies are beginning to offer estate planning services as a part of their benefits packages.)

An individual would be smart to incorporate and account for most of their employer benefits in their Estate Plan. This is because many employer benefits affect the value and transfer method of an individual’s estate. This is especially apparent if that individual were to pass away. 

For instance, let’s think about your retirement plan and life insurance plan. These plans both offer financial payouts in the case the policyholder were to pass away. Therefore, it is pertinent to account for these policies in your Estate Plan. It is also vital that you make sure to develop a practice of naming a beneficiary designation for each of the policies when available, and reviewing these designations regularly. 

By naming a beneficiary designation through each policy, it ensures that the balance or financial reward for that policy is passed directly to your beneficiary outside of the probate. Probate can take several months to several years; naturally, an individual would put in their best effort to protect their loved ones as much as possible so that they do not have to endure this process.

Trust & Will now offers probate help. Learn more about our different plan option, today.

You may even consider setting up a Revocable Living Trust and naming that Trust as the designated beneficiary to some of your employee benefit policies. That way, you can retain control and ensure that the terms of the Trust will decide how, when, and to whom any payouts are distributed to loved ones.

We recommend that you review your beneficiary designations and update your Estate Plan any time you change jobs, and any time you make changes regarding your employee benefit elections. 

Create your estate plan today

Were you surprised to find out how much your employer benefits can impact your Estate Plan? If you were, don’t worry. Employers seldom bridge this gap for employees, although the culture around this is shifting.

The estate planning industry is on the rise, and more individuals are just now learning how valuable and accessible estate planning can be. It’s a practice that empowers you to protect your own assets and property such that their benefit to loved ones is maximized down the line. Employers are beginning to realize this as well, and adding estate planning coordination to benefit packages is increasingly popular. 

Technology advancements have also made estate planning more accessible and affordable. Younger individuals are beginning to take advantage of this in record rates. If you feel inspired to update your estate plan today to include your employer-provided benefits, we can help you! Trust & Will is an online platform that makes it easy for you to set up and update your Will and/or Trust in a matter of minutes. Get started today.

Is there a question here we didn’t answer? Reach out to us today or chat with a live member support representative!


Subscribe to our newsletter for expert estate planning tips, trends and industry news.

    • Trust Pilot
    • Pledge 1%
    • Certified B Corporation
    • Better Business Bureau Accredited