How Gig Workers Can Prepare Their Estate and Financial Plans
Freelancers have to be vigilant to keep track of where their money goes, whether it’s to cover daily necessities, saving for retirement or other expenses.


Howard Sharfman
Individuals with jobs outside the typical employer setting, working freelance or temporary jobs, sometimes in addition to a full-time job, are often referred to a “gig workers.” Gig workers have the same financial needs as people with more traditional jobs. We all want to pay for our expenses, support our families and save for the future. However, gig workers often do not have the benefits provided by large employers.
The nature of gig work introduces a number of complications to a worker’s estate and insurance planning needs. But first we need to understand that “gig work” can mean two very different kinds of income.
Broadly speaking, a gig worker derives some or all of their income from temporary, sporadic or freelance work. At one end of the spectrum, we have workers who use gig work to supplement a steady form of income. At the other end, some people juggle multiple gigs at a frequency on which they might not always be able to rely in order to generate all of their income. Both kinds of workers call for distinct approaches to their financial plans. But there are a few things they have in common.

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Setting a goal for your gig income
People who take on gig work need to stick to their intended goals. It sounds self-evident to say, but if one’s gig work is meant to pay for health or life insurance, retirement contributions, tuition, a mortgage or build a legacy to pass down, then steps should be taken to ensure that the gig income is set aside or applied for its purpose. It is all too easy for gig work income to become diluted in one’s general spending, especially if it all pours into the same financial accounts used for day-to-day expenses.
To avoid this behavior, gig workers might think in terms of matching specific gigs to specific needs. A performer might earmark some of their income for retirement, or to finance insurance. Thinking in terms of, “This is for the wedding,” or “This is for the down payment,” will help gig workers keep focused on the safety nets and future goals they need to build.
What gig workers leave behind
In our experience, it is often challenging for freelancers to consider their work as part of their estates. We encourage gig workers to answer this question: Does this have ongoing commercial value? Would it allow the work to continue beyond you as an individual? If so, then it is an asset for consideration in estate planning.
Those can be physical assets, like equipment, supplies or other materials used as a matter of course in one’s gig work. But a freelancer’s assets are often intangible items: A client list or a book of business that can be assumed and used by others could certainly be considered part of an estate. Intellectual property, like copyrighted works and trademarks, may generate income beyond the creator’s lifetime. Even large social media followings or online profiles that have commercial value should be taken into consideration as part of an estate plan.
If a gig worker has developed a formally incorporated business that could outlast them, they should consider the operations and value beyond their personal work. Contracts, apprenticeships and training of new workers or successors should be thought of as part of a gig worker’s estate and succession plan.
Operating the business through an entity can help protect personal assets and facilitate a seamless transition in case of illness, retirement or death. It also serves as a shield against potential liabilities, a consideration that is especially vital for those engaging in activities with inherent risks. For example, someone who has built up a robust driving or ride-sharing business should not use their personal auto insurance to cover the liabilities associated with the business.
In summary, a gig worker should consider:
- Matching their new income to a need, desire or why
- Having an up-to-date estate plan including a will, property power of attorney and health care directive
- Creating an LLC or other entity for their business
- Acquire the appropriate personal and business insurance coverage needed for their business
- Start a retirement plan to defer income taxes on some income
- Invest in their own personal development to make sure they can succeed in their new business or gig
Whether gig work serves as a supplementary income source or a full-time pursuit, sound financial planning, diligent tax management and appropriate insurance coverage can pave the way for a secure financial future. Gig workers should research their options thoroughly and connect with financial professionals to understand how they can safeguard and leave behind their hard-earned income and assets.
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David A. Handler is a partner in the Trusts and Estates Practice Group of Kirkland & Ellis LLP. He concentrates his practice on trust and estate planning and administration, representing owners of closely held businesses, family offices, principals of private equity and venture capital funds, individuals and families of significant wealth, and establishing and administering private foundations and other charitable organizations.
- Howard SharfmanSenior Managing Director, NFP Insurance Solutions
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