Estate planning isn't about being rich or old. It's about controlling what happens to your stuff and your dependents if something happens to you.
Why It Matters
Without estate planning:
- Courts decide who gets your assets
- Family may fight over your things
- Guardianship of kids is uncertain
- Your wishes aren't known (medical, end-of-life)
- More goes to taxes and fees
The Essential Documents
1. Will
Says who gets what after you die.
Must include:
- Who inherits your assets
- Who's the executor (manages the process)
- Guardian for minor children
Watch Out
If you have kids, name a guardian NOW. The court will decide otherwise.
2. Beneficiary Designations
These OVERRIDE your will for:
- Retirement accounts (401k, )
- Bank accounts with POD/TOD
- Brokerage accounts
Pro Tip
Check your beneficiaries annually. Outdated beneficiaries (ex-spouse, deceased relative) are a common and expensive mistake.
3. Power of Attorney (POA)
Lets someone make financial decisions if you're incapacitated.
Two types:
- Limited: Specific actions only
- General/Durable: Broad authority, survives incapacity
4. Healthcare Proxy / Medical POA
Lets someone make medical decisions if you can't.
5. Living Will / Advance Directive
Documents YOUR wishes for end-of-life care.
When You Need a Trust
Trusts can:
- Avoid probate (public, slow, expensive)
- Provide for minor children over time
- Protect assets from creditors
- Reduce estate taxes (for large estates)
Revocable Living Trust:
- You control it while alive
- Assets transfer immediately at death
- Avoids probate
- No tax benefits
Irrevocable Trust:
- You give up control
- Can protect assets and reduce taxes
- More complex
For most people under $5M , a will + proper beneficiaries is sufficient.
The Estate Tax Reality
2024 Federal Estate Tax Exemption: $13.61 million per person
If your estate is under this, you owe no federal estate tax.
Some states have lower thresholds (check yours).
Pro Tip
For most people, estate taxes are not a concern. Focus on the basics: will, POA, beneficiaries.
The Action Checklist
Do This
Do now:
- Check ALL beneficiary designations
- Create or update your will
- Name a power of attorney
- Complete a healthcare proxy
- Document your wishes (living will)
- Tell someone where documents are stored
Review when:
- Marriage/divorce
- Birth of children
- Death of beneficiary
- Major asset changes
- Move to new state
DIY vs. Lawyer
| Situation | DIY Options | Lawyer Recommended |
|---|---|---|
| Simple will, no kids | LegalZoom, Trust & Will | Probably fine DIY |
| Have kids | Maybe DIY | Recommended |
| Blended family | No | Strongly recommended |
| Business owner | No | Required |
| High net worth ($5M+) | No | Required |
A basic estate plan from a lawyer costs $1,000-3,000. Complex ones cost more.
Common Mistakes
Avoid This
- No estate plan at all
- Outdated beneficiaries
- Keeping documents secret
- One-and-done (never updating)
- DIY for complex situations
- Forgetting digital assets (passwords, crypto)
Quick Win
Today: Check beneficiaries on ONE account (401k, IRA, or life insurance). Is the right person listed? This takes 5 minutes and prevents huge problems.