Estate planning is how you make decisions that last.
It defines who’s responsible, how assets are managed, and what happens if you can’t make those calls yourself. Whether you’re planning ahead or adjusting to change, an estate plan gives structure to life’s what-ifs—so every detail is documented, and nothing is left uncertain.
What Is Estate Planning?
Estate planning is the process of legally documenting how you want your property, finances, healthcare, and responsibilities managed—during your life and after.
A complete plan allows you to:
Decide who receives your assets and when.
Appoint trusted individuals to act on your behalf if you’re ever unable to.
Minimize delays, legal costs, and disputes.
Provide clear direction for your loved ones.
Core Documents in an Estate Plan
Every estate plan is unique, but most include the following key documents:
Will: Outlines how your assets should be distributed and names guardians for dependents.
Trust: Holds and manages assets for your beneficiaries, often with more control and flexibility than a will.
Financial Power of Attorney (FPOA): Authorizes someone to manage financial affairs on your behalf.
Healthcare Power of Attorney (HPOA): Designates who can make medical decisions if you’re incapacitated.
Advance Healthcare Directive / Living Will: States your medical treatment preferences in advance.
HIPAA Authorization: Allows your chosen representative to access medical information and coordinate care.
Guardianship Designations: Identifies who will care for minor children or dependents.
Will vs. Estate Plan: What’s the Difference?
A Will is one component of a full estate plan. It determines who inherits your assets but doesn’t help avoid probate or manage assets during your lifetime.
An estate plan is the full picture. It combines Wills, Trusts, Powers of Attorney, healthcare directives, and other documents that work together to protect your decisions while you’re alive—and your legacy after.
Comparison Table: Will vs. Estate Plan
Feature | Will | Estate Plan |
Purpose | Directs who receives your assets after death. | Protects your assets, decisions, and beneficiaries during life and after. |
Includes | One document covering distributions and guardianship. | Multiple documents: Will, Trust, Powers of Attorney, healthcare directives, and more. |
Avoids probate | No. Assets still go through probate. | Yes. Assets held in a trust bypass probate. |
Manages assets during lifetime | No. Only applies after death. | Yes. Through trusts and powers of attorney. |
Covers healthcare decisions | No. | Yes. With Healthcare POA and advance directives. |
Updates easily | Moderate. Requires amendment or new will. | High. Flexible and designed for ongoing updates. |
Best for | Basic distribution and guardianship needs. | Comprehensive lifetime and legacy protection. |
Why Taxes Matter in Estate Planning
Effective planning protects not only assets but also their value. Depending on the size of the estate and the state of residence, taxes may apply:
Estate Taxes: Levied on large estates before assets are passed on.
Inheritance Taxes: Paid by beneficiaries in some states.
Gift Taxes: Apply to transfers of money or property above a certain amount while you're still living and when you pass away.
Thoughtful planning can minimize or eliminate these tax burdens.
Who Needs an Estate Plan?
Everyone over 18 should have at least a basic estate plan, regardless of net worth.
If you own property, have financial accounts, or care for others, an estate plan ensures decisions don’t fall to default laws or the courts.
How to Create an Estate Plan
The process is straightforward and can often be completed in stages:
List your assets. Include property, accounts, and items of value.
Choose your beneficiaries. Decide who inherits what.
Select decision-makers. Appoint individuals for financial and medical powers of attorney.
Plan for dependents. Name guardians for children or others in your care.
Select your legal structure. Choose between a Will, Trust, or both.
Complete and sign documents. Follow witnessing and notarization requirements.
Store securely. Keep originals safe and share access with trusted contacts.
Review regularly. Update your plan as life circumstances evolve.
Mistakes to Avoid
Even well-intentioned plans can fall short. Common pitfalls include:
Not creating a plan at all.
Failing to update after major life changes.
Overlooking incapacity planning.
Confusing asset ownership or titling (e.g., joint accounts or beneficiary designations).
Naming minors or unqualified individuals as direct beneficiaries.
Ignoring or not accounting for potential tax and liquidity needs.
Letting emotions guide decision-making.
Transferring or sharing property without understanding tax consequences.