Estate Planning Basics
What is an estate planning
Estate planning is the process of deciding how your property, responsibilities, personal instructions, and decision-making authority should be handled during life and after death.
A complete estate plan may address who receives assets, who manages the estate, who can act if you become incapacitated, how minor children or dependents should be cared for, how beneficiary-controlled assets should pass, and how instructions should be documented for family members, fiduciaries, attorneys, financial institutions, and medical providers.
The details vary by state, family structure, asset type, and planning goals. A simple estate plan may include only a few documents. A more comprehensive plan may include a will, revocable living trust, pour-over will, beneficiary designation review, powers of attorney, health care directives, trust schedules, asset inventories, instructions for trustees, and planning for taxes, retirement accounts, business interests, real estate, special needs, or long-term care planning.
This article explains the basic parts of estate planning in plain terms.
What counts as an estate?
Your estate generally includes the property, accounts, rights, and financial interests you own or control. This may include:
Real estate
Bank accounts
Investment accounts
Retirement accounts
Life insurance
Annuities
Business interests
Vehicles
Personal property
Digital assets
Collectibles
Debts and liabilities
Contracts or ownership rights
Property owned jointly with another person
Estate planning usually begins with inventory. Before deciding who should receive property or who should manage responsibilities, it helps to understand what exists, how each asset is owned, whether each asset has a beneficiary designation, and whether any debts or liens are attached.
Ownership is important. For example, an asset owned individually may be handled differently than an asset owned jointly. A retirement account with a beneficiary designation may pass differently than a bank account with no beneficiary.
Real estate may require special attention because title, state law, mortgage obligations, and family use can all affect planning.
A good inventory does not have to be complicated. It should identify the asset, approximate value, owner, institution, beneficiary if any, and any notes needed by the person who may later manage the asset.
What are the goals of estate planning?
Estate plans are not all designed for the same purpose. The right structure depends on what the person wants the plan to accomplish.
Common estate planning goals include:
Naming who receives property after death
Naming an executor, personal representative, trustee, or successor trustee
Providing for a spouse or partner
Providing for children, grandchildren, or other beneficiaries
Naming guardians for minor children
Reducing administrative delay where possible
Keeping certain family matters private when appropriate
Coordinating beneficiary designations
Planning for incapacity
Managing tax exposure
Protecting a beneficiary who may be young, disabled, financially inexperienced, or vulnerable
Planning for business ownership or real estate
Supporting charitable causes
Giving instructions for personal property or family items
Clarifying who should act and what authority that person should have
The strongest estate plans usually begin with specific objectives rather than document selection. “I need a will” or “I need a trust” is less precise than “I want my spouse protected, my home handled clearly, my children provided for, my accounts coordinated, and someone I trust able to act if I cannot.”
What is a will?
A will, often called a last will and testament, is a legal document that states how a person wants certain property distributed after death. It can also nominate an executor or personal representative, name guardians for minor children, and provide instructions about personal property.
A will is one of the most familiar estate planning documents because it allows a person to put final instructions in writing. It can be useful even when a trust is also used because a will can address assets not otherwise covered and can name guardians for minor children.
A will usually includes several key sections:
Identification of the person making the will
Revocation of prior wills
Appointment of an executor or personal representative
Distribution instructions
Guardian nominations for minor children, if applicable
Instructions for debts, taxes, and expenses
Signatures, witnesses, and other formalities required by state law
A will does not control every asset. Assets with beneficiary designations, joint ownership rights, transfer-on-death designations, payable-on-death registrations, or trust ownership may pass outside the will. This is why beneficiary and ownership reviews are part of estate planning.
A will also does not give another person authority to manage your affairs while you are alive. That role is usually addressed through separate incapacity documents.
What is a trust?
A trust is a legal arrangement involving a grantor, a trustee, and one or more beneficiaries. The grantor creates the trust. The trustee manages trust assets according to the trust terms. The beneficiaries receive the benefit of the trust as described in the trust document.
A revocable living trust is a common planning tool. It is created during life and can generally be changed or revoked by the grantor while the grantor is living and competent. In many estate plans, the grantor also serves as the initial trustee, keeping control over trust property during life. A successor trustee is named to step in when the grantor dies or becomes unable to continue serving.
Trusts can be used for several purposes, including management of property, continuity if incapacity occurs, privacy, distribution planning, and instructions for beneficiaries. A trust can also address how and when beneficiaries receive assets. For example, a trust may distribute assets outright at a certain age, hold assets for education or care, stagger distributions over time, or provide long-term management for a beneficiary who should not receive assets directly.
Trusts vary. A revocable trust is different from an irrevocable trust. A special needs trust is different from a basic revocable living trust. A charitable trust, asset protection trust, marital trust, credit shelter trust, or supplemental needs trust may be used in more specific circumstances.
Trust planning is highly dependent on state law, tax law, family structure, and asset type. The trust document should be drafted and reviewed by qualified legal counsel.
What is a pour-over will?
A pour-over will is commonly used with a revocable living trust. Its purpose is to direct certain assets into the trust after death if those assets were not already connected to the trust during life.
A pour-over will does not replace the trust. It works alongside it. The trust contains the more detailed distribution instructions, while the pour-over will acts as a backup mechanism for assets that were not otherwise addressed.
A pour-over will may also nominate guardians for minor children, name an executor, and revoke prior wills. It should be coordinated carefully with the trust so the documents do not conflict.
What are beneficiary designations?
Beneficiary designations are instructions filed directly with a financial institution, insurance company, retirement plan, pension or annuity provider, or account custodian. These designations often control who receives the asset at death.
Common assets with beneficiary designations include:
Life insurance policies
IRAs
401(k)s
403(b)s
Pensions
Annuities
Certain bank account
Certain brokerage accounts
Transfer-on-death registrations
Payable-on-death registrations
Beneficiary designations are important because they may control the asset regardless of what a will says. A will may leave everything to one person, but if a life insurance policy names someone else, the policy usually follows the beneficiary form.
Estate planning should include a beneficiary review. The review should confirm primary beneficiaries, contingent beneficiaries, names, percentages, tax implications, and whether any beneficiary is a minor, disabled, deceased, divorced, estranged, or otherwise inappropriate for the current plan.
Beneficiary forms should also be coordinated with retirement planning. Retirement accounts may have income tax consequences for beneficiaries, and naming a trust as beneficiary can require careful drafting and legal review.
What is titling?
Titling means whose name legally appears as the owner of an asset, such as a home, account, vehicle, or business interest. How an asset is titled affects how it may pass at death and who has authority over it during life.
Common ownership arrangements include:
Individual ownership
Joint tenancy
Tenancy by the entirety, where recognized
Tenancy in common
Community property, where applicable
Trust ownership
Business entity ownership
Transfer-on-death or payable-on-death registration
Joint ownership may allow an asset to pass automatically to a surviving owner, but it can also create unintended consequences. Adding a child to a deed or bank account may affect control, creditor exposure, taxes, ownership rights, and family expectations.
Business interests require separate review. An LLC operating agreement, buy-sell agreement, shareholder agreement, partnership agreement, or corporate record may control what happens to the business interest. Estate planning for a business should coordinate the estate documents with the entity documents.
Real estate often requires special attention because different states have different rules, and property located in more than one state can complicate administration.
What is a fiduciary?
An estate plan usually names several people to act in different roles. These people are fiduciaries, agents, representatives, or decision-makers.
Common roles include:
Executor or personal representative
Trustee
Successor trustee
Guardian for minor children
Financial agent under a power of attorney
Health care agent
Conservator or guardian nominee, depending on state law
Trust protector or advisor, in certain trust designs
The right person depends on the role. A trustee may need financial judgment and administrative discipline. A guardian for minor children may need parenting ability, values alignment, location stability, and willingness. A health care agent may need to understand medical preferences and be able to communicate clearly with providers.
A person or institution acting in a role considered a fiduciary role has a legal expectation to act in the best interest of the person(s) or entity they are acting on behalf of.
A person named in an estate plan should generally be trustworthy, organized, available, capable, and willing to serve. It is also wise to name alternates. If the first choice is unavailable, unwilling, deceased, incapacitated, or unsuitable when the time comes, the plan should not collapse.
Professional fiduciaries may be appropriate in some situations, especially where there is family conflict, complex assets, special needs planning, no suitable family member, or a need for long-term administration.
Guardianship for minor children
Parents with minor children should consider guardianship nominations. A guardian is the person nominated to care for minor children if both parents are unable to do so.
Guardianship planning has two separate issues:
Who should raise the children?
Who should manage money for the children?
Those roles may be handled by the same person or by different people. For example, one relative may be the best caregiver, while another person may be better suited to manage financial assets.
A trust can provide instructions for how assets should be held and used for minor children. This can include education expenses, health needs, housing, distribution ages, trustee discretion, and special instructions.
Guardian nominations should be reviewed after births, adoptions, moves, family changes, divorce, death of a nominee, or changes in the proposed guardian’s health, finances, values, or availability.
Personal property and family items
Personal property can cause conflict even when the financial value is modest. Jewelry, tools, firearms, vehicles, heirlooms, collectibles, artwork, family photos, keepsakes, and household items may carry sentimental value.
An estate plan can include instructions for tangible personal property. Some states allow a separate personal property memorandum to be referenced in the will or trust. This document may be easier to update than the main estate planning documents, depending on state law and document design.
Personal property instructions should be clear enough to identify the item and recipient. Vague descriptions can create disputes. If multiple beneficiaries may want the same item, the estate plan can include a method for choosing, rotating selections, selling items, or resolving disagreement.
Taxes in estate planning
Tax planning may or may not be a central issue in an estate plan. The importance depends on estate size, asset type, state law, federal law, income tax exposure, retirement accounts, business ownership, lifetime gifting, and beneficiary circumstances.
Common tax topics include:
Federal estate tax
State estate tax, where applicable
Inheritance tax, where applicable
Gift tax
Generation-skipping transfer tax
Income tax on retirement accounts
Capital gains tax
Basis adjustment at death
Taxation of trusts
Charitable planning
Business succession planning
Many families do not have a federal estate tax problem, but that does not mean tax planning is irrelevant. Retirement accounts, appreciated real estate, business interests, annuities, and inherited assets can still create income tax or capital gains issues.
Tax law changes over time. Estate plans should be reviewed when federal or state rules change, when the estate grows substantially, when a business is created or sold, when large gifts are made, or when beneficiaries’ tax situations become important.
Estate tax and income tax planning should be coordinated with legal and tax professionals.
Special situations
Some estate plans need additional planning because the family, assets, or beneficiary circumstances are more complex.
Common special situations include:
Blended families
Second marriages
Unmarried partners
Estranged children
Beneficiaries with disabilities
Minor beneficiaries
Spendthrift beneficiaries
Beneficiaries with creditor exposure
Business owners
Real estate investors
Property in multiple states
Charitable goals
Digital assets
Cryptocurrency
Firearms
Foreign assets or beneficiaries
Long-term care concerns
Veterans benefits
Medicaid planning
High net worth estates
Family conflict
Digital assets and records
Modern estate plans increasingly address digital property and electronic records. Digital assets may include online financial accounts, cloud storage, email, photos, social media, domain names, online businesses, reward accounts, cryptocurrency wallets, and subscription platforms.
The legal treatment of digital assets depends on the asset, platform, account agreement, and applicable law. Access can be difficult if passwords, private keys, or authorization records are unavailable.
A practical estate planning file may include an inventory of digital accounts, instructions for accessing password management tools, device access information, and contact information for advisors. Sensitive information should be stored securely and updated regularly.
Cryptocurrency requires particular care because access may depend on private keys or recovery phrases. If those are lost, the asset may be inaccessible.
Incapacity planning
Estate planning also includes planning for incapacity. Incapacity means a person is alive but unable to make or communicate decisions.
Two commonly used incapacity documents are the financial power of attorney and the medical directive. A financial power of attorney allows a named agent to handle financial matters under the terms of the document. A medical directive, health care proxy, or advance health care directive allows medical wishes to be documented and may name someone to make health care decisions.
These documents should be reviewed under state law. Requirements, terminology, authority, witnesses, notarization, and acceptance by institutions vary.
Reviewing an estate plan
Estate planning is not finished forever once documents are signed. A plan should be reviewed periodically and after major life events.
Common review triggers include:
Marriage
Divorce
Birth or adoption of a child
Death of a spouse, beneficiary, trustee, executor, or guardian
Move to another state
Purchase or sale of a home
New business ownership
Sale of a business
Significant increase or decrease in assets
New retirement accounts or insurance policies
Change in tax law
Change in beneficiary needs
Family conflict
Diagnosis of serious illness
Long-term care planning concerns
A beneficiary developing special needs
A child reaching adulthood
Charitable goals changing
A review should include current documents, asset ownership, beneficiary designations, fiduciary choices, tax issues, digital assets, insurance policies, and whether the plan still reflects current wishes.
A basic estate planning checklist
A basic estate planning review often includes the following:
Identify assets, debts, income sources, and insurance policies.
Review how major assets are titled.
List all beneficiary designations.
Decide who should receive property.
Decide who should serve as executor, trustee, agent, and guardian.
Consider whether a will, trust, or both are appropriate.
Review retirement accounts and tax implications.
Address minor children or dependents.
Consider special-needs, long-term care, or blended-family planning.
Prepare or review powers of attorney and medical directives.
Organize digital asset information.
Store documents securely.
Tell appropriate people where important information can be found.
Review the plan after major life changes.
This checklist is not a substitute for legal advice. It is a starting point for organizing the issues.
Estate Planning Basics
What is an estate plan?
Estate planning is the process of deciding how your property, responsibilities, personal instructions, and decision-making authority should be handled during life and after death.
A complete estate plan may address who receives assets, who manages the estate, who can act if you become incapacitated, how minor children or dependents should be cared for, how beneficiary-controlled assets should pass, and how instructions should be documented for family members, fiduciaries, attorneys, financial institutions, and medical providers.
The details vary by state, family structure, asset type, and planning goals. A simple estate plan may include only a few documents. A more comprehensive plan may include a will, revocable living trust, pour-over will, beneficiary designation review, powers of attorney, health care directives, trust schedules, asset inventories, instructions for trustees, and planning for taxes, retirement accounts, business interests, real estate, special needs, or long-term care planning.
This article explains the basic parts of estate planning in plain terms.
What counts as an estate?
Your estate generally includes the property, accounts, rights, and financial interests you own or control. This may include:
Real estate
Bank accounts
Investment accounts
Retirement accounts
Life insurance
Annuities
Business interests
Vehicles
Personal property
Digital assets
Collectibles
Debts and liabilities
Contracts or ownership rights
Property owned jointly with another person
Estate planning usually begins with inventory. Before deciding who should receive property or who should manage responsibilities, it helps to understand what exists, how each asset is owned, whether each asset has a beneficiary designation, and whether any debts or liens are attached.
Ownership is important. For example, an asset owned individually may be handled differently than an asset owned jointly. A retirement account with a beneficiary designation may pass differently than a bank account with no beneficiary.
Real estate may require special attention because title, state law, mortgage obligations, and family use can all affect planning.
A good inventory does not have to be complicated. It should identify the asset, approximate value, owner, institution, beneficiary if any, and any notes needed by the person who may later manage the asset.
What are the goals of estate planning?
Estate plans are not all designed for the same purpose. The right structure depends on what the person wants the plan to accomplish.
Common estate planning goals include:
Naming who receives property after death
Naming an executor, personal representative, trustee, or successor trustee
Providing for a spouse or partner
Providing for children, grandchildren, or other beneficiaries
Naming guardians for minor children
Reducing administrative delay where possible
Keeping certain family matters private when appropriate
Coordinating beneficiary designations
Planning for incapacity
Managing tax exposure
Protecting a beneficiary who may be young, disabled, financially inexperienced, or vulnerable
Planning for business ownership or real estate
Supporting charitable causes
Giving instructions for personal property or family items
Clarifying who should act and what authority that person should have
The strongest estate plans usually begin with specific objectives rather than document selection. “I need a will” or “I need a trust” is less precise than “I want my spouse protected, my home handled clearly, my children provided for, my accounts coordinated, and someone I trust able to act if I cannot.”
What is a will?
A will, often called a last will and testament, is a legal document that states how a person wants certain property distributed after death. It can also nominate an executor or personal representative, name guardians for minor children, and provide instructions about personal property.
A will is one of the most familiar estate planning documents because it allows a person to put final instructions in writing. It can be useful even when a trust is also used because a will can address assets not otherwise covered and can name guardians for minor children.
A will usually includes several key sections:
Identification of the person making the will
Revocation of prior wills
Appointment of an executor or personal representative
Distribution instructions
Guardian nominations for minor children, if applicable
Instructions for debts, taxes, and expenses
Signatures, witnesses, and other formalities required by state law
A will does not control every asset. Assets with beneficiary designations, joint ownership rights, transfer-on-death designations, payable-on-death registrations, or trust ownership may pass outside the will. This is why beneficiary and ownership reviews are part of estate planning.
A will also does not give another person authority to manage your affairs while you are alive. That role is usually addressed through separate incapacity documents.
What is a trust?
A trust is a legal arrangement involving a grantor, a trustee, and one or more beneficiaries. The grantor creates the trust. The trustee manages trust assets according to the trust terms. The beneficiaries receive the benefit of the trust as described in the trust document.
A revocable living trust is a common planning tool. It is created during life and can generally be changed or revoked by the grantor while the grantor is living and competent. In many estate plans, the grantor also serves as the initial trustee, keeping control over trust property during life. A successor trustee is named to step in when the grantor dies or becomes unable to continue serving.
Trusts can be used for several purposes, including management of property, continuity if incapacity occurs, privacy, distribution planning, and instructions for beneficiaries. A trust can also address how and when beneficiaries receive assets. For example, a trust may distribute assets outright at a certain age, hold assets for education or care, stagger distributions over time, or provide long-term management for a beneficiary who should not receive assets directly.
Trusts vary. A revocable trust is different from an irrevocable trust. A special needs trust is different from a basic revocable living trust. A charitable trust, asset protection trust, marital trust, credit shelter trust, or supplemental needs trust may be used in more specific circumstances.
Trust planning is highly dependent on state law, tax law, family structure, and asset type. The trust document should be drafted and reviewed by qualified legal counsel.
What is a pour-over will?
A pour-over will is commonly used with a revocable living trust. Its purpose is to direct certain assets into the trust after death if those assets were not already connected to the trust during life.
A pour-over will does not replace the trust. It works alongside it. The trust contains the more detailed distribution instructions, while the pour-over will acts as a backup mechanism for assets that were not otherwise addressed.
A pour-over will may also nominate guardians for minor children, name an executor, and revoke prior wills. It should be coordinated carefully with the trust so the documents do not conflict.
What are beneficiary designations?
Beneficiary designations are instructions filed directly with a financial institution, insurance company, retirement plan, pension or annuity provider, or account custodian. These designations often control who receives the asset at death.
Common assets with beneficiary designations include:
Life insurance policies
IRAs
401(k)s
403(b)s
Pensions
Annuities
Certain bank account
Certain brokerage accounts
Transfer-on-death registrations
Payable-on-death registrations
Beneficiary designations are important because they may control the asset regardless of what a will says. A will may leave everything to one person, but if a life insurance policy names someone else, the policy usually follows the beneficiary form.
Estate planning should include a beneficiary review. The review should confirm primary beneficiaries, contingent beneficiaries, names, percentages, tax implications, and whether any beneficiary is a minor, disabled, deceased, divorced, estranged, or otherwise inappropriate for the current plan.
Beneficiary forms should also be coordinated with retirement planning. Retirement accounts may have income tax consequences for beneficiaries, and naming a trust as beneficiary can require careful drafting and legal review.
What is titling?
Titling means whose name legally appears as the owner of an asset, such as a home, account, vehicle, or business interest. How an asset is titled affects how it may pass at death and who has authority over it during life.
Common ownership arrangements include:
Individual ownership
Joint tenancy
Tenancy by the entirety, where recognized
Tenancy in common
Community property, where applicable
Trust ownership
Business entity ownership
Transfer-on-death or payable-on-death registration
Joint ownership may allow an asset to pass automatically to a surviving owner, but it can also create unintended consequences. Adding a child to a deed or bank account may affect control, creditor exposure, taxes, ownership rights, and family expectations.
Business interests require separate review. An LLC operating agreement, buy-sell agreement, shareholder agreement, partnership agreement, or corporate record may control what happens to the business interest. Estate planning for a business should coordinate the estate documents with the entity documents.
Real estate often requires special attention because different states have different rules, and property located in more than one state can complicate administration.
What is a fiduciary?
An estate plan usually names several people to act in different roles. These people are fiduciaries, agents, representatives, or decision-makers.
Common roles include:
Executor or personal representative
Trustee
Successor trustee
Guardian for minor children
Financial agent under a power of attorney
Health care agent
Conservator or guardian nominee, depending on state law
Trust protector or advisor, in certain trust designs
The right person depends on the role. A trustee may need financial judgment and administrative discipline. A guardian for minor children may need parenting ability, values alignment, location stability, and willingness. A health care agent may need to understand medical preferences and be able to communicate clearly with providers.
A person or institution acting in a role considered a fiduciary role has a legal expectation to act in the best interest of the person(s) or entity they are acting on behalf of.
A person named in an estate plan should generally be trustworthy, organized, available, capable, and willing to serve. It is also wise to name alternates. If the first choice is unavailable, unwilling, deceased, incapacitated, or unsuitable when the time comes, the plan should not collapse.
Professional fiduciaries may be appropriate in some situations, especially where there is family conflict, complex assets, special needs planning, no suitable family member, or a need for long-term administration.
Guardianship for minor children
Parents with minor children should consider guardianship nominations. A guardian is the person nominated to care for minor children if both parents are unable to do so.
Guardianship planning has two separate issues:
1. Who should raise the children?
2. Who should manage money for the children?
Those roles may be handled by the same person or by different people. For example, one relative may be the best caregiver, while another person may be better suited to manage financial assets.
A trust can provide instructions for how assets should be held and used for minor children. This can include education expenses, health needs, housing, distribution ages, trustee discretion, and special instructions.
Guardian nominations should be reviewed after births, adoptions, moves, family changes, divorce, death of a nominee, or changes in the proposed guardian’s health, finances, values, or availability.
Personal property and family items
Personal property can cause conflict even when the financial value is modest. Jewelry, tools, firearms, vehicles, heirlooms, collectibles, artwork, family photos, keepsakes, and household items may carry sentimental value.
An estate plan can include instructions for tangible personal property. Some states allow a separate personal property memorandum to be referenced in the will or trust. This document may be easier to update than the main estate planning documents, depending on state law and document design.
Personal property instructions should be clear enough to identify the item and recipient. Vague descriptions can create disputes. If multiple beneficiaries may want the same item, the estate plan can include a method for choosing, rotating selections, selling items, or resolving disagreement.
Taxes in estate planning
Tax planning may or may not be a central issue in an estate plan. The importance depends on estate size, asset type, state law, federal law, income tax exposure, retirement accounts, business ownership, lifetime gifting, and beneficiary circumstances.
Common tax topics include:
Federal estate tax
State estate tax, where applicable
Inheritance tax, where applicable
Gift tax
Generation-skipping transfer tax
Income tax on retirement accounts
Capital gains tax
Basis adjustment at death
Taxation of trusts
Charitable planning
Business succession planning
Many families do not have a federal estate tax problem, but that does not mean tax planning is irrelevant. Retirement accounts, appreciated real estate, business interests, annuities, and inherited assets can still create income tax or capital gains issues.
Tax law changes over time. Estate plans should be reviewed when federal or state rules change, when the estate grows substantially, when a business is created or sold, when large gifts are made, or when beneficiaries’ tax situations become important.
Estate tax and income tax planning should be coordinated with legal and tax professionals.
Special situations
Some estate plans need additional planning because the family, assets, or beneficiary circumstances are more complex.
Common special situations include:
Blended families
Second marriages
Unmarried partners
Estranged children
Beneficiaries with disabilities
Minor beneficiaries
Spendthrift beneficiaries
Beneficiaries with creditor exposure
Business owners
Real estate investors
Property in multiple states
Charitable goals
Digital assets
Cryptocurrency
Firearms
Foreign assets or beneficiaries
Long-term care concerns
Veterans benefits
Medicaid planning
High net worth estates
Family conflict
Digital assets and records
Modern estate plans increasingly address digital property and electronic records. Digital assets may include online financial accounts, cloud storage, email, photos, social media, domain names, online businesses, reward accounts, cryptocurrency wallets, and subscription platforms.
The legal treatment of digital assets depends on the asset, platform, account agreement, and applicable law. Access can be difficult if passwords, private keys, or authorization records are unavailable.
A practical estate planning file may include an inventory of digital accounts, instructions for accessing password management tools, device access information, and contact information for advisors. Sensitive information should be stored securely and updated regularly.
Cryptocurrency requires particular care because access may depend on private keys or recovery phrases. If those are lost, the asset may be inaccessible.
Incapacity planning
Estate planning also includes planning for incapacity. Incapacity means a person is alive but unable to make or communicate decisions.
Two commonly used incapacity documents are the financial power of attorney and the medical directive. A financial power of attorney allows a named agent to handle financial matters under the terms of the document. A medical directive, health care proxy, or advance health care directive allows medical wishes to be documented and may name someone to make health care decisions.
These documents should be reviewed under state law. Requirements, terminology, authority, witnesses, notarization, and acceptance by institutions vary.
Reviewing an estate plan
Estate planning is not finished forever once documents are signed. A plan should be reviewed periodically and after major life events.
Common review triggers include:
Marriage
Divorce
Birth or adoption of a child
Death of a spouse, beneficiary, trustee, executor, or guardian
Move to another state
Purchase or sale of a home
New business ownership
Sale of a business
Significant increase or decrease in assets
New retirement accounts or insurance policies
Change in tax law
Change in beneficiary needs
Family conflict
Diagnosis of serious illness
Long-term care planning concerns
A beneficiary developing special needs
A child reaching adulthood
Charitable goals changing
A review should include current documents, asset ownership, beneficiary designations, fiduciary choices, tax issues, digital assets, insurance policies, and whether the plan still reflects current wishes.
A basic estate planning checklist
A basic estate planning review often includes the following:
Identify assets, debts, income sources, and insurance policies.
Review how major assets are titled.
List all beneficiary designations.
Decide who should receive property.
Decide who should serve as executor, trustee, agent, and guardian.
Consider whether a will, trust, or both are appropriate.
Review retirement accounts and tax implications.
Address minor children or dependents.
Consider special-needs, long-term care, or blended-family planning.
Prepare or review powers of attorney and medical directives.
Organize digital asset information.
Store documents securely.
Tell appropriate people where important information can be found.
Review the plan after major life changes.
This checklist is not a substitute for legal advice. It is a starting point for organizing the issues.
Specific to Medicare Plans, We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. We do offer coverage in most states, representing over 130 organizations which offer over 300 different plans throughout the United States. Contact one of our agents to learn more about what companies and plans we represent in your area.
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