June 24, 2024
Estate Planning Checklist

What is estate planning?

Estate planning is the process of creating legal documents that outline the following:


How to distribute your property after you die

Who will get custody of your children and pets

Who will make financial and medical decisions on your behalf once you can no longer make them yourself

In addition to this documentation, an estate plan can include life insurance and long-term care insurance policies.


The goal is to protect you, your family and your assets. It ensures your property is transferred to the appropriate people while limiting estate taxes to maximize the legacy you pass to your heirs. The tax burden can vary based on your estate’s value and your state’s tax threshold, with larger estates typically incurring higher tax bills.


Dying without a will is called dying intestate. If you die intestate, your state’s laws determine who gets your property and who gets custody of your children. An estate plan allows you to make these choices based on your wishes and your family’s best interests.

READ THIS: Estate Planning Checklist

How does estate planning work?

An estate plan may involve a will, trust, power of attorney (POA) and health care directives. You can use an online service or work with various professionals — such as your financial planner, estate attorney and accountant — to create these documents.



A last will and testament is a legal document that includes how to distribute your property after you die. You appoint beneficiaries and assign property to them. You might also name guardians of your pets and children within your will. Once the will is valid, you become the “testator” — the person who made a will.


If you die with a will, your executor — the person you designate to carry out your plan — files a petition to the probate court to ensure your will is valid and officially appoints the executor. Probate is the process of settling an estate and transferring property. The court assesses your assets and pays debts before distributing anything to your beneficiaries. Not all your assets must go through probate, but it depends on your state’s laws.



A trust is another legal instrument that transfers ownership of your assets to your beneficiaries. While a will takes effect after you die, a trust can become active during your lifetime, after you die or if you become incapacitated. Trusts allow you to be more specific about how to manage your assets. Additionally, trusts may not have to go through probate.

When you create a trust, you are known as the “trustor.” There are two types of trusts you can make. A revocable trust is one that you (as the trustor) can change or revoke after you sign it. In contrast, you can’t amend an irrevocable trust except for certain circumstances.


Power of attorney (POA)

In estate planning, POA gives someone — called your agent or attorney-in-fact — the power over certain financial decisions when you can no longer make them yourself. For example, your agent may make decisions regarding taxes, property, financial accounts and other financial affairs on your behalf.


There are two types of POAs:


Durable power of attorney: A durable POA goes into effect immediately once the document is signed and remains until you die or revoke it.

Limited power of attorney: A limited POA (also called a springing power of attorney) goes into effect once certain conditions are met, such as when you become incapacitated, and expires once those conditions are no longer present.

During estate planning, you’ll select one or multiple agents to represent you and create a document outlining the authority you’re granting. Select someone you trust; many choose family members, such as spouses or children.


Health care directives

Lastly, an important part of estate planning is specifying health care wishes using advance health care directives, also called medical directives. According to the American Bar Association (ABA), each state allows you to create legal documents specifying your medical preferences if you become incapacitated and cannot make decisions yourself. However, the laws around the types of acceptable documents vary.


Two common types of health care directives include:


Living will: A living will includes a list of life-sustaining medical care you want or don’t want. This is different from the last will mentioned above.

Health care proxy: A health care proxy is a document designating someone to make medical decisions on your behalf. Some states call this a medical or healthcare power of attorney.

Who needs estate planning?

A common misconception is that estate planning is only for wealthy individuals, but it’s for everyone.


“You especially need estate planning if you have minor children. You need a plan of who is going to take care of them and manage their finances until they are old enough to inherit. You have more control over this when you proactively plan,” says Shann Chaudhry, Esq., estate planning attorney in Texas.


The components of your estate plan may depend on your circumstances. For example, if you are young and don’t have children, you may only create a simple will and POAs. Discuss your needs with your estate planner to determine the best fit.

The age you start planning depends on your situation, but it’s helpful to do so before you expect you’ll need it. Chaudhry advises beginning the estate planning process around 30, but earlier if you have children.

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