What is estate planning?
Over the years I’ve received many questions about wills and estate planning. In reality, most adults over 18 should have at least part of an estate plan in place.
Recently I asked readers what they wanted to know about estate planning. Common questions included:
- What is estate planning and why is it important?
- Is there any situation where you don’t need an estate plan?
- At what age should I start planning?
- Should I do it myself or hire a lawyer?
- What’s the difference between a trust and a will?
- Who should have a will or trust?
- Who is best to name as executor?
- What happens if someone dies without a plan?
- What are the main steps in estate planning?
To answer these, I worked with Vicki Cook and Amy Blacklock, coauthors of Estate Planning 101 and founders of Women Who Money. They’ve written extensively about personal finance and estate planning and provided practical, easy-to-follow guidance below.
They also offer free estate planning printables—checklists and resources you can use right away. This guide is not sponsored; it’s shared to help readers get started and reduce the stress around planning.
What is estate planning? + common questions answered
1. What is estate planning and why is it important?
Estate planning is not only for the wealthy, elderly, or seriously ill. It’s for virtually anyone who wants protection and control over future medical decisions, finances, and the distribution of assets. An estate plan typically includes more than a will—it also covers medical directives and powers of attorney.
An estate plan provides two main benefits: protection and control.
Protection for:
- You, if you become mentally or physically incapacitated and cannot make decisions for yourself.
- Your minor children, by naming a legal guardian.
- Your estate—directing how assets and personal possessions are distributed after death.
- Your loved ones, by naming beneficiaries and making distribution choices clear.
Without these documents, you risk losing control over who makes medical or financial decisions for you, who raises your children, and how your assets are distributed.
2. Is there a situation in which you would not need an estate plan?
Anyone over 18 should have at least some estate planning documents. A young adult with few assets may only need an advance medical directive, a health care power of attorney, and HIPAA authorization forms. A financial power of attorney can also be useful.
As assets, family complexity, or responsibilities grow, adding a will and possibly a trust becomes important. Trusts are especially helpful for blended families, special needs dependents, unmarried partners, property in multiple states, and other complex scenarios.
If your life is simple and you have few assets that already have beneficiary designations, start with medical directives and powers of attorney, and add a will or trust as your situation changes.
3. Should I do my estate planning myself or hire a lawyer?
Some estate planning tasks are appropriate for DIY. Advance medical directives are often straightforward and available through doctors, hospitals, or state resources. Online templates can also help with basic documents.
However, important documents like powers of attorney, wills, and trusts should be executed properly to be valid. If paperwork is invalid, your family may face court-appointed guardianship or probate complications. For anything more than a very simple, uncomplicated estate, working with an attorney is usually advisable. Lawyers can ensure correct language, spot pitfalls, and suggest strategies you might not have considered.
4. What is the difference between a will and a trust?
A will and a trust both direct the distribution of your assets, but they work differently. A will is typically simpler and less expensive, but it goes through probate, which can be lengthy, costly, and becomes public record. Wills do not help if you become incapacitated—they only take effect after death.
A living trust (often a revocable living trust) can help avoid probate, preserve privacy, and provide management of assets if you become incapacitated because a trustee can step in. Trusts are generally more expensive to set up and require retitling assets into the trust’s name, but they offer additional flexibility and privacy.
5. Who should have a will or trust?
Most people should have a will once they begin acquiring assets or have a spouse, partner, or children to protect. Don’t wait until you’re older or wealthier—having a will in place brings peace of mind.
Consider a trust if you have any of the following:
- Minor children
- Blended family
- Unmarried partner
- Property in multiple states
- Business ownership
- Serious health issues
- Complicated family dynamics
6. Who is best to name as executor?
Many people name a spouse or partner as executor, which often makes sense. If naming an adult child or friend, choose someone responsible, patient, financially stable, and a good communicator. Executors manage legal affairs, pay bills, and distribute assets, so the role can be time-consuming. Professional fiduciaries or trust companies are also an option when no suitable personal candidate exists.
7. What happens if a person passes away without an estate plan?
Without a will or estate plan, a person is intestate and state laws decide who inherits and who becomes guardian of minor children. Succession laws typically prioritize spouse, children, parents, siblings, and extended relatives. Complex family situations can lead to disputes and unintended outcomes without a plan.
8. What are the main steps in estate planning?
Estate planning can be organized into eight clear steps that move you from goals to ongoing updates:
- Create estate planning goals: Decide what you want your plan to achieve—protecting yourself and dependents, providing for loved ones, naming guardians, funding future expenses, supporting charities, and minimizing family conflict.
- Organize your paperwork: Inventory assets and debts to determine your net worth. Maintain and update this inventory as your situation changes.
- Designate beneficiaries: Review accounts and policies with beneficiary or transfer-on-death designations. Beneficiary designations override wills.
- Choose an executor and guardian: Name a personal representative in your will and identify a guardian for minor children. Make sure chosen individuals are willing and able to serve.
- Draft essential protection documents: At minimum, prepare an advance care directive, financial power of attorney, and a will. Consider who should be named and discuss your wishes with them beforehand.
- Consider a revocable living trust: Trusts can help avoid probate, preserve privacy, and provide continuity if you become incapacitated.
- Make it legal: Use reputable online services only for simple estates; consult an attorney for complex situations. Attorneys ensure proper language and validity of documents. Check if your employer offers reduced-cost legal help.
- Keep going: Estate planning is ongoing. Review and update your plan after major life events and periodically over time.
Although discussing death and incapacity is emotional, starting these conversations and documenting your wishes relieves stress for loved ones and encourages them to get their affairs in order too.
9. About Estate Planning 101
Estate Planning 101 is designed to show that estate planning is for everyone. It explains the fundamentals in clear, practical terms and includes checklists, thought exercises, and action steps. The book also covers retirement and tax considerations and helps readers prepare for productive attorney consultations by organizing their estate, clarifying goals, and identifying key questions.
Have you started estate planning? Why or why not?