Will and Estate Planning Essentials

Will And Estate Planning Essentials

Estate Planning is crucial for several reasons. Not properly preparing for what should happen while you’re still sound and capable can leave you incapable of having any say in how your estate will be handled or what your loved ones receive when that inevitable moment comes. Planning ensures your future is exactly as you envision it. 

A thoroughly prepared Estate Plan will lay out your wishes exactly, in the most tax-advantaged manner, so you can trust there won’t be any questions, misunderstandings, or misconceptions about what you want.  

1. Wills and Trusts

It may sound hard or expensive to have a will or trust—something only the wealthy have. That evaluation is flawed. Even if you don’t have many significant assets, a will or trust should be one of the major elements of your estate plan. 

Will ensure your property is divided following a person’s wishes (if drafted according to state laws). Some trusts aid in reducing estate taxes or legal troubles. But simply having a will or trust is insufficient. Critically crucial is how the document is written.

You should write your will or trust according to how you’ve designated the assets that pass without a will. 

For instance, let’s say your sister is already listed as a beneficiary on your retirement account or insurance policy (assets that typically pass outside a will to a named beneficiary). 

If that is the case, you should avoid leaving the identical asset to a second cousin in your will since it may result in a will challenge. Not to mention that throughout a legal struggle, both parties could grow hatred toward one another (and you).

2. Durable Power of Attorney

It’s crucial to create a durable power of attorney (POA) so that an agent or someone you designate can act on your behalf if you cannot. If you don’t have power of attorney, a judge may be forced to make decisions regarding your assets on your behalf, which may not be what you would have preferred. This could happen if you are determined to be mentally incompetent.

This agreement may grant your agent the authority to do business on your behalf, including real estate transactions, financial transactions, and other legal choices. This kind of POA is revocable by the principal at any time, usually when they are declared physically fit. Capable, or after passing away.

It makes sense for spouses to create reciprocal powers of attorney in many families. Another family member acting as the agent might make more sense in some circumstances, as spouses are frequently clever enough to do so.

3. Beneficiary Designations

As was previously mentioned, some of your assets, such as those in your 401(k) plan, may be passed to your heirs without being specified in the will. 

Keeping a beneficiary—and a contingent beneficiary—on such an account is crucial. Insurance plans should name both a beneficiary and a contingent beneficiary, as they may also pass without a will.

If you don’t choose a beneficiary or the beneficiary is incapacitated or deceased, a court may be left to decide what will happen to your assets. In addition, it is doubtful that a judge unaware of your circumstances, beliefs, or intent will reach the same conclusion as you.

4. Letter of Intent

Your executor or beneficiary will receive a letter of intent after you pass away. The goal is to specify what should happen to a specific asset in the event of your passing or incapacity. In certain letters of intent, special wishes or funeral information is also included.

Even though such a document might not be legally legitimate, it helps a probate judge understand your objectives and may even aid in distributing your assets if the will is defective.

5. Healthcare Power of Attorney

In the case of incapacity, a healthcare power of attorney (HCPA) appoints another person—typically a spouse or family member—to make critical healthcare decisions on your behalf.

You should choose a person you trust, who shares your opinions, and who is likely to suggest a course of action you agree with if you consider executing such a document. After all, this person might be in control of your life.

In case your first choice is unable to act or is unavailable, a backup agent should also be chosen.

6. Guardianship Designations

Although this provision is included in many wills and trusts, some do not. Selecting a guardian to care for your minor children is a crucial and sometimes ignored decision whether you have children or plan to have children. 

Make sure the person or couple you chose agrees with your viewpoints, is financially stable, and is genuinely interested in starting a family. As with other designations, an additional guardian or substitute should be mentioned.

Without guardianship designations, a judge can decide that your kids should live with a relative you wouldn’t have chosen. Additionally, in extreme circumstances, the court may order that the state adopt your kids as wards.


Making these estate planning tools is insufficient. It is highly advised to review these documents every few years to ensure they are current and represent your current wishes. Review is essential after significant life events like marriage or divorce. Consult your financial advisor about a beneficiary review, and work with your lawyer to update any outdated legal paperwork.

You may also visit our Concise Guide To Making A Will For Seniors to help you get started and navigate through the process of preparing your will.