Estate Planning Documents Everyone Needs

Having a solid financial plan during your lifetime is essential for peace of mind. But just as important is preparing for what happens after your lifetime, or in the event you can no longer manage your own affairs.

That’s where estate planning comes in. An effective estate plan ensures your wishes are followed, your loved ones are cared for and your assets are transferred the way you intend. 

Whether your goals are simple or complex, here are the essential components of a well-rounded estate plan. Each of these documents can, and often should, be updated as your life evolves.

Key Takeaways:

• Everyone should have basic documents like a will, powers of attorney and updated beneficiary designations.
• A trust can help avoid probate, protect assets and provide more control over how your wealth is distributed.
• Your estate plan should be reviewed after major life events or changes in tax law.
• A financial adviser can help coordinate your plan with your attorney and ensure everything fits together.

How do I plan for incapacity?

It’s uncomfortable to think about being unable to manage your own affairs due to illness or injury. But having the right legal tools in place can make a difficult time far less stressful for you and your family.

• Durable financial power of attorney – Allows someone to handle financial matters on your behalf. It appoints someone to handle banking, investments, bill payments and more if you become incapacitated.
• Health care power of attorney – Ensures someone can make medical decisions for you and that your end-of-life wishes are respected.
• Living will (advance directive) – States your preferences for end-of-life care and medical interventions.

Even young adults should consider powers of attorney once they reach the age of adulthood, especially if parents may need to step in during a medical emergency.

How can I plan for a wealth transfer?

Your estate plan can also be viewed as your final financial plan. After all, it outlines how your assets are distributed and helps minimize delays, disputes and taxes.

• Will – Directs the distribution of individually titled assets and names an executor to handle your estate. Ironically, this is the document most people think of when it comes to estate planning – and yet, less than half of U.S. adults have on, according to a Gallup poll.
• Revocable trust – Can help avoid probate, provide privacy and allow for more complex planning during your lifetime or after.
• Other trusts – Trusts are powerful tools that can help you customize how and when your assets are distributed. While a revocable trust is used during your lifetime, irrevocable trusts are commonly used to protect assets, reduce estate taxes, or provide for specific needs.

Trusts can be complex, but the right structure can offer greater control, protection and tax efficiency, especially for larger estates or families with unique needs.

Not sure what might make sense for your situation? Learn more about the difference between a will and a trust here.

• Beneficiary designations – Direct how retirement accounts and life insurance proceeds are paid. Make sure these are current, since they can override your will or trust when it comes to accounts like IRAs, 401(k)s and life insurance. Need to review yours? Learn more about updating your beneficiaries here.

How does a financial adviser help with estate planning?

As financial advisers, we don’t draft legal documents. But we play a key role in the estate planning process.

For instance, at Advance Capital Management, we regularly help clients:

• Coordinate with your estate attorney – We help to align your financial plan and estate plan, and we’ll work with your attorney to address any complexities.
• Review account titling and beneficiaries – We help identify common (and costly) mistakes so your intentions are followed.
• Forecast your legacy – We use planning tools to project the long-term impact of your estate choices, from taxes to how sustainable your legacy will be for the next generation.
• Facilitate family conversations – Many clients ask us to join or guide family meetings to communicate the “why” behind their estate choices and ensure loved ones are prepared.

An estate plan isn’t just a set of documents, it’s a strategy. And that strategy works best when your financial, legal, and tax professionals are working as a team.

Who should I name to carry out my estate plan?

The success of your estate plan often depends on the people carrying it out:

• Executor – Administers your estate after death.
• Trustee – Manages trust assets according to your instructions.
• Agents under power of attorney – Step in when you're unable to act.

These individuals should be responsible, organized and ideally familiar with your values. It’s wise to speak with them ahead of time to ensure they’re comfortable with their roles and understand your intentions.

In some cases, clients may choose a corporate trustee to provide continuity and professional management, especially when the estate is complex or when family dynamics are sensitive.

When should I update my estate plan?

Your estate plan should evolve with your life. Consider reviewing your documents after:

• Marriage or divorce
• The birth of a child or grandchild
• Death of a spouse, beneficiary, or named fiduciary
• A significant change in wealth
• Moving to a new state
• Major tax law changes

At Advance Capital, we conduct regular check-ins with clients to revisit these and other financial documents, making sure their plans still reflect their goals.

The bottom line

Estate planning isn’t just for the wealthy or elderly. It’s a critical part of your overall financial health. Having the right documents in place can protect your loved ones, provide clarity during difficult times and ensure your legacy is carried out the way you intend.

Even if you’ve already created an estate plan, life changes.

If you’d like help reviewing your financial plan or coordinating with your estate attorney, let’s talk. It’s never too early – or too late – to take this important step.