Learn which documents you MUST have for your estate plan, what they are used for and where to find them in this free mini-class.

ES401: Essential Estate Planning Documents

Learn which documents you MUST have for your estate plan, what they are used for and where to find them in this free mini-class.

If you’re just stopping by for the first time, this is a class in a series of classes over the next few months which will culminate in the development of a complete financial plan.  Stop by HERE for a complete list of classes currently available and HERE for more information about the website.

Class Objectives: To learn the essential documents needed to start your estate plan.
Prerequisites: none
Handout: none
Assignment: Create each of the following required estate plan documents that you do not currently have.


Let’s talk about death today, alright? Well… let’s just skip past the actual death part and think about what happens after you die. Who will be the one to manage your affairs? Who will get your property when you die? What about guardians for your children if you have any?

These are extremely important questions. Yet, most people do not take the time to implement an estate plan that will take care of these matters.

Estate planning is all about ensuring that your wishes are carried out even after your death as well as minimizing time and expense in doing so. A well thought out plan can greatly simplify things for those that are left behind.

The regular legal process for a death is as follows:

  1. The executor of your estate files papers in the local probate court (the judge will appoint an executor if you die without a will).
  2. Information is gathered about assets, debts not discharged at death, etc.
  3. This information about your assets and proof of the validity of your will is presented in probate court.
  4. The process goes through probate court to ensure that your assets are properly allocated according to your will and state law. Any assets that are jointly owned, in a separate trust, or have specified legal beneficiaries (such as retirement accounts and life insurance) are settled outside of probate.

Creating an estate plan mostly involves a lot of thinking, planning, and paperwork, but for most people, it’s fairly simple overall. We are going to go through the essential documents you need in order to have a sound estate plan.

A Last Will & Testament

A will simply provides instruction on how you want your assets distributed after your death. It can be as simple as a handwritten, witnessed document that specifies your wishes (although this is not the recommended option!), or it can be a more complex, customized form often drafted by an attorney.

There are a few key functions that a will provides:

  • Specifies an executor for your estate. This person should be given a copy of your will and will be the one to manage everything from paying your bills and filing your final tax return to helping with the probate court process. Be sure that you choose someone that is organized and trustworthy.
  • Stipulates asset distribution and allocation to heirs and charities. This is the most common thing you think of when you hear about a will. If you do not have a will, the court will decide where your money and other assets will go, which will very likely not be the same as if you had decided yourself.
  • Designates a guardian and a backup guardian for your children upon your death. This is the single most important part of your will if you have children. You’ll want to talk to this person beforehand and make sure that they are willing to take on this important responsibility.
  • Specifies your funeral and burial preferences (where you want to be buried or if you want to be cremated).

In conjunction with your will, you should keep an inventory of your assets. A simple way to do this would be to use your home inventory, which you should already have for Homeowner’s Insurance purposes.

If you die without a will, the probate court will appoint your executor and determine your heirs. Probate laws vary among states, but without a formal will close friends will be ineligible and all assets will go to surviving spouses, children and parents. It is most common for states to evenly divide assets among the living spouse and children.

There are numerous free will templates online such as LawDepot or you can purchase inexpensive software such as Quicken Willmaker Plus to walk you through the process. If you have significant assets or a blended family, you will likely want the help of an attorney to ensure that your will carries out your wishes. Our employer-sponsored group life insurance included free will preparation, which we took advantage of (something to check for in your life insurance policy!).

Living Will

An advanced medical directive, also known as a living will or health care directive, specifies your wishes regarding medical care to prolong your life. There are certain stipulations that make this document effective in the future, such as if you are unconscious and are unable to make these decisions on your own. Or, you can make your living will effective immediately.

Some of the specific things that are often addressed in a living will include:

  • Resuscitation (CPR)
  • Blood transfusions
  • Life support
  • Intravenous feeding
  • Life-saving surgery

Examples of times that you would need a living will in place include if you have a terminal illness or if you are on life support and are deemed to be in a vegetative state.

A great resource for finding a living will template specific to your state is the AARP’s advance directive directory. Many of these forms combine the living will and medical power of attorney (discussed next).

Medical Power of Attorney

A medical power of attorney is similar to a living will, but instead of detailing your own specific medical care preferences this document assigns the power to someone else to make healthcare decisions on your behalf.  The person given the “power” in this document can make decisions regarding your medical treatment if you become incapacitated.

The key point here is that generally, the person you have assigned to make your decisions will only have this power if a physician certifies that you are incompetent.

You may think this is strictly for older people, however, there is the possibility for everyone of being in a severe accident where you are unable to make medical decisions on your behalf. When you are young, it is still appropriate to have a medical power of attorney, just as you should have life insurance to protect your loved ones in the case of your death.

Examples of times that you would need a medical power of attorney would be if you are in a coma, mentally unstable to make decisions for yourself (such as dementia in older people) or in a severe accident where you are unconscious.

The AARP’s advance directive directory mentioned above is a good start to creating your medical power of attorney. There are many other free templates, but be sure to use one that is specific to your state, since laws differ.

Financial Power of Attorney

A power of attorney gives another person the power (hence the name) to make financial decisions for you. This may sound scary, but you can modify the level of power they have on this form. For example, you can specify that they cannot change beneficiary designations on life insurance or retirement accounts.

Similar to a medical power of attorney, you can specify whether the form is effective immediately or will only be in effect if a physician deems you to be incapacitated. The power ends at the time of your death when the executor of your estate (specified in your will) would take over your affairs.

Some of the specific things that may be included in a financial power of attorney include:

  • Using your funds to pay day-to-day expenses
  • Helping you to invest and manage your money
  • Filing your taxes
  • Handling transactions with banks and financial institutions
  • Paying medical bills

Examples of times when you would use a financial power of attorney include when you need to conduct financial business while you are not present, and for elderly that are no longer able to make informed decisions.

To create a financial power of attorney, you simply need to fill out a form and sign it in front of a notary public (and in some states additional witnesses). A financial power of attorney form can be found for each state online or many financial institutions provide forms as well. There is a directory of power of attorney forms listed by state at PowerofAttorney.com.  Note that you will probably want the “Durable Power of Attorney”, which will allow for you to select whether you want the power of attorney to be effective immediately or only upon your incapacitation.

Revocable Living Trust

In some instances, it’s best to create a trust that will avoid probate altogether. A revocable living trust is not an essential estate planning document for everyone, but can be useful in some cases.

A will specifies how you want your assets allocated and appoints an executor, but the entire process is still subject to probate court to ensure that the process is followed, which ends up being public information. A properly created trust avoids probate court altogether and ensures privacy of your estate.

Creating a trust will allow you to streamline the process of transferring assets at your death. To create a revocable living trust, you actually transfer your assets to a separate entity, the trust. The trust document specifies the beneficiaries, those that will receive the trust benefits. Upon your death, your assigned trustee will manage your affairs according to the specifications in your trust document.

The “revocable” part of the trust means that you are able to make changes to the trust while you are still alive.

To create a trust, I would highly recommend that you consult with an attorney, although it is possible to create the documents yourself. It can be fairly expensive due to the legal fees involved (estimated around $2,000) to create a living trust, but keep in mind that by avoiding probate court it will end up being less expensive in the end than the upfront cost.

This article from The Balance explains some reasons that you may want to create a trust instead of a will.

There are many, many other types of trust that are helpful for estate planning, but they are beyond the scope of this class.

Additional Documents

In addition to the estate planning documents we’ve discussed, there are other documents that need to be updated for your estate plan. These include:

  • Retirement Account Beneficiary form – Be sure that you have included a beneficiary for your 401(k), IRA and any other retirement accounts that you own. The default by law is that the spouse receives 50% of the retirement account. Changing a beneficiary is as simple as filling out a new form, although additional documentation is often necessary if you are excluding your spouse from certain retirement or pension benefits.
  • Life Insurance Beneficiary form – Similar to retirement account beneficiaries, there is a standard precedence for the order in which life insurance will be inherited if no beneficiary is listed. However, if you’ve taken the time to set up a life insurance policy, you likely have a specific person (or persons) in mind that you want to support with the money. A simple form is required to designate or change a beneficiary.
  • Pay-On-Death beneficiary for bank and brokerage accounts – The person designated as the POD beneficiary will not have any access to funds while you’re still alive. The person also should not be a minor. To add a POD beneficiary, you have to go to the bank in person and bring your ID, account information and the details about the beneficiary including name, social security number, birth date and address. A pay-on-death beneficiary can also be named on a vehicle title. This designation will override what is stated on your will, so be sure that your POD beneficiaries are up to date.
  • Additional documents to help your family upon your death – An updated list of passwords, account information, personal advisors and other contacts should also be maintained as well. This way, your loved ones will be able to manage your final affairs with ease in a timely manner.

It should also be noted that any jointly held bank accounts do not need any additional beneficiary designation forms, as they will be the sole property of the joint owner upon your death.

Final Thoughts

Your estate plan should be reviewed annually, including the names of beneficiaries for all of your assets. In addition, any major life change should trigger a review and likely modifications to your estate plan. Some of these include:

  • marriage
  • divorce
  • birth of a child, or
  • a death

It’s important to think through your estate plan and beneficiaries, however, don’t let fear or uncertainty stop you from creating these extremely important documents. None of these are unchangeable and just like your overall financial plan, you can adjust and modify each one of these documents as your circumstances change.


Jim & Mary Smith are working to create these documents, as they currently do not have them in place (not even the last will & testament–they need to get on this!). They’ve added it to their financial goals to complete these within the next year.


Your homework assignment is to complete each estate planning document to ensure that your loved ones are taken care of upon your death and that your wishes will be carried out effectively.

  • IMPROVING – Fill out the forms using the suggested online resources.
  • INVESTED – Complete each of the required forms, consulting an attorney if needed for your will preparation.
  • UNSTOPPABLE – Meet with an estate planning attorney to discuss and implement each of the required estate plan documents, as well as other strategies to ensure that your wishes will be carried in the event of incapacity or death.

Do you already have these documents in place? If not, why not?


7 Responses

  1. This is definitely at the top of my list to do. Why I keep procrastinating is beyond me. I need to just buckle down and get this over with. Thanks for the great reminder!!!

  2. Many don’t realize the emotional cost of not leaving a will or an estate plan. Disputes seem to almost always arise if this isn’t done, especially among surviving family members, and it’s amazing how many people suddenly claim that the deceased Say they could have the silver and jewelry!

    Thanks for the article!

  3. Another great class, thank you Kathyrn!! Question: how do you organize *your* estate planning documents? Do you use a paperless/digital version similar to your digital financial binders?? I would love to know how you set it all up!

    1. Yes, I keep a scanned copy of all my estate documents in with my personal finance digital binder (they’re all just in one folder together). I have the original copies in a fireproof box.



I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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