Estate Planning Basics: Get Started Today

Estate planning may seem daunting, but it really doesn't have to be. The hardest part is often just overcoming the mental hurdle to start. Planning for the future is a smart and caring thing to do. Formulating your estate planning basics brings peace of mind and reduces any anxieties you may have about what lies ahead.

The basics of estate planning is to ensure your wishes are followed when you're no longer around. Plus, you don't have to be super wealthy to benefit. Estate planning benefits anyone who wants to make life easier for their family and friends after they're gone.

It's like your way of saying, “Hey, I've got your back even when I'm not here.” Creating an estate plan shows how much you care about the people and things that matter most to you. Now let's start!

What Is An Estate Plan?

Let's make sure you're comfortable with the definition of an estate plan before we get into all the fundamentals. Think of estate planning as creating a roadmap for your belongings, properties, medical needs, even your memories.

It's more than just deciding on a will vs trust, which by the way aren't mutually exclusive. An estate plan provides clear written directions on what to do with all of your physical belongings, money, and accounts after you pass away or if you become seriously incapacitated. These directions are put together in a set of documents. Then, these documents can be entrusted to a close friend, family member, or a lawyer.

Formalizing your estate planning basics is a thoughtful and explicit way to ensure that your wishes are clear. In addition, it's a legal way to protect your loved ones so they can be taken care of according to your preferences. Estate planning isn't just about money and property. It also encompasses matters like healthcare and guardianship for your dependents.

It's a way to provide a clear roadmap for your loved ones during a time that might otherwise be confusing and stressful.

Related reading: Estate Planning Terminology You Should Know

Who Needs An Estate Plan?

Estate planning is beneficial for a wide range of individuals, regardless of age, wealth, or family structure. Here's a breakdown of who can benefit from an estate plan:

  1. Parents with Minor Children: If you have children under 18, you can name temporary and permanent guardians who will care for them if you're no longer able to. You can also ensure that your assets are used for their benefit. See: The Right Amount of Money to Leave Your Children
  2. Property Owners: If you own property, having an estate plan can help dictate the transfer of your property to your beneficiaries. Estate planning basics can also minimize taxes and the legal processes involved.
  3. Married Couples: An estate plan can help married couples pass on assets to each other, their children, and any additional beneficiaries in the most tax-efficient manner.
  4. Single Individuals: Even if you're single, you may still have assets that you want to leave to specific individuals, charities, or causes.
  5. Business Owners: If you own a business, an estate plan can address the management and transition of your business when you pass. It can also ensure the financial stability of your family and employees.
  6. High Net Worth Individuals: While estate taxes may not be a concern for everyone, those with significant wealth may want to use estate planning strategies to minimize taxes and protect their assets for future generations.
  7. Individuals with Health Concerns: A comprehensive estate plan includes documents like a healthcare directive and a power of attorney. This can be crucial if you become unable to make decisions about your medical care or finances.

Related reading: How Do Millionaires And Billioniares Avoid Estate Taxes?

When To Start Your Estate Planning Basics

Estate Planning Basics

You should putting together your estate planning basics as soon as you begin to accumulate assets or experience a major life change. Examples include marriage, having a baby, acquiring valuable assets, or if you receive a serious medical diagnosis.

It's good to start in early adulthood, between your 20s and 30s, and then update regularly as your life evolves. This might happen when you start your first job, rent your first apartment, or buy your first property.

Too often, people delay estate planning until they are into their 60s or 70s. Or worse, they never get around to it at all until it's too late leaving their loved ones in a very difficult and unclear situation.

Marriage or Partnership

When you marry or enter into a long-term partnership, your financial situation and responsibilities often change. This is a good time to create an estate plan that reflects your joint goals. Plus, estate planning basics ensure your spouse or partner is provided for if something happens to you.


Becoming a parent is a significant life event that prompts many people to create an estate plan. Ensure your children are taken care of by naming guardians and making provisions for their financial well-being.

It can also be very beneficial to name both temporary and long-term guardians. If your long-term guardian(s) live live out of state or are more than a few hours away, local temporary guardians can care for your children, instead of child services, until your long-distance guardian arrives.

Healthcare Concerns

If you have specific wishes about medical treatments, create an estate plan that includes a healthcare directive.This document outlines your preferences for medical care if you're unable to communicate your wishes.

Growing Wealth or Assets

As your wealth grows, your estate plan can naturally become more complex. This is especially true if you own multiple properties, have investments, or own a business. You can work with an estate attorney or a tax accountant to put together plans to minimize taxes and ensure a smooth transfer of your assets. See: 5 Reasons to Include Annuities In Your Estate Plan

Retirement Plan

When you're approaching retirement, it's a good time to revisit your estate plan. You may need to make adjustments to account for changes in your financial situation and your post-retirement goals

What Happens If You Don't Have An Estate Plan?

Without an estate plan, your assets may be distributed according to your state's laws of intestacy, which might not align with your wishes. This can lead to unintended beneficiaries receiving your assets.

If you have minor children, the court may also decide their guardianship without your input. This might not align with your preference for their care and upbringing.

In essence, not having an estate plan can lead to confusion, family conflicts, legal complexities, and unintended outcomes. Creating an estate plan provides peace of mind that your wishes will be respected. And it can equip your beneficiaries according to your intentions.

Estate Planning Basics Checklist

Think of an estate planning basics checklist as your trusty guide to make sure everything's in order for the future. It's like having a to-do list for the stuff that really matters.

  1. Gather Information:
    • List of assets (property, investments, bank accounts, retirement accounts, insurance policies)
    • List of debts (mortgages, loans, credit card balances)
    • Create a Schedule of Assets and keep it updated throughout your life
  2. Set Goals:
    • Determine who you want to inherit your assets
    • Decide on guardians for minor children, if applicable
  3. Consider Trusts:
    • Determine if forming a living trust is appropriate for your situation
    • Establish a revocable living trust, irrevocable, GRAT, SLAT, or others to manage assets and avoid probate
  4. Plan for Healthcare:
    • Create a healthcare directive (living will) outlining your medical preferences
  5. Choose Financial Decision Makers:
    • Create a durable power of attorney to designate someone to manage your financial affairs if you become incapacitated
  6. Review Beneficiary Designations:
    • Ensure that beneficiary designations on retirement accounts and life insurance policies are up to date
  7. Plan for Digital Assets:
    • Document online accounts, passwords, and instructions for handling digital assets
  8. Sign, notarize, store, and inform:
    • Typically, notarizing your estate plan documents is necessary for them to officially become legal documents.
    • Lastly, inform the beneficiaries and guardian(s) that your documents are final and provide copies.
    • Put your documents in a secure location and ensure any trustees, beneficiaries, and guardians know where they are.

Congrats! You've learned how to put together your estate planning basics and are ready to get started.

How Much Does It Cost To Hire Someone vs DIY?

The cost of estate planning can vary based on factors like complexity, your location, and the professionals you choose to work with. Hiring an estate attorney typically costs between $1,000 and $3,000 or upwards to $5,000+ for very complex plans. It's not required to pay someone, however, and many people choose to put together their estate planning basics by themselves.

Here's a general comparison between hiring professionals and the DIY approach:

Hiring Professionals

If you hire an attorney, costs can range from a multiple hundreds into the thousands, depending on the complexity of your estate and the services you need. More complex estates, trusts, and specific legal advice generally lead to higher costs over $3,000 per person/couple.

A financial professional can assist in coordinating your financial goals with your estate plan. Fees can vary, often being hourly or based on a percentage of assets under management. Although the costs may seem high upfront, they can help ensure all the paperwork is filled out correctly, save you time, and help save on tax costs down the road.

Related reading: Three Things I Learned From My Estate Attorney


There are many online platforms that offer basic estate planning documents, such as wills and health care directives. The costs are relatively lower, often ranging from around $100 to a few hundred dollars.

You can also find templates and guides in books or online resources that you can follow to draft your own documents. However, this method might be riskier if you're not familiar with the legal requirements in your state and local area.

It's important to note that while DIY options may seem cost-effective upfront, they might not account for potential legal intricacies or individual circumstances. Thus, it opens to the door for potential mistakes that could be costly to fix down the line. Hiring professionals offers expertise, customized advice, and legal assurance.

Get Started On Your Estate Planning Basics Today

Today you learned what an estate plan is, who needs one, when to start, how much it typically costs, and what happens if you don’t have one. Plus, you are now ready to start with a clear estate planning basics checklist that’s easy to follow from start to finish.

Helpful tip – once you’ve got all of your documents in order, be sure to regularly keep them updated.

Ultimately, estate planning is all about making things easier for your loved ones and ensuring your wishes are respected. It might still feel a bit overwhelming. But, remind yourself that taking it step by step makes it manageable. By planning ahead, you're showing that you care about the wellbeing of your loved ones today and well into the future.

Here are some additional articles related to estate planning for further reading.

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This estate planning basics guide is a original article. Thanks for reading!

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