Estate Planning Checklist: 5 Documents You Need

Greg Welborn
March 17, 2025
Estate Planning

With over $36 trillion in wealth expected to transfer from American retirees to their beneficiaries, it’s surprising that only 32% of Americans have an estate plan in place. Many avoid the process due to misconceptions such as not having enough assets, procrastination, or concerns about cost. However, creating an estate plan is essential for everyone, no matter your financial situation.

An estate plan is a powerful tool to ensure your assets are distributed according to your wishes, while also easing the emotional and financial burden on your loved ones. It can help avoid the complexities of probate, minimize family disputes, and preserve your legacy.

Whether you’re new to estate planning or updating an existing plan, following a clear checklist will help you organize your documents, make informed decisions, and work toward a smooth transition for your beneficiaries. From drafting wills and trusts to selecting key decision-makers and minimizing taxes, a comprehensive estate planning checklist will ensure you’ve covered all the necessary steps for long-term peace of mind.

Key Takeaways

Estate planning is more comprehensive than writing a will and can include one or more trusts, powers of attorney, and succession planning.
Maintaining an estate plan can reduce stress for your loved one, preserve your legacy, and avoid probate.
Financial advisors specializing in estate planning can provide strategic advice for navigating complex estates and save you significant legal costs.

Quick Summary: 5 Key Estate Planning Documents

Here are the 5 documents you must have in your estate planning:

Last Will and Testament: Specifies how your assets are distributed and allows you to name guardians for children or pets.
Power of Attorney: Gives someone authority to manage your finances if you can’t.
Healthcare Directives: Outlines your medical preferences and appoints a healthcare proxy.
Living Trust: Manages assets during your lifetime and avoids probate after death.
Beneficiary Designations: Directs financial accounts like retirement plans to your chosen heirs.

Why these Documents Matter:

Without a will: State laws decide who gets your assets, potentially causing disputes and delays.
Without a POA or healthcare directive: Loved ones may face court battles to make decisions on your behalf.
Without a trust: Your estate could face probate, which is time-consuming and costly.
Outdated beneficiaries: Could lead to assets going to the wrong person (e.g., an ex-spouse).

Quick Comparison Table:

Document	Purpose	Key Benefits
Will	Asset distribution after death	Avoids disputes and ensures your wishes
Power of Attorney	Financial decision-making during incapacity	Prevents costly court proceedings
Healthcare Directives	Medical decisions during incapacity	Ensures care aligns with your values
Living Trust	Asset management in life and death	Avoids probate and maintains privacy
Beneficiary Designations	Directs financial accounts to heirs	Simplifies asset distribution

Start by consulting an estate planning attorney to ensure your documents comply with state laws and reflect your current wishes. Regular reviews and updates are key to keeping your plan effective.

What Estate Planning Documents Do I Need?

Now that you have a general idea of what estate planning documents you need, let’s dive a bit deeper into the peculiarities and importance behind these documents.

1. Will: Your Basic Estate Plan

A will forms the foundation of your estate plan, laying out how the assets you own will be distributed after your death. Unfortunately, many Americans put off creating this essential document. A well-prepared will not only ensures your wishes are respected but also helps avoid family disagreements.

What to Include in Your Will

Executor Appointment
Choose someone reliable and financially savvy to serve as the executor. This person will handle tasks like collecting assets, paying off debts and taxes, distributing property, and representing your estate in court. On average, this process takes six to nine months to complete.
Asset Distribution Instructions
Clearly outline who gets what. Include details like special conditions, timing for distributions, and backup beneficiaries in case your primary choices cannot inherit.
Guardian Designations
If you have minor children or pets, name guardians for them in your will. Most wills include this crucial information to ensure your dependents are cared for by someone you trust.

Including these details in your will helps avoid the complication that come with dying without one.

What Happens Without a Will

If you pass away without a will (intestate), your state’s laws decide how the assets you own are divided. For instance, in Florida, if you’re married with children from a prior relationship, your spouse gets half of your estate, while the other half is divided among your children.

Issue	Impact
Asset Distribution	State laws dictate inheritance, potentially leaving out friends or charities.
Family Conflicts	Greater chance of disputes among relatives.
Time and Cost	Probate takes longer and incurs higher administrative fees.
Limited Control	You lose the ability to make specific bequests or create trusts.

Without a will, your assets might go to unintended heirs, creating unnecessary complications. Consult an estate planning attorney to draft a will that complies with state laws, safeguards your beneficiaries, reduces disputes, and simplifies the probate process.

2. Power of Attorney for Finances and Healthcare

A financial power of attorney (POA) grants someone the legal authority to handle your money and property if you’re unable to do so while you are still alive but are incapacitated. This document ensures your financial matters are managed by someone you trust, avoiding costly court proceedings during periods of incapacity.

A medical power of attorney grants someone the legal authority to make medical decisions for you, including end-of-life decisions. Even if your medical circumstances are not life-threatening, you still need someone to make any medical decision which you cannot make if you’re unconscious or under anesthesia.

Financial vs. Medical Powers

Although both types of POAs safeguard your interests, they serve different purposes:

Type	Covers	Common Uses
Financial POA	Bank accounts, investments, bills, property	Managing investments, paying bills, selling property
Medical POA	Healthcare decisions, treatment choices	Choosing doctors, approving procedures, accessing records

"A durable financial power of attorney can avoid financial disaster in the event you become incapacitated. You can also use a POA to allow someone to transact business for you if you are out of town or otherwise unavailable." – LegalZoom ^[1]

These differences highlight the importance of choosing the right financial agent. Most states require a witness and notarization. Requirements can vary by state, so it’s important to confirm the specifics where you live. Also, keep in mind that a financial POA ends upon your death, at which point your will takes effect.

How to Choose Your Representative

Pick someone who is:

Financially Skilled: They should be able to handle tasks like online banking, budgeting, and basic accounting while effectively communicating with attorneys and family members.
Emotionally Mature: Medical decisions can be very tough and emotionally draining. You should ask someone who you believe will be able to rise to the occasion and won’t “freeze” when making medical decisions.
Trustworthy: Since they’ll oversee key aspects of your assets and healthcare, select someone with unquestionable integrity who will prioritize your best interests.

Talk through responsibilities, limitations, and key details like where documents are stored and who to contact. To add safeguards, consider requiring regular accounting reports or setting limits on large transactions. Your agent is legally required to maintain accurate records and keep your assets separate from their own.

"A power of attorney arrangement can be important - even essential - to managing your financial affairs in the event you unexpectedly become unable to manage things on your own." – FINRA.org ^[2]

3. Healthcare Directives

Healthcare directives are legal documents that outline your medical preferences and guide healthcare providers and family members during critical moments. These directives work alongside your estate planning documents to ensure your medical care aligns with your personal values. They’re also companion pieces to your healthcare POA. The healthcare POA gives someone the authority to make decisions. The directives aid that person by indicating what your preferences are.

Medical Choices to Consider

When creating a healthcare directive, you’ll need to make decisions about key medical treatments. Here are some areas to think about:

Decision Type	What to Specify	Key Considerations
Life Support	Ventilation, feeding tubes, resuscitation	The specific conditions for these interventions
Pain Management	Comfort care preferences	Balancing pain relief with maintaining alertness
Organ Donation	Donation Preferences	Which organs or tissues you wish to donate

Studies show that without clear directives, family members often misjudge about one-third of their loved ones’ end-of-life preferences. Being detailed in your instructions can help ensure the care you receive matches your values.

It’s also important to select a healthcare proxy who knows your values well, stays calm under pressure, communicates effectively with medical teams, and can advocate for your decisions.

Meeting Your State’s Rules

Once you’ve outlined your medical preferences and chosen a proxy, make sure your directive complies with your state’s legal requirements.

Here’s how to ensure your healthcare directive is valid:

Obtain State-Specific Forms
You can find these forms through your State Attorney General’s Office, local agencies, or organizations like AARP.
Follow Local Requirements
Each state has its own rules for healthcare directives. These may include:
1. - Witness signatures
  - Notarization
  - Specific language requirements
  - Filing procedures

Keep in mind that states vary in how they handle out-of-state directives, so it’s best to maintain documents specific to your state.

Distribute copies of your healthcare directive to:

Your healthcare proxy
Your primary care doctor
Your local hospital
Close family members
Your attorney

4. Living Trust Basics

After addressing healthcare directives, it’s time to explore asset management through a living trust. A living trust helps protect your assets, keeps your financial matters private, and avoids the probate process. Unlike a will, which only takes effect after death, a living trust is active during your lifetime. This makes it an essential tool for managing and safeguarding your legacy.

Trust vs. Will: Key Differences

Feature	Living Trust	Will
Effective Period	During lifetime and after death	After death only
Probate Process	Avoids probate	May require probate
Privacy	Stays private	Becomes public
Asset Control	Faster distribution	May take 1-2 years

"The primary advantage of a revocable trust is to avoid probate... the probate process is something that can be long and costly, and so by having a revocable trust, you can avoid the probate process in its entirety." – ACTEC ^[3]

To gain these advantages, you’ll need to transfer your assets into the trust. This ensures privacy, speeds up distribution, avoids court involvement, and simplifies asset management.

Picking Your Trustee

Choosing the right trustee is critical to making a living trust work effectively. Here are two common options:

Individual Trustee: Often a family member. They bring a personal connection but may lack the expertise to handle complex estates.
Corporate Trustee: Professional trustees, like banks or trust companies, provide investment knowledge, regulatory expertise, impartiality, continuous availability, and professional record-keeping.

When selecting a trustee, look for someone with:

Good judgement and integrity
Financial knowledge
Strong communication skills
Reliable record-keeping abilities
The time and willingness to take on the role

The right trustee ensures your trust operates smoothly and fulfills its purpose.

5. Account Beneficiaries

It’s important to name beneficiaries on your financial accounts since these designations take precedence over instructions in your will. This step is a key part of your estate planning process.

Where to Name Beneficiaries

Certain types of financial accounts allow you to directly name beneficiaries. Here’s a quick overview:

Account Type	Key Points to Consider	How to Update
Life Insurance	Name both primary and contingent beneficiaries	Contact you insurer directly
Retirement Accounts - IRAs, 401(k)s	Be aware of tax rules for beneficiaries	Prevents costly court proceedings
Bank Accounts	Many offer Transfer on Death (TOD) options	Update online or at a local branch
Investment Accounts	Beneficiary designations can help avoid probate	Submit forms through your brokerage

"Make the proper beneficiary designation adjustments when warranted and review these annually with your adviser to ensure they remain up-to-date and make financial sense given your current situation." – Jeff Witz, CFP® ^[4]

Regularly review these designations to ensure they match your current circumstances.

When to Update Names

Major life events often require updates to your beneficiary designations. Neglecting this step can lead to unintended outcomes. For example, Gary Vassil from Pennsylvania passed away in 2016, leaving 83% of his federal life insurance benefits to his ex-wife because he never updated his beneficiary form after their 2003 divorce.

Key moments to review and update your designations include:

Marriage or Divorce: Update all accounts immediately after these events.
Birth or Adoption: Add children or grandchildren as beneficiaries when appropriate.
Death or a Beneficiary: assign a new beneficiary to ensure proper asset distribution.
Annual Review: Even without major life changes, check your designations yearly.

In California, probate can take 9–18 months. Proper beneficiary designations can help you avoid this lengthy process. When making updates, always request written confirmation and store copies with your estate planning documents.

For retirement accounts, aim to review your beneficiary designations every 3-5 years. This process is quick and often can be completed online through your plan administrator.

Next Steps

Now that you’re familiar with the key estate planning documents, it’s time to act. Estate planning isn’t something you do once and forget – it needs consistent reviews and updates to stay relevant and legally sound.

"We believe that every client is unique. We want to take the time to get to know your concerns, goals, and dreams. Our fiduciary financial advisors don't try to make one size fit all; we take the time to learn about who you are, what you need, and whether we can help you with your retirement planning needs as a retirement financial advisor. Successful planning begins with a conversation." – Scott Sommers, Principal, First Financial Consulting

Estate planning is essential to providing peace of mind and ensuring your loved ones are taken care of. Because of the complexities of both the estate tax laws and the financial assets most affluent or high-net-worth individuals have, working with a team that includes an estate attorney and a skilled financial advisor generally gives you the best outcome. This estate planning checklist should only serve as a guide.

Successful estate plans reflect both the tax laws and the unique composition of your specific assets, earnings, and cash flow, as well as your specific goals for how your legacy is to be preserved, managed, and protected.

At First Financial, our team of fiduciary advisors has helped clients develop and manage successful financial and estate plans for over 45 years. We’ve helped our clients avoid common estate planning mistakes and we understand the importance of protecting your loved ones financially and emotionally during your passing, and we know that proper estate planning can help.

Schedule your complimentary consultation today and learn more about the estate planning process.

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Meet Greg Welborn

Greg Welborn is a Principal at First Financial Consulting. He has more than 35 years’ experience in providing 100% objective advice, always focusing on the client’s best interests.

Meet Greg Welborn

Greg Welborn is a Principal at First Financial Consulting. He has more than 35 years’ experience in providing 100% objective advice, always focusing on the client’s best interests.

FAQs | Estate Planning Checklist and Documents

What is estate planning?

Estate planning is the process of organizing your assets and outlining your wishes for how they will be managed, distributed, or preserved in the event of your death or incapacitation. It includes documents like wills, trusts, and powers of attorney.

Why is estate planning important?

Estate planning ensures your loved ones are cared for, helps avoid the cost and delays of probate, minimizes taxes, and reduces the financial and emotional burden on your family during difficult times.

What should I include in my estate planning checklist?

An estate planning checklist helps ensure all key elements are covered. Here’s what to include:

Asset Inventory: List all your physical assets and digital assets, such as real estate, investment accounts, personal property, bank accounts, and retirement plans.
Beneficiaries: Identify primary and contingent beneficiaries for all financial accounts and policies to ensure assets are distributed according to your wishes.
Key Estate Planning Documents: Draft essential legal documents, including a will, one or more trusts, and powers of attorney for healthcare and financial decisions. You also need important financial information, like bank and other financial accounts, insurance policies, credit card info, and mortgage documents.
Decision-Makers: Appoint trusted individuals as your executor, trustee(s), and powers of attorney to carry out your wishes and manage your affairs.
Plan Updates: Review and update your estate plan periodically - at least every 2 - 3 years or after significant life changes - to keep it current and effective.

What is the difference between a will and a trust?

A will and a trust serve different purposes in estate planning. A will outlines how your assets will be distributed after your death, names an executor, and can appoint guardians for minor children. However, it only takes effect after your death and must go through probate, which can be time-consuming, costly, and public.

A trust, on the other hand, allows you to manage and distribute assets during your lifetime or after your death, bypassing probate. It offers greater privacy, flexibility, and control over how and when your assets are distributed. Trusts can also help minimize estate taxes and protect assets from creditors.

Most comprehensive estate plans use both a will and one or more trusts to ensure a smooth transfer of assets while addressing specific needs. Consulting with an estate planning professional can help you decide which is right for you.

How often should I update my estate plan?

It’s recommended to review your estate plan every 2–3 years or after significant life events such as marriage, divorce, the birth of a child, or changes in tax laws.

What is probate, and why should I try to avoid it?

Probate is the legal process of validating a will and distributing assets under court supervision. It can be time-consuming, expensive, and public. Proper estate planning, such as using trusts, can help avoid probate.

What should I consider when choosing an executor or trustee?

When choosing an executor or trustee, pick someone who is trustworthy, organized, and capable of managing financial and legal responsibilities. For more complex estates, consider appointing co-trustees, including a professional fiduciary.

How can I minimize estate taxes?

Minimizing estate taxes involves strategic planning to reduce the taxable value of your estate. Common strategies include making lifetime gifts to beneficiaries, establishing trusts like irrevocable life insurance trusts, and utilizing spousal exemptions or charitable giving. These methods can significantly lower the estate tax burden while preserving your legacy. Consulting a financial advisor or estate planning attorney ensures these strategies are tailored to your specific needs and compliant with current laws.

Do business owners need special estate planning?

Yes, business owners should include succession planning, business valuations, and buy-sell agreements in their estate plans. These ensure a smooth transfer of ownership and management after their passing.

Greg Welborn

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