Estate Planning Basics: What You Need (Even If You're Not Rich)

More than 60% of Americans don't have a will. Many assume estate planning is only for the wealthy. It's not. If you have a bank account, a car, a home, or children — you need at least a basic estate plan. Without one, your state's default laws decide where your assets go and who raises your kids.

What Is Estate Planning?

Estate planning is the process of deciding what happens to your assets, your healthcare decisions, and your dependents when you die or become incapacitated. A complete estate plan typically includes: a will, beneficiary designations, a durable power of attorney, and a healthcare directive. Some people also need a trust.

The Will: Your Most Basic Document

A will specifies who receives your assets when you die and, critically, who becomes guardian of your minor children. Without a will, your state decides through a process called intestate succession — and the state's decision may not match your wishes. Courts also decide on guardianship, which can lead to family conflicts and a prolonged legal process.

Cost: A basic will through LegalZoom or Trust & Will costs $100–$200. An attorney-drafted will costs $300–$1,000. For complex situations, an estate attorney is worth it.

Beneficiary Designations: More Important Than Your Will

Here's what most people don't realize: beneficiary designations on retirement accounts (401k, IRA), life insurance policies, and some bank accounts override your will completely. If your will says 'leave everything to my spouse' but your IRA still lists your ex-spouse as beneficiary, your ex gets the IRA. Update beneficiary designations every time your family situation changes.

Durable Power of Attorney

A durable power of attorney designates someone to make financial decisions on your behalf if you're incapacitated — paying bills, managing investments, handling taxes. Without one, your family may need to go to court to get a conservatorship, which is expensive and time-consuming.

Healthcare Directive (Living Will)

A healthcare directive specifies your wishes for medical treatment if you can't communicate — whether you want life support, resuscitation, and under what circumstances. It also designates a healthcare proxy (someone who makes medical decisions for you). Without this document, medical decisions fall to family members who may disagree.

Do You Need a Trust?

A revocable living trust holds your assets and bypasses probate (the court process of distributing your estate, which is public, slow, and expensive). Trusts make sense if: you own real estate, you have children from a prior marriage, your estate is large, or you want to control how assets are distributed to heirs over time. For most people with modest estates, a simple will plus beneficiary updates is enough.

Estate Planning Checklist

• Draft a will (essential if you have children or any assets)
• Update all beneficiary designations on retirement accounts and life insurance
• Create a durable power of attorney
• Create a healthcare directive
• Store documents somewhere your family can find them (not just on your computer)
• Review everything every 3–5 years or after major life events (marriage, divorce, birth, death)