What is an estate plan, and what does a basic one include?
An estate plan is the set of legal documents that decides what happens to your money, property, and dependents if you die or become unable to make decisions for yourself. Most people agree an estate plan matters, but relatively few — especially younger adults — actually have one in place. That gap usually comes down to not knowing where to start, not what to do.
Dying without a will (called dying “intestate”) means your estate moves through probate court, where state law — not your personal wishes — decides who inherits what and who raises any minor children. That process can take months or years, and it happens without any regard for your actual preferences. Dying with a will in place lets an executor you chose begin distributing your property according to your instructions, and lets you name guardians for your kids rather than leaving that decision to a judge.
This guide covers the basic building blocks of an estate plan and how they fit together.
What’s actually in an estate plan
An estate is simply the money and property you own — retirement accounts, real estate, personal property, life insurance, and anything else of value. What your plan needs to cover depends on your state’s laws, the size of your estate, and your family situation, but it should always address who inherits your assets, who cares for any dependents, and who makes medical and financial decisions on your behalf if you can’t.
There are four core documents that make up most estate plans:
- Last will and testament
- Power of attorney
- Health care directives
- Trusts (for more complex situations)
Guardianship nominations for minor children can be a standalone document or built directly into your will.
Part 1: Last will and testament
A will is the foundation of an estate plan — the document that carries most of your instructions for what happens to your property and, if you have kids, who raises them.
Wills can be simple or detailed, but even a basic one is far better than none at all. A handwritten, unwitnessed will (called a holographic will) is recognized in some states but not others, and any ambiguity in the wording can trigger a court dispute. For that reason, it’s worth having a will professionally drafted rather than writing one from scratch.
A solid will typically covers three things:
- An executor — the person responsible for carrying out your instructions: locating assets, filing the will in probate, notifying heirs, distributing property, and settling outstanding debts. No special expertise is required, though financial literacy helps. An executor only has the authority explicitly granted in the will.
- Beneficiaries and distribution — who receives what, spelled out as specifically as possible, since requirements vary by state. It’s also worth double-checking that the beneficiaries listed on accounts like life insurance and retirement plans match what’s written in your will, since those designations override the will if they conflict.
- Guardian nominations — who raises any minor children if something happens to you, plus who manages any assets left to them (a role called a conservator). Naming this yourself, in detail, is far better than leaving it to a court.
If your situation involves more complex wishes — conditional inheritances, specific timing of distributions, or anything outside a standard bequest — those instructions usually fall outside what a basic will can handle, which is where the other estate planning documents come in.
Part 2: Power of attorney (POA)
A power of attorney names someone (the agent) to act on your behalf (as the principal) for financial or legal matters — and unlike a will, it applies while you’re alive, not after death.
The version that matters most for estate planning is a durable power of attorney. Without one, a court would need to appoint a guardian or conservator to act for you if you become incapacitated. A durable POA stays in effect even after incapacitation; a “springing” POA only takes effect once a specific, clearly defined disability or incapacity occurs.
A financially focused POA can authorize your agent to handle legal matters, file taxes, manage retirement or insurance benefits, and enter contracts on your behalf. A medical POA authorizes someone to make health care decisions for you. Combined with a living will, a medical POA is often referred to as an advance health care directive.
Part 3: Health care directives
An advance health care directive is a legal document outlining your medical wishes if you become incapacitated. It typically includes a medical power of attorney, a living will, and a health care authorization.
A living will applies only before death and doesn’t distribute property — it dictates what medical treatment you do or don’t want if you’re seriously injured, terminally ill, or permanently unconscious. It can also include specific instructions like a do-not-resuscitate (DNR) order.
Without a living will, medical providers may be legally required to administer treatments regardless of what you would have wanted. Giving whoever holds your medical power of attorney access to this information in advance — rather than asking them to guess — makes an already difficult moment easier for your family.
A health care directive typically also includes a HIPAA authorization, which identifies who is allowed to access your protected health information. Whoever holds your medical power of attorney should have that access so they can make informed decisions on your behalf.
Part 4: Trusts
The three documents above cover most estate planning needs. A trust becomes useful for more complex situations or specific financial strategies. Trusts come in many forms, but every trust involves three roles: beneficiaries (who receive the benefit), a trustee (who oversees the trust), and a trustor or grantor (who creates and funds it). A trust can be revocable or irrevocable, each with different financial and legal implications.
Trusts can offer several advantages: property can transfer to heirs faster than through probate, the terms stay private rather than becoming part of the public probate record, distributions can be timed strategically, and inheritances can be made conditional — for example, releasing funds only once a beneficiary reaches a certain age or milestone.
Where to get help building your plan
Estate plans are traditionally built with an estate planning attorney, and for more complex situations — significant assets, blended families, or business ownership — that’s still the right call. An attorney can also help you navigate requirements that vary meaningfully by state.
For simpler situations, there are online services that can help you build foundational documents like a will or guardianship nomination at a lower cost than a traditional attorney. If your employer offers an employee assistance program (EAP), it’s also worth checking whether estate planning support is included as a benefit — many are and go unused.
Many financial planners also offer estate planning guidance, though in most states they aren’t licensed to prepare legal documents themselves — so a financial planner and an estate attorney often work best together, each covering the part of the plan they’re qualified to handle.
Moving forward with your estate plan
Estate planning sounds complicated, but you don’t have to build the whole thing at once. If you have children, start with a guardianship nomination — it’s the fastest, highest-impact document you can put in place. Add a basic will next. Then build out a power of attorney and health care directive. A trust can come later, once your financial situation calls for it.
Done well, an estate plan protects your wishes, reduces stress on the people you love, and prevents unnecessary conflict during an already difficult time. It’s a core part of any complete financial plan — right alongside your budget, your savings, and your insurance coverage.