The core four documents (every adult)
- Last will and testament: names guardians for minor kids, an executor, and who gets your probate assets. Without one, your state decides — via a formula that may not match your wishes at all.
- Durable financial power of attorney: lets someone you trust pay bills, manage accounts, and handle money if you're incapacitated. "Durable" means it survives incapacity — that's the whole point.
- Healthcare power of attorney / proxy: names who makes medical decisions if you can't.
- Living will / advance directive: your wishes on life support, resuscitation, organ donation. Spares your family agonizing guesses.
Will vs revocable living trust
| Will | Revocable living trust | |
|---|---|---|
| Cost | $300–1,000 (attorney) | $1,500–4,000+ (attorney) |
| Probate | Required — public, months-long | Avoided for funded assets — private, faster |
| Incapacity | Does nothing until death | Successor trustee manages assets seamlessly |
| Privacy | Public record | Private |
| Effort | Sign and done | Must retitle assets into the trust or it's useless |
Rule of thumb: a will suffices for simple situations. Consider a trust if you own real estate (especially in multiple states), have minor kids (a trust can hold and manage their inheritance until they're mature — 25, 30, staggered), want privacy, or live in a state with slow/expensive probate (looking at you, California).
A trust does not avoid estate taxes by itself — revocable trust assets are still in your taxable estate. Tax-focused irrevocable trusts are a separate, advanced tool.
Kids: the guardianship conversation
- Name a guardian (raises them) and ideally a separate financial trustee (manages money) — the best caregiver isn't always the best money manager.
- Name backups. Talk to the people first — a surprise guardianship is a burden, not an honor.
- Leave a letter of intent: values, schooling wishes, medical notes, where the money is. Not legally binding, but invaluable.
- Never leave large sums outright to minors — courts will appoint a stranger to manage it until 18, then hand your teenager a lump sum. A trust with staggered distributions (⅓ at 25, ⅓ at 30, ⅓ at 35) is the standard fix.
Beneficiaries beat wills — check them
Beneficiary designations on 401(k)s, IRAs, life insurance, and payable-on-death accounts override your will. The #1 estate-planning disaster is an ex-spouse still listed on a 401(k) from 15 years ago.
- Review every beneficiary after marriage, divorce, births, and deaths
- Name contingent beneficiaries (the backup if the primary dies first)
- For minor kids: name the trust as beneficiary, not the child directly
- Keep a one-page "where everything is" list with your will (accounts, advisors, passwords location — not the passwords themselves)
Estate & gift taxes in 2026
Translation: fewer than 0.1% of estates owe federal estate tax. But two things still matter for everyone:
- State estate taxes: about a dozen states (plus DC) tax estates at much lower thresholds — some around $1–7M. If you live in one, plan for it even if federal tax is irrelevant.
- Step-up in basis: heirs generally inherit appreciated assets (stock, real estate) at current market value — wiping out the capital-gains tax. This is why "don't sell, let heirs inherit" is often the right move for highly appreciated assets.
For large estates: lifetime gifting moves future appreciation out of the estate; portability lets a surviving spouse use the deceased spouse's unused exemption (but requires filing an estate tax return to claim it); irrevocable trusts (SLATs, GRATs, ILITs) are advanced tools — get a real estate attorney, not a website.
Source: Morgan Lewis summary of the $15M permanent exemption
Probate, simplified
Probate is the court process of validating your will and distributing assets. It takes 6–18 months, costs 3–7% of the estate in some states, and it's public. Assets that skip probate: anything with a beneficiary designation, jointly owned property with survivorship rights, and assets titled in a living trust. That's why the beneficiary check above matters more than most people realize.
Special situations
- Blended families: "everything to my spouse" can accidentally disinherit your kids. A trust with a lifetime income interest for the spouse + remainder to kids is the standard solution.
- Special-needs child: a special needs trust provides for them without disqualifying means-tested benefits (Medicaid, SSI). Never leave assets outright.
- Digital assets: list crypto wallets, seed phrases (stored securely, separately), and online accounts. Most states now have digital-asset access laws — name a digital executor.
- Business owners: a buy-sell agreement + succession plan is your business's will. Without it, your family inherits a company they can't run. See Business Owners.
- Unmarried partners: you have zero default rights — no intestate inheritance, no medical decision-making. Documents aren't optional here.
What it costs (and when to DIY)
- Simple will + POAs: $300–1,000 with an attorney; reputable online services run $100–300 and beat having nothing.
- Living trust package: $1,500–4,000+.
- Complex/taxable estates: $5,000–15,000+ — money well spent at 40% tax rates.
- Review every 3–5 years and after every major life event. An outdated plan can be worse than none (see: ex-spouse beneficiaries).
FAQs
Do I really need a trust?
Not necessarily. If your assets are modest, beneficiaries are current, and your state has simple probate, a solid will + POAs + correct beneficiaries covers ~90% of needs. Get a trust when you have minor kids, real estate in multiple states, privacy concerns, or a taxable estate.
Can I write my own will?
Holographic (handwritten) wills are valid in about half the states but are the most contested documents in probate. A $200 online will executed correctly (witnesses, notarization per your state) beats a handwritten one. For anything beyond simple, hire the attorney.
What happens to my 401(k) when I die?
It goes to your named beneficiary — not through your will. Spouses can roll it into their own IRA; non-spouse beneficiaries generally must empty inherited IRAs within 10 years (SECURE Act). Keep beneficiaries current.
How do I pick an executor/trustee?
Choose organization and integrity over proximity: a responsible sibling beats a nearby flaky one. Name a backup. For complex estates, a professional trustee (bank/trust company) is worth the ~1% fee. Tell them where the documents are.