12 Easy Steps To Start Your Estate Plan

Are you ready to plan your estate? This is one of the most important things you can do to make sure your loved ones have the financial security they need when you are no longer there to care for them.  Just follow these 12 Easy Steps To Start Your Estate Plan, and you will be that much closer to setting up an Estate Plan then you were 20 mins before reading this. 


If you’re feeling a bit intimidated by the idea of estate planning, this simple estate planning guide will help. Here are the 12 easy steps you can take to plan your estate in a straightforward “estate planning for dummies” layout.

If you are looking for more information about what an Estate Plan is, check out our Estate Plan page Here

#1. Create a Will

The first step in estate planning is creating a will. This basic legal document states who will inherit which assets and it names a guardian who will care for minor children if something happens to you.


A will can be as simple or complicated as you like. To create an effective will that accomplishes what you want and protects your assets and loved ones, follow these simple will planning tips.

  • Name your beneficiaries. Identify the beneficiaries who will receive your assets and make sure it stays updated if anything changes in your life such as the birth of a new child, marriage, or divorce.
  • Choose an executor who will make sure your will is carried out.
  • Name a guardian for minor children. You may want to name a primary guardian and alternate guardians if your first choice does not want to take on the role or is unable.
  • Be specific. Your will should not be vague or it can actually do more harm than good. Talk to your loved ones ahead of time to ask them what they would like to receive and determine how you will divide your estate in a way that makes sense. This can avoid strife and hurt feelings later. 


Your will should be reviewed and updated regularly, especially after major life events. 

#2. Consider Starting a Trust

Not everyone needs a trust, but it’s a good idea to determine if a trust will benefit your estate. Property held in a living trust does not go through the time-consuming and costly probate process. 


A trust isn’t just an option for the wealthy, although creating and administering a trust does come with some costs. Your estate planning attorney can help you determine if creating a trust makes sense after reviewing your unique situation and your wishes. 


To demonstrate how useful a trust can be, imagine what would happen if you are remarried with children (and possibly stepchildren) and pass away first. If you and your spouse will have different beneficiaries such as children from previous marriages, a trust can ensure your estate goes to your beneficiaries and skips the probate process. This means you can avoid accidentally disinheriting your children if your assets automatically go to your spouse who may eventually pass them to their own children.

#3. Create a Health Care Directive

What happens if you become incapacitated and cannot make medical decisions for yourself? A health care directive can be used to inform your loved ones and physicians of your health care wishes. A health care directive includes a health care directive and a power of attorney for health care which is used to name someone to make health care decisions when you cannot.


This directive can be as general or specific as you like. Here are just some of the things you may want to include: 

  • Who you want to appoint as your agent to make decisions if you can’t. You can also name alternative agents. 
  • Your health care values and preferences.
  • Where you prefer to receive care. 
  • The types of treatments you do or do not want. For example, you may not want to be put on a ventilator or receive blood transfusions.
  • Instructions about hydration and nutrition (tube feeding).
  • What to do if you are pregnant and incapacitated. 
  • Whether you want to be an organ donor.
  • Who you want to act as a conservator or guardian in the event of a court order.


After creating a health care directive, make sure you inform your family members, health care agent, and health care providers about the document and give them a copy. 

#4. Create a Financial Power of Attorney

The next step is creating a financial power of attorney. This document gives someone you trust the authority to handle your property and finances if you are incapacitated and unable to do it yourself. 


You can choose to give the agent you name as much or little power as you like. The agent must act in your best interests and may need to perform a range of financial tasks on your behalf such as: 

  • Managing real estate
  • Paying bills, taxes, and medical expenses
  • Collecting your retirement benefits
  • Transferring or selling assets
  • Operating your business
  • Hiring professionals to represent you
  • Accessing your financial accounts

#5. File Beneficiary Forms

Beneficiary forms are one of the estate planning basics you shouldn’t overlook. One of the easiest but most crucial steps of estate planning is making sure you have beneficiary forms on file for retirement, investment, and bank accounts. When you name a beneficiary for these accounts, the accounts become immediately and automatically “payable on death” to your chosen beneficiary and the accounts will bypass probate. 


With beneficiary forms on file, you do not need to name these assets in your will. 


Note: beneficiary forms always supersede what you state in your will. That’s why it’s very important to keep these forms up-to-date. As an example, assume you name a spouse as the beneficiary on your bank account but later get divorced. You remarry and name your new spouse in your will as the beneficiary for your bank account. If you fail to update the beneficiary form with your bank, your ex-spouse will receive the money in the account, not your current spouse.

#6. Protect Your Children’s Inheritance

If you have minor children, make a plan for their inheritance to protect their property in case you pass away before they reach adulthood. It’s a good idea to name a trusted adult who can manage their inheritance until they are old enough. 


Without a plan in place, the probate court will appoint someone to serve as your children’s property guardian. The court-appointed guardian will be required to make reports to the court with limited authority on how the inheritance can be managed. 


If your children are adults when they inherit money or property from you, they will have complete control of the assets unless you specify otherwise in a trust or will. 

#7. Plan for Estate Taxes

The vast majority of estates are not large enough to owe federal estate taxes which are only triggered on estates valued at $5.49 million or more. If you believe that estate taxes are a concern, it’s very important to work with an estate planning attorney to plan your estate. Your attorney can discuss tax avoidance techniques to eliminate or reduce this burden on your beneficiaries.

#8. Consider a Life Insurance Policy

A life insurance policy can be a valuable component of estate planning, especially if you own a home, have young children, or owe a significant amount in debt. Life insurance proceeds pass directly to named beneficiaries and skip probate to give your loved ones the means of paying off debt, paying for college, or paying living expenses without your income. 

#9. Plan for Funeral Costs

There are three primary ways to pay for your funeral expenses: a funeral prepayment plan, a payable-on-death bank account, or a life insurance policy. A funeral prepayment plan allows you to lock in the cost of a funeral but it comes with issues. You may be locked into a particular location or funeral provider who may go out of business. A life insurance policy is a better option as a small policy that provides enough to cover your funeral expenses can be very affordable. 


Some people simply choose to set aside money in a payable-on-death bank account for the sole purpose of paying for final expenses. 

#10. Make Your Final Arrangements

After planning for the cost of your funeral, make sure your final wishes are known in terms of organ or body donation and body disposition. Do you want to be buried or cremated? Do you want a memorial service? 


A will is not the best place to express your preferences for death and burial as it may not be found until weeks after you have died. You can use a health care directive to express your preferences for final arrangements or write a letter to your executor and family members that can be included with your other important estate planning documents. 

#11. Create a Business Succession Plan

If you have a business, you should have a succession plan to prevent your business from dying with you. If you own a business with others, there should be a buyout agreement that makes a buyout plan if one partner leaves the business or dies. 

#12. Store Documents Properly

The last step? Make sure all of your estate planning documents are somewhere accessible and important people know where they are located. Your attorney and the person you appoint to administer your estate when you die should be able to access all of the documents they need to find and administer your assets and carry out your final wishes. 


Use this estate planning documents checklist to prepare a folder that will help your loved ones when the time comes. 


  • Will
  • Trust documents
  • Insurance policy information
  • Deeds for real estate
  • Certificates for bonds, stocks, and annuities or an investment account statement
  • Bank information, including a bank statement and safe deposit box information
  • Retirement information, including statements for IRAs, 401(k)s, and other retirement plans
  • Debt information, including statements or information on loans, credit cards, utilities, and taxes
  • Funeral information, including any prepayment plans and instructions for final arrangements

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