A well-rounded estate plan often includes more than a will. Depending on your circumstances, it may include a financial power of attorney, advance healthcare directives, beneficiary designations, and, when appropriate, a trust.
Many people create a will and assume their estate planning checklist is finished. At Life & Legacy Counselors, this is one of the most common gaps we see when reviewing an older estate plan for families across Maryland, DC, and Virginia. Here’s what’s usually missing, and why each piece matters.
Start Here: What Is Estate Planning, Actually
If you’re not sure what estate planning covers in the first place, our guide to what estate planning actually means is a good place to start before this checklist. It walks through the basics without the legal jargon.
The Will Everyone Has (or Thinks They Have)
A will is an important part of an estate plan, but it does more than simply say who receives your property. A will can direct how probate assets should be distributed, name the person you want to administer your estate, and nominate a guardian for minor children, subject to applicable law and court approval. What a will generally does not do is give someone authority to manage your financial affairs or make healthcare decisions for you while you are alive and unable to act for yourself. That is where other estate planning documents become important.
The Financial Power of Attorney
A financial power of attorney allows you to authorize someone you trust to handle specified financial and property matters on your behalf. Depending on how the document is written and the law that applies, that authority may begin immediately or under specified circumstances. A durable power of attorney can continue to operate if you later become incapacitated.
Without appropriate financial planning documents in place, family members may have limited authority to manage accounts or property held solely in your name. Depending on the circumstances, they may need to use another legal alternative or seek court appointment to obtain authority over certain financial matters.
Some people assume their spouse can automatically step in if something happens. That’s not always true, especially for accounts held only in your name.
Advance Healthcare Directives
Healthcare planning can include instructions about the medical care you would or would not want and the appointment of someone you trust to make healthcare decisions if you cannot make or communicate those decisions yourself. The exact terminology and structure of these documents differ by jurisdiction.
Depending on where you live, your healthcare planning may address:
- Healthcare treatment instructions or a living will: documents your preferences regarding future medical treatment, including certain life-sustaining and end-of-life care decisions.
- Appointment of a healthcare agent: identifies the person you want to make healthcare decisions on your behalf if you cannot make or communicate them yourself.
These instructions and appointments may appear in one advance directive or in separate documents, depending on the jurisdiction and how the estate plan is prepared. The National Institute on Aging’s page on advance directives is a good place to see how this typically works in practice.
Without your own healthcare instructions or appointed agent in place, healthcare decisions may instead be governed by the surrogate decision-making rules that apply in your jurisdiction. That can leave loved ones making difficult decisions without clear guidance about your preferences.
Beneficiary Designations: An Often-Overlooked Part of the Plan
Here’s something that surprises a lot of clients: your will doesn’t control everything. Many assets, including life insurance policies, retirement accounts, and accounts with valid payable-on-death or beneficiary designations, can pass directly to the named beneficiary rather than through your will.
For assets governed by a valid beneficiary designation, that designation will generally control who receives that particular asset rather than instructions in your will. That is why beneficiary designations should be reviewed alongside the rest of your estate plan, especially after a major life change.
Do You Actually Need a Trust?
A trust is not automatically necessary for every estate plan, but it may be worth considering depending on your assets, family structure, and goals. Trust planning may be useful for families who own property in multiple states, have blended families, want additional control over when beneficiaries receive assets, are planning for a loved one with special needs, or want certain properly titled assets to pass outside probate.
Simply creating a trust does not automatically keep every asset out of probate. Assets generally must be properly titled, transferred, or otherwise coordinated with the trust for the plan to work as intended.
Whether a will alone is enough for your situation is a good next question to ask once you’ve got the checklist above sorted, and it’s something our estate planning team can walk through with you.
Estate Planning Checklist
- Will
- Financial Power of Attorney
- Advance Healthcare Directive / Healthcare Decision-Making Documents
- Beneficiary Designations Reviewed and Current
- Trust, if appropriate for your circumstances
- Guardian nomination for minor children, if applicable
- Review of how major assets are titled
- Review after major life changes
Frequently Asked Questions
Can one document cover both financial and healthcare decisions?
Financial and healthcare decision-making are generally separate areas of authority. A financial power of attorney addresses financial and property matters, while healthcare planning addresses medical decisions. How those healthcare instructions and appointments are documented can vary by jurisdiction, and some advance directives combine healthcare instructions with the appointment of a healthcare agent.
Do I need a power of attorney?
A financial power of attorney can be an important part of an estate plan because it allows you to choose who can handle specified financial and property matters on your behalf. Whether you need one, and what authority it should provide, depends on your circumstances and the laws that apply where you live.
What happens if I don’t have a power of attorney and I’m incapacitated?
It depends on your circumstances and applicable law. There may be other ways to address certain financial or healthcare decisions, including surrogate decision-making or other less restrictive alternatives. In some situations, however, a family member may need to seek court involvement, including guardianship or conservatorship, to obtain authority over certain matters. If that’s where you’re headed, our guardianship and elder services page covers what that process looks like.
Do beneficiary designations really override my will?
For assets governed by a valid beneficiary designation, the beneficiary designation generally controls who receives that asset rather than the instructions in your will. Common examples include life insurance policies, retirement accounts, and certain payable-on-death or transfer-on-death accounts. That is why beneficiary designations should be reviewed whenever the estate plan is updated.
How do I know if I need a trust or just a will?
It depends on your assets, family circumstances, and goals. A trust may be appropriate when you want additional control over how assets are managed or distributed, own property in multiple states, are planning for a beneficiary with special needs, have a blended family, or want certain properly funded trust assets to avoid probate. An estate planning attorney can help determine whether a trust provides a meaningful benefit for your specific situation.
What documents should be included in an estate plan?
There is no single checklist that fits every family, but an estate plan commonly addresses a will, financial decision-making, healthcare decision-making, beneficiary designations, and the ownership or titling of major assets. Some families may also benefit from one or more trusts.
How often should I review my estate planning documents?
Review your estate plan after major life events such as marriage, divorce, the birth or adoption of a child, the death of a beneficiary or agent, a major change in assets, or a move to another state. Periodic reviews can also help ensure your documents and beneficiary designations still reflect your wishes.
Not sure which of these you’re actually missing? Talk to Life & Legacy Counselors and we’ll go through your current documents together and tell you honestly what’s covered and what’s not.
This article is provided for general educational purposes and is not legal advice. Estate planning laws and requirements vary by jurisdiction and individual circumstances.