January 16, 2025
Allworth financial advisor Allison Scoggin, CFP®, explains the essential estate planning documents you need to protect yourself and your loved ones, making the process approachable and actionable.
Estate planning isn’t just about what happens after you’re gone—it’s about protecting yourself and your loved ones while you’re still here. I like to think of it as building a safety net: you hope you never need it, but if you do, it’s ready to catch you.
If you’ve been putting off estate planning because it feels overwhelming, you’re not alone. The good news is that it doesn’t have to be complicated. By focusing on a few key documents, you can create a solid foundation that gives you peace of mind and ensures your wishes are honored.
Let’s walk through the must-have estate planning documents every family should consider.
Your will is the cornerstone of your estate plan. It outlines your wishes for how your assets will be distributed, names guardians for minor children, and can even include instructions for pets or sentimental items.
Without a will, the state decides who gets what, and the process (known as intestate succession) can be time-consuming and stressful for your loved ones.
Pro Tip: A will doesn’t avoid probate. If you want to bypass probate, consider creating a trust in addition to your will.
A living trust is a powerful tool that can help you avoid probate and keep your affairs private. Unlike a will, which becomes public record, a trust allows you to manage your assets during your lifetime and transfer them seamlessly to your beneficiaries when you pass.
A trust can also provide for your care if you become incapacitated, ensuring your finances are managed according to your wishes.
Why It’s Important: In states like California, where probate can be lengthy and costly, a trust can save your family significant time and money.
A durable power of attorney allows someone you trust to manage your financial affairs if you’re unable to do so. This could include paying bills, managing investments, or handling property transactions.
Without this document, your loved ones may need to go through a court process to gain the authority to act on your behalf—a process that can be both expensive and time-consuming.
Tip: Choose someone who understands your values and financial preferences, and keep this document updated as your life changes.
A healthcare directive spells out your medical wishes if you can’t communicate them yourself. This includes decisions about life support, resuscitation, and other critical care choices.
You’ll also want to name a healthcare proxy—a person you trust to make medical decisions on your behalf.
Why It Matters: This document gives your loved ones clarity and ensures your wishes are honored during an emotional time.
Did you know that certain accounts, like retirement accounts and life insurance policies, don’t pass through your will or trust? Instead, they go directly to the beneficiaries you’ve named.
It’s crucial to review and update these designations regularly, especially after major life events like marriage, divorce, or the birth of a child.
Key Accounts to Check:
A HIPAA authorization allows your designated healthcare proxy to access your medical records. Without it, doctors and hospitals may be restricted from sharing vital information, even with close family members.
Quick Tip: Make sure this document is on file with your healthcare providers to avoid any delays in an emergency.
Estate planning isn’t just for the wealthy—it’s for anyone who wants to make life easier for their loved ones. By having these documents in place, you:
Think of it this way: estate planning is an act of love. It’s about taking care of the people who matter most to you, even when you can’t be there to do it yourself.
If you’re feeling overwhelmed, start small. Create a will, name a power of attorney, and review your beneficiary designations. From there, you can build out the rest of your plan over time.
And remember, estate planning isn’t one-and-done. Life changes—marriages, divorces, births, deaths, and even changes in tax laws can all impact your plan. Make it a habit to review your documents every few years (or after a major life event) to ensure everything is up to date.
If you’re unsure where to begin or want to discuss your unique situation, I’d be happy to help. Together, we can create a plan that gives you and your family peace of mind.
Let’s take the first step toward securing your future—starting today.
No matter what changes may happen in life, I believe it’s possible to refocus any situation in a way that helps to create positive change. That is why I love being a financial advisor and helping my clients listen to their inner voice and change their outcomes for the better.
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