Estate Planning: A Comprehensive Guide

|

May 17, 2023

Updated

Jul 15, 2024

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

older couple look over a computer screen

Estate Planning: A Comprehensive Guide

|

May 17, 2023

Updated

Jul 15, 2024

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

Estate Planning: A Comprehensive Guide

|

May 17, 2023

Updated

Jul 15, 2024

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

older couple look over a computer screen

Estate Planning: A Comprehensive Guide

|

May 17, 2023

Updated

Jul 15, 2024

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

older couple look over a computer screen

What if something happened to you?

Trustworthy helps protect and organize your family's important information, making it available to your loved ones should the worst ever happen.

What if something happened to you?

Trustworthy helps protect and organize your family's important information, making it available to your loved ones should the worst ever happen.

Estate planning, or end-of-life planning, is one of the most important actions you can take for yourself and your family.

Your estate plan serves as a roadmap for those who will care for your children and/or pets after your death, and for those who will inherit the assets that you worked so hard to accumulate.

Estate plans can also specify who will make decisions about your medical care if you become incapacitated. Without an estate plan, state laws and courts will make some of these decisions for you, likely without knowing your wishes.

End-of-life planning is essential for everyone. However, it's also one of the easiest things to put off, as most people don't like thinking about dying. In fact, a 2024 study by AARP found that only half of Americans age 50 and older had a will. Additionally, a new survey by FreeWill revealed that while a large majority of Americans believe it's important to have an estate plan, only 26% actually do.

Starting end-of-life planning can be challenging, but this guide will walk you through the basics.

What Is an Estate Plan?

An estate plan is essentially a guide for your loved ones, trusted professionals, and the courts to ensure that your wishes are honored when you pass away or become incapacitated. Your "estate" encompasses all of your property and assets, such as your home, personal property, financial assets, family heirlooms, valuables, and even digital currency.

An estate plan includes various documents detailing how to distribute these assets, who will care for your dependents, and how to manage healthcare emergencies. The specific documents and elements of your estate plan will vary based on your family, situation, priorities, finances, and the state you live in.

Do I Need an Estate Plan?

Yes! Every adult should have an estate plan, even if you have no children or many assets.

If you die without a will (dying intestate), the state will decide what happens to your assets and who your heirs are. This can result in your assets being tied up in probate court, causing additional time, stress, and costs for your loved ones. Moreover, the state's decisions might not align with your wishes, leading to an unintended legacy.

An estate plan is particularly important if you have:

  • A spouse. While your spouse might inherit your possessions if you die without a plan, this is not always guaranteed. An estate plan ensures that your spouse receives the support they need.

  • Kids, pets, or other dependents. An estate plan allows you to specify who will be your dependents' guardian if something happens to you and designate funds for their care.

Why Do I Need an Estate Plan?

Among many other benefits, your estate plan can:

  • Specify inheritance. Allow you to choose who inherits specific assets, possessions, and other valuables.

  • Reduce probate costs and time. Minimize the time and expense it takes for the courts to settle your estate.

  • Name guardians. Assign guardians for your dependents.

  • Minimize family conflicts. Reduce conflicts over your estate among family members.

  • Lower estate taxes. Help reduce taxes on your estate for your heirs.

  • Manage finances. Assign a loved one or trusted advisor to manage your finances if you cannot manage them independently.

Organize your estate documents in Trustworthy:

How to Make an Estate Plan

Step 1: Decide Whether to Use an Expert

The first step in creating an estate plan is deciding whether to engage professionals like an estate planning attorney or a financial advisor. These experts can help manage more complex estates and ensure your plan is comprehensive and legally sound.

While everyone can benefit from working with estate planning experts, professional support is particularly important if you:

  • Own a vacation home or other property in a different state.

  • Have a partner to whom you aren’t legally married.

  • Have a divorce or custody agreement in place.

  • Prefer that someone does (or doesn’t) have access to you at a hospital.

  • Are concerned about state or federal estate and gift taxes.

With Trustworthy, you can add your attorney and financial advisor to your account to collaborate on your estate plan. Our expert team can also assist in gathering the necessary paperwork and documents to share with your estate planning attorney.

Add a collaborator in Trustworthy:

Step 2: List Your Physical Possessions

Before you can decide what will happen to your possessions, you need to make sure that you are accounting for all of them.

You should list everything of value, including your home (if you own it), vehicles, jewelry, art, antiques, family heirlooms, computers, tvs, power tools, and other electronics.

Property category in Trustworthy:

Are you overwhelmed by the idea of trying to find all your property and assets? Instead of starting with a blank page, our AI creates a customized template for you to inventory your possessions.

Even better, you can add important information that your loved ones will need to know, from account numbers to family stories. Simply sign in to Trustworthy, go to the Property tab, and start filling in your template.

Step 3: List Your Digital Possessions

Our lives are increasingly lived in the digital world as well as the physical one. As such, estate planning has to take your digital assets and life into account.

Put together a list of all your email and social media accounts, cryptocurrency, money transfer apps (like PayPal and Venmo), and important passwords.

Most of your digital estate plan should be kept out of your will. Your will becomes public after you die, and it would not be good for your important passwords and accounts to end up in the hands of nefarious strangers. The digital world also changes faster than the physical world, and you don’t want to have to update your will every time you change a password or create a new account.

You can list your important digital accounts and passwords in the Passwords section of Trustworthy, or find a secure location where your family members can access the information.

Step 4: List Your Debts

Next, it is time to inventory all of your debts, including credit cards, mortgages, personal loans, auto loans, and student loans.

In your list, you should add account numbers, contact information for the companies, and where to find any related documents or agreements.

Connect financial accounts with Plaid:

Trustworthy makes this process easy. In the Finance tab, you can enter credit cards and loans. With your permission, Trustworthy can automatically pull in your account information with Plaid and add the company’s contact information.

Once you are finished with your list of debts, make copies of your lists of assets and debts for your estate planning experts, your executor, and your partner. You can also invite them as collaborators to your Trustworthy account.

Step 5: Check Your Beneficiaries

An essential part of estate planning is checking and, if needed, updating the beneficiaries on your financial accounts and insurance policies. If you have designated a beneficiary, the account will pass on to them no matter what your will says about how your assets will be divided.

Many accounts will allow you to update your beneficiaries online. However, if your 401(k) account or life insurance is provided through work, you may have to contact your company’s plan administrator to check and update your beneficiaries.

Step 6: Choose an Executor and Guardians (If You Have Children)

The next step is to choose your executor. An executor is a person who is selected to manage the execution of your last will and testament and make sure that your wishes are carried out.

Executing a will can take dozens of hours of phone calls, paperwork, and diligence and years of work. For that reason, it is important to choose an executor who has the administrative and organizational chops to get things done.

Some people choose not to name a close family member as the executor of their will because they understand the emotional pain this task may cause. Whatever you decide, you should inform your chosen executor of your decision and ask them if they’re able to take on the role, as it is a big commitment on their end.

You can name more than one executor. However, it is important to note that your executors would have to make all decisions unanimously, which might be difficult in such a challenging time. If you name more than one executor, every executor must co-sign paperwork.

It’s also a good idea to name someone as a backup, in case your first choice isn’t able to perform the duties.

Step 7: Create a Will

Once you have your lists of assets and debts and your executor in place, it is time to start creating the documents in your estate plan. We recommend that you start with your will, the centerpiece of your estate plan. Many lawyers will help you create a will for less than $1,000.

You can also work with online companies like FreeWill and Trust & Will to create your own, with special discounts for Trustworthy members through our marketplace.

Your will should include:

  • Assets and property, the belongings that you are passing on to your loved ones, such as your 401(k), house deed, and Grandpa’s favorite watch.

  • Beneficiaries, the people who will inherit your property and assets.

  • Custodian/trustee, an adult named to manage money in a trust account on behalf of a minor beneficiary.

  • Executor, someone to manage your will and close your estate. An executor is also called an administrator or personal representative.

  • Guardian, the person or people selected to take care of your children and pets.

  • Instructions on finances, guidance on the distribution of money and paying debts.

  • Funeral or burial instructions, additional instructions for your funeral or burial.

  • Gifts, specific gifts to individuals or charities.

Once you have drafted your will with your lawyer or an online service, it is time to sign and notarize it. Although a probate judge may adhere to the instructions of an unsigned will if there is reason to believe it represents your true intentions, an unsigned will is not sufficient proof of your intentions. There is no guarantee that your wishes will be carried out if your will is unsigned.

It is standard procedure to sign your will in the presence of two witnesses. They will also sign your will to validate it.

Signing your will with your two witnesses and a notary present is an additional safeguard to ensure your will is legally binding, although it isn’t required in most states. You can usually find a free notary service at your bank or credit union, and some UPS stores offer notary services for a nominal fee. You could work with a mobile notary who will travel to your office or home for an additional fee.

An increasing number of states have legalized online notary services, but you should check your state’s laws before getting your will notarized online.

Step 8: Complete Your Estate Plan

With your will completed, it’s time to finish the other documents in your estate plan.

We will cover how to create two of the most common documents: a power of attorney and a living will (advance healthcare directive). As with your last will and testament, your estate planning attorney can also help you create these documents, or you can work with an online service.

Create a Power of Attorney

The power of attorney (POA) document names specific people who will take care of important matters - such as financial and medical decisions - on your behalf while you are alive. After you have passed away, the POA is revoked and your will becomes effective.

In your power of attorney, you do not have to choose only one person to take care of your affairs while you are unable to make decisions for yourself. In fact, you should name a backup person for each role in case your first choice isn’t able to carry out their responsibilities.

Executive Power of Attorney





An executive POA takes the lead in managing big decisions on your behalf. If you have named several different POAs, this person will do their best to ensure your wishes are being carried out by the team you chose. If you don’t name POAs for different roles, the executive POA will cover all these roles.







Once you die, the executor of your will takes over managing your wishes.

Medical Power of Attorney

A medical POA advocates for you when you are unable to communicate your medical preferences or provide consent for procedures. For example, if you are in the hospital with a severe injury that has caused you to lose consciousness, a medical POA will step in to advocate for you.







The medical POA does not apply to end-of-life decisions. Designating a medical POA is not the same as completing a living will, which we will discuss in the next section.

Financial Power of Attorney

A financial POA manages your personal accounts. An accountant can provide an annual review to manage your bank accounts, or your executive POA can hire a professional to manage your bookkeeping, file taxes, and review statements.

Digital Power of Attorney





For many, our administrative lives now center around digital accounts. A digital POA is granted access to your online and digital accounts to help needed transactions run smoothly.

In order to make your digital POA’s tasks simpler, consider granting them access to a password manager so they are able to log into the necessary accounts. For example, if your executive POA has access to your Trustworthy account, they can share your password information with your digital POA.

Create a Living Will (Advance Directive)





A living will (also known as an advance directive, healthcare directive, declaration, or directive to physicians) records your wishes around end-of-life care if you are unable to speak for yourself. It is state-specific and legally binding.

As with your last will and testament, it is important to make a living will. Once you actually need a living will, it is too late to create one.

What to Include in Your Living Will





A living will should be as specific as possible because medical decisions are rarely straightforward. Providing clear guidelines about the types of medical care you do and do not want can help reduce uncertainty for your loved ones during end-of-life decisions.

Defining your quality of life in your living will enables your medical power of attorney to make informed decisions on your behalf. The more detailed your instructions, the better.

A living will may address whether you want to receive or refuse:

  • Antibiotics.

  • Cardiac resuscitation.

  • Invasive diagnostic tests or procedures.

  • Mechanical respiration.

  • Kidney dialysis.

  • Tube feeding.

  • Experimental medical procedures.

A living will requires witness signatures and, in some cases, notarization, depending on your state's laws. Some states do not allow the following individuals to act as witnesses:

  • Anyone who may inherit part of your estate.

  • Anyone named in your last will and testament.

  • Relatives by blood or marriage.

Notary services are available at banks, credit unions, libraries, county clerk’s offices, and local UPS stores. Some states also allow online notary services, but check your state's laws before using one.

Step 9: Give Your Executor a Copy of Your Estate Documents

Your estate plan documents are finished; great work! You have made it to the last step. Now, it is time to make sure that the people you have chosen to manage your affairs have the information they need to do so.

Make copies of your estate plan documents and give them to your executor and POAs. You should also tell them and the other people named in your will where your original will is stored.

The location that you choose for your original estate documents should be secure. Keep your original estate documents with your attorney, or in a safe spot with other important information.

If you use Trustworthy, you can complete this step with a few clicks of a button. Simply upload your plan to Trustworthy, and invite your executor and POAs as collaborators in your account.

How Often to Update an Estate Plan

Now that your estate plan is completed, all the work is done, right?

Not quite. You have finished the most time-consuming and difficult part of estate planning, but you still need to make sure that your plan changes as life does. You should review your estate plan at least once every four years to make sure it reflects your current wishes and assets.

You should also update your plan after life-changing events, like getting married or divorced or having a child.

Finally, you should keep an eye on financial legislation and changes to tax laws that could affect your estate and change your plan accordingly. If you have worked with a financial advisor or estate planning attorney, they can help you figure out when these changes might require you to update your estate.

There's no need to set a calendar reminder. If you add your estate plan to Trustworthy, we will add an automated reminder for you to review and update your estate plan regularly. We remember so you don’t have to.

Trustworthy reminders save members time and money:

Try Trustworthy today.

Try Trustworthy today.

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