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The Basics of Estate Planning You Should Know

Over 60% of Americans die without a will. That means the government—not your family—could decide what happens to your home, savings, and belongings.


Estate planning isn’t just for the wealthy or elderly—it’s essential for anyone who wants a say in how their assets are handled after they’re gone. From deciding who inherits your property to naming a guardian for your children, estate planning puts you in control.


If your assets include a home, the stakes are even higher. Having the right documents in place—like a will, trust, or power of attorney—can help your loved ones avoid probate delays and costly legal battles. That’s why it's smart to work with professionals who offer real estate legal services for home buyers and sellers, ensuring your property is protected now and in the future.


In this guide, we’ll break down the basics of estate planning so you can make informed choices, protect your family, and preserve what you’ve worked hard for.

Why Estate Planning Matters

Estate planning is more than deciding who gets what. It’s about protecting your loved ones from stress, confusion, and financial hardship after you’re gone.


Without a solid estate plan, your estate may be subject to probate court, a lengthy and expensive legal process. In most states, this can take several months—even years—and comes with court fees, attorney costs, and public scrutiny.


A clear estate plan can:

  • Ensure your assets go to the right people
  • Avoid family disputes
  • Minimize estate taxes
  • Appoint guardians for minors
  • Protect family-owned real estate or businesses

Key Documents in an Estate Plan

An effective estate plan typically includes several core documents. Each plays a distinct role in securing your wishes and protecting your estate.

Last Will and Testament

Your will outlines how your property and possessions should be distributed. It also names an executor—the person responsible for carrying out your instructions. If you have minor children, this is where you appoint a legal guardian.


Without a will, you’re considered intestate, meaning your assets are divided according to your state’s laws. In California, for example, Probate Code Section 6400 governs intestate succession, often distributing assets in a way that may not align with your wishes.

Living Trust

A revocable living trust allows you to transfer ownership of assets—such as real estate, bank accounts, and investments—into a trust during your lifetime. You maintain control of these assets as the trustee and can modify the trust as needed.


Upon death, the assets in a trust are transferred directly to your beneficiaries, bypassing probate. This provides privacy, saves time, and often reduces legal costs.

Power of Attorney

This legal document gives someone you trust the authority to handle your financial affairs if you become incapacitated. That includes paying bills, managing property, or making investment decisions on your behalf.


Without it, your family might have to petition the court for control—a process that can be time-consuming and emotionally draining.

Advance Healthcare Directive

Sometimes called a living will, this directive outlines your healthcare wishes if you’re unable to communicate them. It also names a healthcare agent to make medical decisions on your behalf.


Having this document in place relieves loved ones from making difficult decisions without guidance and ensures your personal values are honored.

Common Estate Planning Mistakes

Even people with a plan in place can make costly errors. Here are a few pitfalls to avoid:

  • Not updating documents after life changes like marriage, divorce, or the birth of a child
  • Failing to fund a trust, meaning assets are never actually transferred into it
  • Overlooking digital assets like online accounts, crypto, or intellectual property
  • Naming the wrong executor or trustee—choose someone responsible and trustworthy

Estate Taxes and Exemptions

Estate planning can also help reduce your tax burden. As of 2025, the federal estate tax exemption is $13.99 million per individual per individual, adjusted for inflation. Estates exceeding this amount may be subject to a top federal tax rate of 40%.


Some states impose their own estate or inheritance taxes. For example, Maryland has both, while Florida has neither. Knowing your local laws is key to effective planning.


Strategies like gifting, creating irrevocable trusts, or charitable donations can all help minimize taxes and preserve wealth for future generations.

When to Start Planning

The best time to create an estate plan is before you need it. Even young adults should have a basic plan in place—especially if they own property, have children, or want control over healthcare decisions.


An estate plan isn’t a one-time task. Review it every few years, or whenever major life changes occur. That way, your plan always reflects your current situation and goals.

Final Thoughts

Estate planning isn’t just about preparing for death—it’s about securing your life’s work, your family’s future, and your own peace of mind. Without a clear, legally valid plan, your loved ones could face unnecessary court battles, delays in accessing finances, or even the risk of losing what you intended for them to keep.


From writing a simple will to setting up a trust, every element of estate planning gives you more control in a world full of uncertainty. And because laws and family circumstances change, it’s wise to review your plan regularly to ensure it stays relevant.


Ultimately, estate planning is one of the most responsible and compassionate decisions you can make. It’s a way to speak for yourself—even when you no longer can—and ensure that your wishes are carried out with dignity, clarity, and respect.

author

Chris Bates

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