Estate planning isn’t just for the ultra-wealthy — it’s an essential financial step for every American.

As of 2025, more than two-thirds of U.S. adults (67%) don’t have a will, according to Caring.com’s annual survey, leaving loved ones vulnerable to confusion, court disputes, and costly legal fees. Whether you’re a homeowner, parent, or investor, creating a clear estate plan helps protect your assets and ensures your legacy is distributed exactly as you intend.

Understanding The Purpose Of Estate Planning

At its core, estate planning is about control and clarity — controlling who inherits your assets and ensuring your wishes are honored when you’re no longer here. It encompasses legal documents like wills, trusts, and powers of attorney that guide how your estate is handled after death or incapacity. In the absence of these documents, state intestacy laws take over, often distributing assets in ways that differ from your intentions.

According to the American Bar Association, estate planning has expanded in scope since the pandemic. More Americans are now including digital assets such as cryptocurrency holdings, online businesses, and social media accounts in their plans. Experts from Morgan Stanley Wealth Management emphasize that drafting an estate plan isn’t a one-time event — it’s a “living” process that evolves with your life, family, and finances.

Take Inventory Of Your Assets

The first step toward a solid estate plan is a full accounting of what you own. This includes real estate, investments, retirement accounts, life insurance policies, and valuable personal property. A 2025 report from Fidelity Investments found that nearly 40% of high-income households underestimate the total value of their estate, often forgetting assets like stock options, digital currency, or intellectual property.

Once you’ve made this inventory, determine which assets are individually owned and which are jointly held. This clarity ensures a smooth transfer process and helps avoid probate disputes down the line.

Draft A Will That Reflects Your Wishes

Your last will and testament is the backbone of an estate plan. It names an executor to manage your estate and provides detailed instructions on how assets should be distributed. Without a will, you’re considered to have died intestate, meaning your state determines who inherits — a process that can drag on for months and drain thousands in legal fees.

In 2025, the median cost of settling an intestate estate in the U.S. is estimated at $14,000, according to LegalZoom, compared to less than half that amount for estates with a valid will. Beyond financial savings, a well-drafted will provides emotional reassurance for your family.

Designate Beneficiaries Wisely

Naming beneficiaries for your financial accounts, insurance policies, and retirement plans is crucial. These designations often override instructions in your will, so it’s important to keep them updated after major life changes such as marriage, divorce, or childbirth. Financial advisors note that beneficiary disputes are among the most common reasons families end up in probate court.

Plan For Your Children’s Future

If you have minor children, naming a legal guardian in your will is one of the most critical decisions you’ll make. Without a designated guardian, a court will decide who assumes custody — sometimes against your wishes. A 2025 Harris Poll found that only 38% of parents with children under 18 have named a guardian, underscoring how often this step is overlooked.

Prepare For Incapacity

Estate planning also involves preparing for the unexpected. A durable power of attorney for finances and a healthcare power of attorney ensure that trusted individuals can make key decisions on your behalf if you’re incapacitated. You may also want to include a living will, which outlines your preferences for medical treatment, end-of-life care, and resuscitation.

The National Institute on Aging reports that medical power of attorney filings have risen 22% since 2020, reflecting Americans’ growing awareness of healthcare autonomy.

“Estate Planning” written on paper with a pen, representing the first step toward securing assets and preparing for the future.

Consider A Trust For Flexibility And Privacy

While a will provides structure, a trust offers control and privacy. A revocable living trust allows you to manage your assets during your lifetime and bypass probate upon death, while an irrevocable trust can offer tax advantages and creditor protection. Trusts can also specify timing and conditions of inheritance — for example, delaying asset distribution until a child reaches a certain age.

In 2025, the federal estate tax exemption remains historically high at $13.61 million per individual, but it is expected to drop in 2026 when portions of the 2017 Tax Cuts and Jobs Act expire. This makes trusts increasingly popular among high-net-worth families looking to lock in tax-efficient strategies before 2026.

Review And Update Regularly

Life changes — and your estate plan should too. Advisors recommend reviewing your documents at least every three years or after major milestones such as marriage, divorce, or property acquisition. As Morgan Stanley’s Wealth Management division puts it, estate planning is about “anticipating change, not reacting to it.”

People Also Ask

What Happens If I Die Without A Will In The U.S.?

Your assets are distributed under state intestacy laws. Typically, spouses and children inherit first, followed by extended relatives. However, this process can take months and may not reflect your true wishes.

Is A Trust Better Than A Will?

It depends on your needs. A will governs distribution after death, while a trust can manage assets during your lifetime and avoid probate. High-net-worth individuals often use both for greater control.

How Often Should I Update My Estate Plan?

Experts recommend reviewing your estate plan every three years, or sooner if you experience major life changes like marriage, divorce, or new asset acquisition.

Do I Need An Attorney To Create An Estate Plan?

While online templates can be a starting point, a qualified estate planning attorney ensures your documents comply with state laws and reflect your specific wishes. Legal experts note that DIY wills often lead to costly probate disputes when important details are missed.

Conclusion: Protecting Your Legacy Starts Now

Estate planning isn’t simply a legal formality — it’s an act of care and foresight. By taking time to organize your assets, name trusted decision-makers, and plan for taxes, you reduce future stress and uncertainty for those you love. As leading wealth advisors always remind us, your estate plan is more than a document — it’s your financial story preserved for generations.