Summary: Estate Planning for Normal People
The Documents You Actually Need
David died at 67 without a will. He assumed everything would go to his second wife, Helen. Under their state’s intestacy laws, Helen received half. The other half went to his adult children from his first marriage, including his share of the house Helen lives in. She now co-owns her home with stepchildren she barely knows. A will would have cost $200 to $500 and taken an afternoon.
Estate planning for most people means three documents, not a family office. A will directs the distribution of assets, names an executor, and designates guardians for minor children. It does not control assets passing by beneficiary designation or joint ownership. Online services prepare wills for $100 to $300; an estate planning attorney charges $500 to $1,500 for a basic package. The document must be signed per state requirements, typically before two witnesses who are not beneficiaries.
A healthcare directive documents your wishes about medical treatment if you cannot communicate, paired with a healthcare power of attorney naming someone to make medical decisions on your behalf. Many states offer free forms. The organization Five Wishes provides a widely accepted document for roughly $5. Once completed, give copies to your healthcare agent, your doctor, and your family. A directive locked in a safe deposit box does no good in an emergency.
A durable financial power of attorney names someone to manage your finances if you become incapacitated: paying bills, handling investments, filing taxes. Without one, your family must petition a court for guardianship, a process costing thousands and taking months while accounts remain frozen. Choose someone you trust completely and name a backup.
Beyond the basics: review beneficiary designations on retirement accounts and life insurance whenever circumstances change, because these override your will. A revocable living trust ($1,000 to $3,000) avoids probate and provides management during incapacity, valuable for larger estates or real estate in multiple states. Create a secure record of digital accounts and passwords.
These three documents together cost a few hundred dollars and take a few hours. Not having them costs thousands, months of court proceedings, and immeasurable stress. Do it this month.