How to Do Estate Planning: Where to Begin
Estate planning is the process of organizing your finances, property, and legal documents so that your wishes are carried out if you become incapacitated or after you pass away. If you've been wondering how to do estate planning, the answer is simpler than most people expect: take stock of what you own, decide who should receive it, choose the people who will carry out your wishes, and put it all in writing with the right legal documents. You don't need to be wealthy, and you don't need to do it all in a single afternoon—but you do need to start.
This step-by-step guide walks you through the entire process so you can protect your family, minimize taxes and legal fees, and gain peace of mind knowing that nothing important has been left to chance.
Why Estate Planning Matters
Without a plan in place, state law decides who inherits your assets, a court appoints a guardian for your minor children, and your family may face months of expensive probate proceedings. Estate planning puts you in control of those decisions. It also allows you to:
- Protect loved ones from unnecessary financial stress
- Reduce or eliminate estate taxes and probate costs
- Ensure your healthcare preferences are honored
- Provide for dependents with special needs
- Leave a charitable legacy if you choose
Step 1: Take Inventory of Your Assets
Before you can plan for the future, you need a clear picture of what you own—and what you owe. Create a comprehensive list that includes:
- Real estate — your home, rental properties, vacation property, or land
- Financial accounts — checking, savings, brokerage, and retirement accounts
- Insurance policies — life, disability, and long-term care
- Business interests — ownership stakes, partnerships, or LLCs
- Personal property — vehicles, jewelry, art, collectibles
- Digital assets — cryptocurrency, online accounts, and intellectual property
- Debts and liabilities — mortgages, loans, and credit card balances
Step 2: Define Your Goals
Estate planning is deeply personal. Before you draft any documents, ask yourself what matters most:
- Do you want to make sure your spouse can maintain their lifestyle?
- Is funding your children's education a priority?
- Do you want to minimize the tax burden on your heirs?
- Would you like to support a charitable organization?
- Do you need to protect assets from creditors?
Step 3: Choose Your Beneficiaries
A beneficiary is any person or organization that will receive your assets. Be specific. For each asset or account, decide:
- Who is the primary beneficiary?
- Who is the contingent beneficiary if the primary cannot inherit?
Remember that beneficiary designations on retirement accounts and life insurance policies override whatever your will says.
Step 4: Select Guardians for Minor Children
If you have children under 18, naming a guardian is one of the most important decisions you will make. Consider the candidate's values, parenting style, financial stability, and willingness to serve. It is wise to name an alternate guardian as well.
Step 5: Choose an Executor and Trustee
Your executor manages your estate through the probate process. Your trustee manages any trust you create, following its terms to invest and distribute assets to beneficiaries over time. Look for someone who is organized, trustworthy, and comfortable handling financial matters.
Qualities to Look For
- Integrity and impartiality
- Financial literacy
- Availability and willingness to serve
- Proximity to your beneficiaries
Step 6: Create the Essential Documents
Last Will and Testament
Your will spells out who gets what, names your executor, and designates guardians for minor children.
Revocable Living Trust
A trust holds assets on behalf of your beneficiaries and can help your estate avoid probate, maintain privacy, and provide for structured distributions.
Durable Power of Attorney
This document authorizes someone you trust to manage your financial affairs if you are unable to do so yourself.
Advance Healthcare Directive
This document outlines your medical treatment preferences and names someone to make healthcare decisions on your behalf.
Step 7: Review and Update Regularly
An estate plan is not a one-and-done project. Review your documents at least every three to five years, and immediately after any major life event such as:
- Marriage or divorce
- Birth or adoption of a child
- Death of a beneficiary, executor, or trustee
- Significant change in assets or income
- A move to a different state
- Changes in tax law
Start Your Estate Plan with Confidence
Learning how to do estate planning is the first step—taking action is the second. The process doesn't have to be overwhelming.
If you're ready to move forward, the team at Archangel Trust is here to help. We specialize in trust creation, administration, and long-term estate planning strategies designed to give you and your family lasting peace of mind. Reach out today to schedule a consultation.