Estate Planning Basics: A Friendly Guide for Beginners

Estate Planning 101 is simply a way to decide who gets what, who’s in charge, and how decisions are made if you’re ever unable to make them yourself, or after your death. A basic plan can spare your family confusion, delays, and extra costs, and it doesn’t have to be complicated or expensive.

In this guide, we’ll walk through the essentials: the core documents (will, powers of attorney, healthcare directives), how trusts work, who to appoint for key roles, and a simple six-step checklist to get started. We’ll also compare common tools, flag easy mistakes to avoid, and answer FAQs so you can leave clear instructions and keep your plan up to date.

Estate Planning 101 works best when you take small, clear steps in the right order. Use the checklist as a guide of things to consider when coming up with a plan.

Step 1: Inventory Your Assets and Liabilities 

Start with a simple balance sheet of what you own and what you owe. On one side, list bank and brokerage accounts, retirement plans, life insurance policies, real estate, vehicles, and valuable personal items. Add employer benefits, digital assets, and any business interests. On the other side, list mortgages, loans, and credit cards.

Note how each asset is titled and who the beneficiary is, since those designations can control who receives the asset. Keep account numbers, institutions, and points of contact in one place so your executor can find them.

Step 2: Appoint Key People

A key step in estate planning is choosing the right helpers. Name an executor (personal representative) to settle your estate, a guardian for minor children, and an agent under a financial power of attorney. Consider a healthcare proxy to make medical decisions if you are unable to do so.

If you will use a trust, name a trustee and at least one backup. Pick people who are organized, available, and comfortable with the responsibility. Have a conversation with them about why you chose them, and share what the role involves.

Step 3: Choose the Core Documents

The core of Estate Planning 101 is a short set of documents: a will, financial power of attorney, and healthcare directive with Heath Insurance Portability and Accountability Act (“HIPAA”) release. Many families also add a revocable living trust to simplify transfers and provide backup management during incapacity.

Keep beneficiary designations on life insurance and retirement accounts up to date, since those forms usually control over what the will says. A short “letter of intent” can provide practical guidance on personal items, service preferences, and contacts.

Step 4: Decide Between Online vs. Attorney-Drafted Documents

In general, Estate Planning 101 can be done with vetted online tools for straightforward situations. You may want to consult an attorney when there are blended families, special needs planning, a business, real estate in multiple states, large or complex estates, or when you want customized tax and trust provisions. Cost, complexity, and your comfort level should guide the choice. Whichever route you take, sign and witness documents exactly as required in your state.

Step 5: Fund Trusts and Organize Access

To make a revocable trust work, you have to fund it. A qualified financial professional can help with retitling selected accounts and real property into the trust’s name where appropriate, and consider transfer-on-death or payable-on-death designations that align with your plan.

Coordinate beneficiary forms on life insurance and retirement accounts so they match your intentions, whether that is an individual or a trust. Gather deeds, titles, statements, and policy pages, and record where originals are kept. Create a simple access plan for digital accounts using a password manager or sealed instructions.

Step 6: Store Documents and Communicate Your Plan

The last step in Estate Planning 101 is safe storage of your documents and clear communication with those involved. Keep signed originals in a safe place that your executor can access, such as a fire-resistant home safe or with your attorney.

Share copies with key people and let them know where the originals live. Keep digital PDFs in a secure folder. Add an annual or birthday reminder to review your plan after major life changes. A one-page summary listing roles, key accounts, and where documents are stored makes things easier when your family needs it most.

These tools work together. A will handles transfers after death, a trust can manage and distribute while you’re alive and after, and powers of attorney cover decisions during your lifetime. Here’s a quick overview of how they work:

• Not funding the trust. Creating it isn’t enough. You also need to retitle key accounts and property or use beneficiary designations that flow to the trust.
• Not updating beneficiaries. Retirement accounts and life insurance pay the named beneficiaries even if a will says otherwise.
• No backups. Name alternates for executor, trustee, and agents in case someone is unable to serve.
• Storing documents where no one can find or access them. Tell your people where originals and passwords are kept.
• Ignoring digital assets. Make a master list of key logins, cloud storage, and subscription accounts and keep it in a safe place. Remember to update regularly.
• Never revisiting the plan. Big life changes can make a good plan outdated fast.
• DIY on complex situations. Blended families, special-needs planning, multi-state property, or a business usually merit legal advice.

Plan to review after major milestones like marriage or divorce, a new child, buying or selling a home, starting or selling a business, a big change in health or wealth, retirement, or a move to a new state.

Otherwise, a quick check every two to three years keeps beneficiaries, titling, and roles current. Use a simple checklist: confirm beneficiaries, verify who’s appointed for each role, and make sure your trust is funded and your documents are where your helpers can find them.

Estate Planning 101 is easy when you have a solid to-do list in place. Get started by:

• Make a one-page inventory of assets, debts, and key contacts.
• Choose your helpers (executor, guardians, agents) and ask them to serve.
• Decide whether to use a reputable online tool or an attorney based on complexity.
• Align titles and beneficiaries, and fund any revocable trust you create.
• Store signed originals safely and share access details with your helpers.

If life insurance is part of your plan, you can compare options and pricing in minutes, then align your beneficiary designations with the rest of your documents. And, life insurance policies purchased through Ethos include access to free estate planning tools.

This means you can accomplish multiple needs in one step using our user-friendly online platform. (Availability varies by state)