Estate Planning Essentials: Key Documents to Consider

• A well-designed estate plan can help protect your assets, communicate your wishes, and provide guidance for your loved ones
• Core documents may include a will, trust, powers of attorney, and medical directives, each serving a distinct planning purpose
• Because life circumstances and laws change, your estate planning documents should be reviewed periodically with your professional advisors

Estate planning can feel daunting, which is why many people tend to postpone it. Yet there are many reasons to create a plan—and it’s never too early to begin. A well-designed estate plan can help you navigate life’s unexpected transitions; grow, protect, and preserve your assets; transfer wealth and leave a legacy for your heirs and potentially mitigate estate taxes.

With these goals in mind, a helpful first step is understanding the key documents that form the foundation of a comprehensive estate plan. From there, you can evaluate strategies designed to support your long-term objectives.

The foundational documents of an estate plan commonly include a will, a trust, and various powers of attorney and medical directives. Because your needs and family circumstances may change over time, these documents should be reviewed and updated periodically. It’s also important to remember that estate planning documents are governed by state-specific laws, so you should consult an attorney familiar with the laws of your state as you create or revise each one.

A will directs how your assets should be distributed and helps communicate your wishes to your heirs. It should be revisited periodically, particularly after significant life events such as marriage, the birth of a child, divorce, or death; changes in estate and tax laws; or shifts in your financial circumstances or personal objectives. The following questions can help you identify what should be addressed in your will:

• Who are your family members, such as a spouse, stepchildren, grandchildren, parents, siblings, nieces, nephews, or others? How old are they, and where do they live?
• Are they married?
• Have you or your spouse been previously married? Are there children from a prior marriage?
• What assets do you own, such as real estate, checking and savings accounts, investment accounts, retirement accounts, life insurance, personal property, or business interests?
• Do you have any current or future interests in a trust or potential inheritances?
• Will you need to provide financial support for parents or others?
• Who should receive your assets, and should they pass outright or in trust?
• Who do you want to serve as executor of your will, and who should serve as successor executor? Have you considered whether a corporate executor may be appropriate?
• If you have young children, who should serve as their guardian? Should that person also manage assets left to the children?
• Are you charitably inclined?

A power of attorney allows you to name someone to act on your behalf if you are unable to make certain decisions or manage specific responsibilities. There are different types of powers of attorney, and you may choose different individuals for different roles. When selecting those individuals, consider their judgment, relevant skills, availability, and geographic location. Common documents to consider include:

• Financial power of attorney: This document designates someone to take financial action on your behalf. Consider when you want the authority to take effect, how long it should last, what powers the individual should have, and who should make decisions regarding any business interests.
• Medical power of attorney: Also known as a health care proxy, this document designates someone to make medical decisions on your behalf if you become incapacitated.
• Living will: Often used alongside a medical power of attorney, this document outlines your wishes regarding life support, artificial nutrition, and other care preferences in the event of a serious medical condition or debilitating illness.

A trust can provide a structured way to manage and distribute your assets according to your wishes. Depending on your circumstances, a trust may also help mitigate taxes, preserve privacy, and avoid the probate process. In addition to determining whom to name as trustee and where the trust will be established, consider the following questions before creating a trust:

• What are your goals for the trust?
• Who are the beneficiaries, such as a spouse, children, siblings, or charitable organizations?
• How and when should income and principal be distributed? Should distributions be automatic or discretionary?
• Should distributions be limited to specific purposes, such as health, education, maintenance, support, starting a business, purchasing a first home, or getting married?
• Should beneficiaries have withdrawal rights annually or when they reach a specific age?
• Who should serve as trustee? Should there be a co-trustee or corporate co-trustee?

An effective estate plan is not a one-time exercise. As your family, finances, goals, and applicable laws evolve, your documents should be reviewed to help ensure they continue to reflect your wishes. Working with your attorney, tax advisor, and other trusted professionals can help you evaluate whether your will, powers of attorney, medical directives, and trusts are structured to support your financial and personal objectives and provide greater confidence for you and your loved ones.

Start by choosing one priority. It might be updating beneficiary designations, naming fiduciaries, reviewing old documents, organizing financial information, discussing guardianship, evaluating insurance, or scheduling a meeting with your advisors. A single action can create momentum.

It can also help to set a defined timeline. Planning without a deadline is easy to postpone. A reasonable schedule creates accountability while still giving you space to think carefully. The objective is not to rush important decisions, but to avoid letting open-ended questions remain open indefinitely.

Learn more about how a comprehensive approach to wealth planning can help protect what matters most to you and your family.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought. 

Wilmington Trust is not authorized to and does not provide legal, accounting, or tax advice. Our advice and recommendations provided to you are illustrative only and subject to the opinions and advice of your own attorney, tax advisor, or other professional advisor.

There is no assurance that any investment, financial, or estate planning strategy will be successful. Estate planning strategies require consideration of the suitability based on an individual’s objectives, financial situation, and particular needs.

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