What is in a simple Estate Plan?

If you’re like most people, with a few kids and a house, you only need a will. You can use an online service like www.freewill.com or www.mamabearlegalforms.com. The most common option is to meet with a local lawyer to help you discuss and setup the three documents needed for a simple estate plan.

  • Will
  • Financial Power of Attorney
  • Healthcare Directive

You may need to consider a trust (and only a trust) if you’re older, your kids are grown, and your estate is worth at least $1 million. This lets you avoid probate in a way that wills won’t allow.

If you have an estate that’s large or complex, plus dependents—you need a will and a living trust. (Your will fills in the guardianship gap of a trust.) If you do get both, don’t worry about them bumping into each other. They’re separate legal tools and (unlike siblings) they don’t usually have conflicts between them. If there’s a legitimate conflict, the trust overrides the will.

The most important thing to keep in mind is this: Everyone needs a will, but not everyone needs a trust. The main unique power of a will is the option to name a guardian for your children, while the main unique power of a trust is to skip probate.

Last Will and Testament

A will is a legal document that puts in writing what you want to happen when you die. It outlines things like who you want to get your money and your stuff—and who should look after your kids and pets. There are several types of wills, but they all boil down to the same basic document.

A will can resolve issues as big as dividing the family farm among five siblings or something small, like making sure your nephew gets the pocketknife he admires.

There are different kinds of wills, below are the primary one with a short description.

  • Simple Will – covers the basics—without any fancy clauses or stipulations.
  • Living Will – a living will is not a last will and testament. A living will is a document that explains your wishes for your end-of-life medical care if you can’t speak for yourself.
  • Joint Will – A joint will is a document created by two people who leave their stuff to each other. They can turn into a legal headache. A better option is a mirror will.
  • Mirror Wills – A mirror will includes two wills that are drafted almost identically, but they have different names as testators (the people making the will) and are signed individually. Mirror wills are two different wills, an advantage of a mirror will is that each spouse can make changes to their will whenever they need to without their spouse’s signature.
  • Holographic Wills – It’s a last will and testament that is written and signed by hand. Not all states accept holographic wills as valid, so if you have one, make sure it’s accepted where you live.
  • Noncupative Wills – It’s a last will and testament that’s spoken out loud instead of written down. This kind of will is made when the person making the will may pass away soon. Nuncupative wills have rules that differ from state to state. In some states, the person stating their wishes has to be dying and it may only be valid if three or more people witness the person speaking. Sometimes, the nuncupative will has to be written down after being spoken, and other states won’t recognize a spoken will at all.
  • Deathbed Wills – is exactly what it sounds like—you create it if you’re facing certain death. You can write and sign it by hand, or you can type it out and sign it in the presence of witnesses. It sounds a lot like the holographic or nuncupative wills. The only real difference is that deathbed wills are typed.

Who is involved in a will?

Beneficiaries: the people or organizations who inherit someone’s stuff
Executor: also called personal representative or administrator of estate, it’s the person in charge of carrying out the instructions in a will
Guardians: people who care for the minor children and other dependents mentioned in a will

Next week we will discuss what should be in your estate plan.


Dave Conley, CFP

Please understand that I am not an attorney but a financial planner. I can answer general estate planning questions as part of my training as a Certified Financial Planner. Any specific Estate Plan questions should be directed to an attorney with experience in this area. We would be happy to provide a referral to local Estate Planning attorney.