Skip to main content

Create Your Estate Plan in 2025 with These 3 Essential Documents!

Learn about the three essential estate planning documents—will, power of attorney, and healthcare directives—to help protect your assets and loved ones.

Estate planning is an essential step in helping protect your financial legacy and guiding how your wishes are to be carried out. While the process may seem complex, you can address the majority of estate planning needs by having three key documents in place: a will, power of attorney, and healthcare directives.

These documents help you manage your assets, protect your loved ones, and help direct your affairs according to your preferences. If you haven’t reviewed your estate plan in years—or don’t have one at all—now is the time to get started.

Why You Should Update Your Estate Plan

If you already have an estate plan in place, you might wonder whether updates are necessary. The answer is yes, and here’s why:

  • Laws Change: Tax and estate laws evolve, and outdated legal language could impact your plan’s effectiveness.
  • Life Changes: Marriage, divorce, the birth of children or grandchildren, or moving to a new state may require modifications to your documents.
  • Technology and Legal Practices Evolve: Attorneys may update best practices based on legal rulings, making periodic updates beneficial.

A good rule of thumb is to review your estate plan every five years or after any major life event.

1. The Importance of a Will

A will is the foundation of an estate plan. It allows you to:

  • Determine who inherits your assets after your passing.
  • Name an executor to manage your estate.
  • Appoint a guardian for minor children, ensuring they are cared for by someone you trust.

Choosing an Executor Wisely

Many people consider naming multiple executors, such as multiple children, to share responsibilities. However, this can complicate probate, as all executors must sign documents and appear in court. Instead, choosing one primary executor with a backup is often more efficient.

Naming a Guardian for Children

If you have minor children, a will allows you to designate a guardian in case both parents pass away. When selecting a guardian, name a single person, rather than a couple. This prevents legal complications if the couple separates in the future.

SEE ALSO: Navigating the Complexities of Inheritance Tax: Strategies for More Efficient Wealth Transfer

2. Power of Attorney: Protecting Your Financial Affairs

A power of attorney (POA) grants someone the legal authority to make financial decisions on your behalf if you become incapacitated. This document can assist in managing tasks such as paying bills, managing investments, or filing taxes – without the need for court intervention.

Financial Institutions and POAs

Some banks and brokerage firms require their own power of attorney forms. If you or an elderly family member holds significant assets at a specific financial institution, check if additional POA documentation is required.

3. Healthcare Directives: Your Medical Preferences in Writing

Healthcare directives helps ensure your medical decisions are carried out according to your wishes. There are two key types:

Living Will

A living will outlines your medical preferences in various situations, such as:

  • Whether you want life support or a feeding tube.
  • End-of-life care preferences.

This document removes the burden from loved ones by ensuring they don’t have to make difficult medical choices on your behalf.

SEE ALSO: Estate Planning for Business Owners: Fostering a Legacy Beyond Retirement

Healthcare Proxy

A healthcare proxy designates someone to make medical decisions if you are unable to do so. Since no document can anticipate every possible medical scenario, a proxy ensures someone you trust can act in your best interest.

While some individuals believe they only need a proxy or a living will, having both helps ensures clarity and reduces stress on family members.

Final Thoughts: Take Control of Your Estate Plan

Estate planning doesn’t have to be overwhelming. By putting these three documents in place, you can safeguard your assets, protect your loved ones, and provide clear instructions for your care and finances.

If it has been years since you last updated your estate plan, or if you need help getting started, consulting an estate planning attorney can ensure your documents reflect your current wishes and legal requirements.

Now is the time to take action. Protect your legacy by ensuring your estate plan is up to date and in good hands.

If you need assistance getting your essential estate planning documents up to date, Paces Ferry Wealth Advisors is here to help. Contact us today to discuss your estate planning needs and make certain that your financial wishes are properly documented.

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.

Zachary Morris

Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.