7 Steps to Start Estate Planning

Estate planning ensures your assets are protected, your family’s future is secure, and your wishes are carried out. Yet, in 2024, 68% of Americans had no estate plan, leaving loved ones vulnerable to legal and financial complications. Whether you’re young, a parent, or nearing retirement, estate planning is for everyone - not just the wealthy.

Here’s a quick summary of the 7 steps to start estate planning:

1. List Your Assets: Include property, financial accounts, vehicles, valuables, and digital assets like cryptocurrency or online accounts.
2. Set Your Goals: Decide how to protect your family, fund milestones, and support charitable causes.
3. Prepare Legal Documents: Create a will or trust, and appoint a legal representative.
4. Choose Beneficiaries: Name primary and contingent beneficiaries for all assets.
5. Reduce Tax Impact: Use strategies like gifting, trusts, and charitable giving to lower estate taxes.
6. Plan for Medical Issues: Set up financial and medical powers of attorney, and outline healthcare preferences.
7. Update Your Plan: Review and revise your plan every 2–5 years or after major life changes.

Key Fact: In 2025, individuals can pass up to $13.99 million tax-free, while couples can shield $27.98 million. But tax thresholds will drop significantly in 2026.

Starting early and staying organized helps avoid unnecessary taxes, probate, and stress for your loved ones. Let’s break down each step to secure your legacy.

Step 1: List Your Assets

A well-organized estate plan starts with a complete inventory of your assets. This step ensures nothing is missed when dividing your estate among beneficiaries. Experts suggest grouping your assets into categories and keeping valuations up to date.

Property and Money

Start by documenting your tangible assets and their estimated values:

• Real Estate: Include all properties, such as your primary home, vacation houses, or rental properties. Note appraised values and mortgage details. For instance, if you own a vacation home in Florida worth $450,000 with $200,000 left on the mortgage, record both numbers.
• Financial Accounts: List all bank accounts, investment portfolios, and retirement funds. Tools like Maybe Finance can simplify this by securely connecting to over 10,000 financial institutions, offering real-time updates on your asset values in one place.
• Vehicles: Write down vehicle identification numbers (VINs) and current market values.
• Valuables: Include high-value items like jewelry, art, antiques, or collectibles. For accurate valuations, consider professional appraisals.

"Your estate attorney can store original documents, like your will and titles to your house and car. Then you and the executor of your will can have copies", says George Taylor, an estate attorney with Brinkley Morgan.

Now, don’t forget to factor in your digital assets, which are becoming an essential part of estate planning.

Online Assets

Digital assets hold increasing value and should be carefully documented:

• Digital Currency: Record cryptocurrency holdings, wallet addresses, and access details. Since crypto can be lost without proper documentation, secure this information thoroughly.
• Digital Accounts: Make a list of major online accounts, such as:
  • Investment platforms
  • Social media accounts with monetary or sentimental value
  • Domain names
  • Online business-related assets
  • Cloud storage accounts holding important files
• Intellectual Property: Include patents, trademarks, copyrights, and any content generating royalties.

Store your inventory in a secure location, like a fireproof safe or safety deposit box, and keep encrypted digital backups. If you’re using a platform like Maybe Finance, it can automatically update your financial records, making it easier for your executor to manage your estate when the time comes.

Step 2: Set Your Goals

Deciding how you want your assets distributed and defining your legacy priorities are key steps in estate planning. These goals should reflect not only your family’s needs but also any charitable causes you wish to support.

Family Protection

For most people, ensuring their family’s well-being is the heart of estate planning. A 2024 Northwestern Mutual study found that over half of Americans see inheritance as essential to their long-term financial stability.

When thinking about protecting your family, focus on these areas:

• Immediate Needs: Plan for how your family will cover daily expenses and maintain their quality of life.
• Future Milestones: Include funding for significant events like education or healthcare.
• Business Succession: If you own a family business, outline a clear plan for its transition.

You might also consider creating a family mission statement. This document can outline your core values and long-term goals, offering guidance for how your assets should be distributed. It’s a way to ensure your intentions are clear and your legacy is preserved.

While your family’s needs are a top priority, incorporating charitable giving into your plan can add another layer of meaning to your legacy.

Charitable Giving

Once your family’s future is secure, you might want to explore ways to support causes that matter to you. Charitable giving can also help reduce estate taxes, creating a win-win situation. According to a 2023 AARP report, including charitable gifts in your estate plan allows you to balance financial security today with generosity tomorrow.

"Every dollar makes a difference to a nonprofit organization. No matter what the numbers are in your bank and investment accounts, you should make decisions on how you want your assets to be distributed after death. Once you make that determination, organize your estate planning documents and beneficiary designations to ensure they reflect your goals and wishes."

Here are a few strategies for charitable giving:

• Charitable Trusts: These can provide for your family while also supporting charitable causes.
• Donor-Advised Funds: These offer flexibility, letting you decide when and how to distribute your charitable gifts.
• Direct Bequests: Include specific charitable donations in your will or trust.

To ensure your charitable giving aligns with your overall goals, consider working with both an estate planning attorney and a financial advisor. They can help you structure your plan in a way that benefits your family, supports your chosen causes, and minimizes your estate’s tax burden.

Step 3: Prepare Legal Documents

Set up a solid legal framework to ensure your estate plan is carried out as intended.

Wills vs. Trusts

The cornerstone of any estate plan often involves deciding between a will and a trust, or sometimes using both. Each serves a unique purpose and comes with its own benefits.

Feature	Will	Trust
Cost	$300–1,000 and above	$1,000–2,000 and above
Privacy	Public record	Private
Probate	Required	Avoided
Guardian designation	Yes	No

A will is the go-to option for simpler estates. It's especially critical if you have minor children, as it’s the only legal way to name their guardians. For estates under $1 million with straightforward distribution plans, a will is generally sufficient.

On the other hand, if privacy is a concern or you want to bypass probate, a trust might be worth the extra cost and effort. With the federal estate tax threshold set at $13.99 million for 2025, most families can focus on seamless asset transfers rather than worrying about estate taxes.

Once you've decided on a will, trust, or both, the next step is to appoint a legal representative who will oversee your estate plan.

Legal Representatives

Choosing the right legal representative is crucial for ensuring your estate plan is executed properly. This individual will handle responsibilities such as asset management, debt settlement, and property distribution.

Here’s what to look for in a legal representative:

• Trustworthiness: They should be reliable in managing finances.
• Organizational skills: Handling extensive documents is a key part of the role.
• Availability: They need the time and energy to fulfill their duties.
• Communication skills: Clear interaction with beneficiaries and professionals is essential.

The representative must be at least 18 years old. In some states, like Florida, they must also be a resident or a close relative. If family dynamics are complicated or specialized knowledge is required, hiring a professional fiduciary can be a smart choice.

You can support your legal representative by:

• Keeping detailed records of your assets and accounts
• Storing important documents in a secure, accessible location
• Providing clear instructions for carrying out your wishes
• Regularly reviewing your choice of representative to ensure it still makes sense

The representative’s responsibilities include filing the will, notifying beneficiaries, managing assets, paying off debts and taxes, and distributing property as outlined in your plan. Before finalizing your choice, discuss these duties with the person you’ve selected to ensure they’re willing and prepared to take on the role.

Step 4: Choose Beneficiaries

When planning your estate, selecting beneficiaries is a crucial step to ensure your assets are distributed according to your wishes, relationships, and financial priorities. This involves naming both primary beneficiaries (the first in line to inherit) and contingent beneficiaries (who inherit only if the primary beneficiaries cannot).

Here’s how different types of assets typically handle beneficiary designations:

Asset Type	Beneficiary Options	Special Considerations
Retirement Accounts	Individual, Trust, Charity	Tax rules differ based on the type of beneficiary
Life Insurance	Multiple beneficiaries with % splits	Allows for per stirpes distribution
Bank Accounts	POD (Payable on Death)	Avoids the probate process
Investment Accounts	TOD (Transfer on Death)	Directly transfers ownership to beneficiaries

Guidelines for Naming Beneficiaries

When listing beneficiaries, follow these best practices to avoid complications:

• Use full legal names and clearly state relationships to prevent confusion.
• Plan for minors: If a beneficiary is a child, consider setting up a trust or naming a guardian.
• Review legal documents: Check for any prenuptial agreements, divorce decrees, or other contracts that may affect your choices.
• Special needs considerations: Establish a special needs trust if necessary to protect eligibility for government benefits.
• Understand tax consequences: Different types of beneficiaries (individuals, trusts, charities) may face varying tax obligations.

"Beneficiary designations are often overlooked because they're made at the time of the account opening or policy placement, and account/policy holders seldom receive reminders to review and make necessary updates throughout the years."

• Creative Planning

Distribution Methods for Complex Families

If you have a blended family or other unique circumstances, consider these distribution methods:

• Per stirpes: If a beneficiary passes away, their share goes to their descendants.
• Per capita: The share of a deceased beneficiary is divided among the remaining primary beneficiaries.

When to Update Beneficiary Designations

It’s important to revisit your beneficiary choices during major life events, such as:

• Marriage or divorce
• The birth or adoption of a child
• The death of a beneficiary
• Significant shifts in relationships
• During your annual financial review

Keeping these designations up-to-date ensures they reflect your current intentions.

Lastly, maintain a master list of all beneficiary designations alongside your key estate documents. Remember, beneficiary designations take precedence over instructions in your will. To avoid conflicts and ensure alignment with your overall estate plan, consult with a financial advisor or attorney.

Step 5: Reduce Tax Impact

Estate tax planning plays a crucial role in preserving family wealth. Currently, estate taxes only apply to amounts exceeding the federal exemption threshold. However, these limits are set to drop significantly in 2026 unless Congress decides to extend the current legislation.

Estate Tax Limits

Here’s how federal estate tax rates apply to amounts above the exemption:

Estate Value Over Exemption	Tax Rate
$0 - $10,000	18%
$10,001 - $20,000	20%
$20,001 - $250,000	22-32%
$250,001 - $1 million	34-39%
Over $1 million	40%

"The sunset will reduce by about half how much wealthy individuals and families doing long-term, multi-generational estate planning can pass on to heirs tax-free during their lifetime or at death." - Justin Flach, managing director of wealth strategy for Ascent Private Capital Management of U.S. Bank

With these tax thresholds in mind, there are several steps you can take to reduce your taxable estate and preserve more for your heirs.

Tax-Saving Methods

Here are some effective strategies to legally minimize estate taxes:

Annual Gifting Program

Take advantage of the 2025 annual gift tax exclusion, which allows you to gift up to $19,000 per recipient. Married couples can double this amount, gifting up to $38,000 per person each year. These gifts reduce the overall value of your estate, lowering potential tax liability.

Trusts

Certain trusts can be powerful tools for reducing estate taxes and ensuring your wealth is distributed according to your wishes. Examples include:

• Irrevocable Life Insurance Trust (ILIT)
• Qualified Personal Residence Trust (QPRT)
• Spousal Lifetime Access Trust (SLAT)

Each of these trusts serves a specific purpose in estate planning, helping to shield assets from taxation while maintaining control over how and when they’re distributed.

Charitable Giving

Making direct contributions to charities not only supports causes that matter to you but also reduces the taxable value of your estate. This approach ensures your legacy benefits both your heirs and the organizations you care about.

"Many people think estate planning is only for wealthy people. They rationalize, 'I don't have that much money,' But everybody has an estate, and if you don't plan for it, your state does it for you without your input." - David Peterson, head of wealth planning at Fidelity

Step 6: Plan for Medical Issues

Preparing for medical emergencies is crucial to ensure that your healthcare preferences and finances are managed according to your wishes if you're unable to act. This step ties together legal documents and beneficiary designations by focusing on decision-making during emergencies.

Financial Power of Attorney

A financial power of attorney (POA) allows you to appoint someone to handle your financial matters if you’re unable to do so. This document helps avoid court involvement and ensures that your bills, investments, and other financial responsibilities are managed as you intended.

Here are the three main types of financial POAs:

Type	Purpose	Duration
General POA	Covers all financial matters	Ends if you become incapacitated
Limited POA	Handles specific tasks	Time-limited for a specific purpose
Durable POA	Broad financial authority	Remains valid even if you’re incapacitated

To make your financial POA effective:

• Submit the document to banks and financial institutions in advance.
• Verify that the institutions accept your POA.
• Regularly review the powers granted in the document.
• Select a reliable agent who understands your financial goals and preferences.

Medical Directives

While a financial POA safeguards your assets, medical directives ensure your healthcare choices are respected if you’re unable to express them. These documents work hand-in-hand with a financial POA to provide complete protection during emergencies.

"It's especially important to name a proxy if there's someone you do not want to speak on your behalf." - Kate DeBartolo, senior director of The Conversation Project

When choosing a healthcare proxy, look for someone who:

• Understands your personal values and beliefs.
• Can remain composed in high-pressure situations.
• Communicates effectively with healthcare providers.
• Advocates for your healthcare preferences.
• Can handle tough decisions with confidence.

"Your proxy should understand that difficult decisions stem from the underlying illness, not their judgment."

To ensure your medical wishes are clear:

• Complete a living will and a durable healthcare power of attorney.
• Share copies with your proxy, doctors, and legal advisor.
• Revisit these documents yearly or after significant life events.
• Have detailed conversations with your proxy about your preferences.

Medicare covers discussions about advance directives during your annual wellness visit, making it a great time to review and update your medical planning documents with your doctor.

Step 7: Update Your Plan

Estate planning isn’t something you set and forget. To make sure your assets are protected, your tax strategies stay efficient, and your loved ones remain secure, your plan needs regular attention. Experts suggest reviewing your estate plan every two years and conducting a full update every five years.

When to Update

Life doesn’t stand still, and neither should your estate plan. Here are some key moments when updates might be necessary:

Life Event	Updates to Consider
Marriage or Divorce	Revise legal documents and adjust asset distributions.
Birth or Adoption	Appoint or update guardians and restructure inheritance.
Death of a Beneficiary	Reassign beneficiaries and modify distribution plans.
Significant Financial Change	Reassess asset allocation and refine tax strategies.
Moving to a New State	Address state-specific tax rules and update legal documents.
Changes in Laws	Adapt tax planning and trust structures to comply.

These updates ensure your estate plan stays relevant and effective, especially during major life changes or scheduled reviews.

Simplify Updates with Maybe Finance

Technology can make managing your estate plan much easier. Maybe Finance is a platform designed to simplify the process, giving you a clear and organized view of your financial picture. Here’s how it can help:

• Asset Monitoring: Keep tabs on the real-time value of your properties, investments, and accounts, connecting with over 10,000 institutions.
• Document Organization: Securely store estate planning documents and set reminders for periodic reviews.
• Beneficiary Management: Update beneficiary information easily to ensure your plan aligns with your intentions.
• Financial Change Alerts: Get notified when significant shifts in asset values occur, signaling it might be time for an update.

With tools like these, staying on top of your estate plan becomes far more manageable, giving you peace of mind that everything is up to date.

Next Steps

Once your plan is in place, it's time to focus on putting it into action. Start by gathering your financial documents and creating a detailed list of your assets. This will set the stage for a smooth implementation.

Here’s a checklist to guide you through the process:

• Review Beneficiary Designations: Double-check the beneficiaries on your retirement accounts, life insurance policies, and bank accounts with transfer-on-death (TOD) designations. These take precedence over your will, so it’s essential they align with your overall plan.

• Fund Your Trust: Transfer assets into your trust without delay. This step ensures your trust operates as intended and avoids the probate process.

• Meet with Key Representatives: Sit down with your executor, power of attorney, and healthcare proxy. Review their responsibilities and make sure they know where to find essential documents.

Quick Reference for Document Storage

Document Type	Storage Location	Access Instructions
Original Will	Fireproof Safe	Share the combination with your executor
Trust Documents	Attorney's Office	Contact details should be on file
Medical Directives	Digital Safe	Grant access to your healthcare proxy
Financial Records	Maybe Finance	Provide delegate access to your executor

"I usually tell clients to come back every three to five years to update and review - see what's going on to see if they need to make changes." – Nancy Hughes, ACTEC Fellow

Using digital tools can make managing your estate even easier. For instance, Maybe Finance offers a real-time snapshot of your estate’s value, helping you identify when updates to your plan might be needed.

Estate planning is about safeguarding your legacy and ensuring your loved ones are cared for. Clear communication of your wishes can help prevent misunderstandings and conflicts down the road.

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