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Wills and Estate Planning Basics: The Documents Everyone Needs
Most adults need four basic documents: a will, up-to-date beneficiary designations, a durable financial power of attorney, and a health care proxy with an advance directive. Parents of minor children also use their will to name a guardian.
Yet a 2025 Caring.com survey with YouGov found only about 24% of U.S. adults have a will, down from 33% in 2022, and parents of children under 18 were the largest group without any estate documents. Estate planning is not just for the wealthy; it is a core part of Security Wealth.
Your will
A will says who receives your property after you die and names an executor (also called a personal representative) to carry out those wishes. Without one, state law decides who inherits, and a court chooses who manages the estate. Those default rules may not match what you would have chosen, especially for unmarried partners, stepchildren or close friends.
Formal requirements, such as the number of witnesses, vary by state, so check your state’s rules or use an attorney if your situation is not simple.
Beneficiary designations override your will
This is the part most people miss. As the American Bar Association explains, your will does not control assets that pass by beneficiary designation or by how they are titled, including life insurance, retirement accounts, payable-on-death bank accounts and property held jointly with right of survivorship.
Example: Sam’s estate includes a $400,000 home owned with a spouse as joint tenants with right of survivorship, a $150,000 401(k) and a $50,000 term life policy, plus $20,000 in a checking account in Sam’s name alone with no payable-on-death beneficiary. Of that $620,000, only the $20,000 checking account is governed by the will. The home passes to the joint owner, and the life insurance goes to whoever is named on the form, which can include an ex-spouse Sam forgot to remove (some states automatically revoke an ex-spouse designation on divorce, but don’t count on it). The 401(k) generally goes to the named beneficiary too, but federal rules for most workplace plans require it to go to Sam’s current spouse unless that spouse signed a written consent to someone else, so check your plan’s rules.
Review beneficiaries on every account after marriage, divorce, a birth or a death, and name a contingent (backup) beneficiary too.
Durable power of attorney for finances
A durable power of attorney names an agent to handle your money if you cannot, for example after a stroke or accident. “Durable” means it stays in effect if you become incapacitated. Without one, your family may need to go to court for a guardianship or conservatorship just to pay your bills.
Pick someone trustworthy and organized. The Consumer Financial Protection Bureau’s free Managing Someone Else’s Money guides explain an agent’s duties: act in your best interest, manage money carefully, keep your money separate from their own and keep good records.
Health care proxy and advance directive
A health care proxy (or health care power of attorney) names the person who makes medical decisions if you cannot speak for yourself. A living will records the treatments you would or would not want. Together they are called advance directives.
The National Institute on Aging notes that advance directives only take effect if you are unable to decide for yourself, can be changed at any time, and that people who document their wishes are more likely to receive the care they prefer. Talk with the person you name; the conversation matters as much as the form.
Guardianship for children
If you have minor children, your will is where you nominate a guardian to raise them if both parents die. A court makes the final decision, but it gives strong weight to your choice. Many parents also name a separate person or trustee to manage the money left for the children, since an 18-year-old receiving a lump sum is rarely ideal.
Digital assets
Email, photos, online banks and crypto wallets can be lost if no one can get in. Keep an up-to-date list of accounts in a secure place, use the “legacy contact” or inactive-account features that many services offer, and consider a password manager with an emergency-access option. Rules on what an executor may access differ by state and by service, so state your wishes in writing.
Probate, and when a trust helps
Probate is the court process that validates a will and appoints the executor. The ABA notes that most probate proceedings are neither expensive nor prolonged, despite what some vendors of living trusts claim. Still, it is public and can take months.
A revocable living trust can help when you:
- Own real estate in more than one state, which can otherwise mean probate in each.
- Want money for young children or a family member with special needs managed over time.
- Have a blended family or want more privacy than a public probate file allows.
A trust only controls assets you actually move into it, so it works alongside a short “pour-over” will rather than replacing one.
Getting started
- List what you own and owe; the Net Worth Check is a quick way to see it all.
- Update beneficiaries on retirement accounts and insurance today. It is free and often takes minutes.
- Decide on an executor, a financial agent, a health care proxy and, if relevant, a guardian.
- Draft the documents with an estate attorney or a reputable state-specific service, and sign them as your state requires.
- Tell people where the documents are, and review them every few years or after major life events.
If you are naming beneficiaries for a new policy, How Much Life Insurance Do You Need? covers sizing the coverage, and the Security Wealth guide shows how these documents fit with the rest of your safety net.
Common questions
Does a beneficiary designation override a will?
Yes. Life insurance, retirement accounts and payable-on-death accounts go to the beneficiaries named on the account forms, regardless of what your will says (though most workplace plans like a 401(k) must pay a current spouse unless the spouse consented in writing to someone else, and in some states divorce automatically revokes an ex-spouse’s designation). That is why keeping those forms current matters so much.
What happens if you die without a will?
Your state’s intestacy laws decide who inherits, and a court appoints someone to manage the estate and, if needed, a guardian for minor children. The result may not match what you would have chosen.
Do I need a trust or just a will?
Many people only need a will plus current beneficiary designations. A revocable trust can help if you own property in several states, want money managed for children over time or value privacy.
What is the difference between a power of attorney and a health care proxy?
A durable financial power of attorney lets someone manage your money and property if you cannot. A health care proxy lets someone make medical decisions for you. They can be the same person, but they are separate documents.
Related guides
Sources
- Introduction to Wills — American Bar Association
- The Probate Process — American Bar Association
- Guides for managing someone else’s money — Consumer Financial Protection Bureau
- Advance care planning — National Institute on Aging
- 2025 Wills and Estate Planning Study — Caring.com
This guide is for informational and educational purposes only. It is not financial, medical, legal, or tax advice. Consult a qualified professional for guidance specific to your situation.
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