Estate Planning Basics: What Every Retiree Needs to Know

Seventy percent of Americans don't have a will. If you're one of them, your state decides who gets your money. Your state decides who raises your grandchildren. Your state decides who makes your medical decisions when you can't speak for yourself.

That's not a hypothetical. It's the law. When someone dies without an estate plan — the legal term is "intestate" — a probate court applies a rigid formula. Surviving spouse gets a portion. Children split the rest. If there's no spouse or children, it goes to parents, then siblings, then distant relatives. A long-term partner you never married? They get nothing. A charity you've supported for decades? Nothing. The grandchild you've been helping with college? Nothing, unless they happen to be next in the legal line of succession.

Estate planning isn't about being wealthy. It's about being intentional. And it starts with five documents that every retiree should have in place.

Document one: the will

A will is the foundation. It states who inherits your assets, who serves as executor to manage the process, and — critically — who becomes guardian of any minor dependents. Without a will, a judge makes all of these decisions.

Many retirees assume they don't need a will because their assets will pass through beneficiary designations or joint ownership. And they're partially right — retirement accounts, life insurance, and jointly titled property do bypass the will. But a will catches everything else: personal property, vehicles, real estate titled in your name alone, and any asset that doesn't have a built-in transfer mechanism.

A simple will for a married couple costs $300–$600 through an estate attorney. Online services run $100–$200 but lack personalized legal advice. For most retirees with straightforward situations — married, adult children, no blended family complications — a basic will is sufficient.

The most important thing about a will is having one. The second most important thing is updating it.

Document two: the revocable living trust

If a will is the foundation, a trust is the upgrade. A revocable living trust holds your assets during your lifetime and transfers them to your beneficiaries when you die — without probate. No court supervision. No public record. No six-to-eighteen-month waiting period.

You serve as your own trustee, maintaining full control. You can buy, sell, modify, or revoke the trust at any time. When you die or become incapacitated, a successor trustee you've chosen steps in and manages the distribution according to your instructions.

Not everyone needs a trust. If your estate is small enough to qualify for your state's simplified probate procedures, or if most of your wealth is in accounts with beneficiary designations, a trust may be unnecessary overhead. But if you own real estate, have assets in multiple states, or want to control the timing of distributions — say, holding money in trust for grandchildren until they reach 25 — a revocable living trust is the right tool. Our guide on how to avoid probate walks through when a trust makes sense versus simpler alternatives.

A trust for a couple typically costs $1,500–$3,000. It's not cheap, but it's almost always less than probate fees on a $500,000+ estate. For a deeper dive into how family trusts work, see our family trust guide.

Document three: durable power of attorney

This is the document people forget until it's too late.

A durable power of attorney (DPOA) names someone to make financial decisions on your behalf if you become incapacitated. Pay bills. Manage investments. File tax returns. Handle insurance claims. Without one, your family has to petition a court for guardianship — a process that takes months, costs thousands, and strips you of legal autonomy.

"Durable" means the power of attorney survives your incapacity. A regular power of attorney becomes invalid the moment you can't make decisions for yourself — precisely when you need it most. Always specify "durable."

Choose someone you trust completely. This person will have access to your bank accounts, your investment portfolio, and your financial life. Most people name a spouse first and an adult child as backup. Some name a professional fiduciary or an attorney.

A durable power of attorney costs $100–$300 when prepared by an attorney, and it is often included as part of an estate planning package.

Document four: healthcare proxy

A healthcare proxy — also called a medical power of attorney — names someone to make medical decisions when you can't. This is separate from the financial power of attorney and equally critical.

Without a healthcare proxy, doctors turn to state law to determine who makes decisions. In most states, the default hierarchy is spouse, then adult children, then parents, then siblings. This usually works, but it falls apart when family members disagree. If your three children can't agree on whether to continue aggressive treatment, the hospital may have to go to court for guidance. That's a nightmare no family should face during a medical crisis.

Your healthcare proxy should be someone who understands your values, can handle pressure, and is willing to make hard decisions. It doesn't have to be the same person as your financial power of attorney. In fact, some families deliberately split the roles — the child who's good with money handles finances, the child who's a nurse handles medical decisions.

Have an honest conversation with your proxy. Tell them what matters to you. Tell them what you'd want if the prognosis is terminal. Tell them whether quality of life or length of life matters more. This conversation is uncomfortable, but it's far less painful than leaving them to guess.

Document five: the living will

A living will — also called an advance directive — puts your end-of-life wishes in writing. Unlike a healthcare proxy, which names a person to decide, a living will states your decisions directly. Do you want to be kept on life support if there's no reasonable chance of recovery? Do you want artificial nutrition and hydration? Do you want pain management even if it hastens death?

These aren't abstract questions for retirees. The older you get, the more likely you'll face a medical situation where these directives matter.

A living will works alongside a healthcare proxy. The living will provides the instructions; the proxy ensures someone is authorized to enforce them. Together, they cover the full spectrum of medical decision-making.

Most states have free advance directive forms available through their health department or through organizations like Five Wishes. An attorney can prepare one as part of your estate plan for $100–$200, but the free forms are legally valid in most jurisdictions.

The document that overrides everything: beneficiary designations

Here's what surprises most people — beneficiary designations override your will and your trust. If your will says "everything to my children" but your IRA beneficiary form names your ex-spouse, the ex-spouse gets the IRA. The will doesn't matter. The trust doesn't matter. The beneficiary form controls.

This makes beneficiary designations arguably the most important piece of your estate plan, and they're the easiest to get wrong. People fill out forms when they open accounts and never look at them again. Marriages end. Spouses die. Children are born. But the form from 2008 stays the same.

Review every beneficiary designation you have — 401(k), IRA, life insurance, annuities, pension, HSA, and any account with a transfer-on-death registration. Make sure primary and contingent beneficiaries are current. Make sure percentages add up to 100%. Make sure the names match legal names, not nicknames.

Do this every two to three years and after every major life event: marriage, divorce, death of a beneficiary, birth of a grandchild, or significant changes in financial circumstances.

When should you update your estate plan?

An estate plan isn't a one-time event. It's a living system that needs maintenance. Review it when any of these occur:

Life changes. Marriage, divorce, death of a spouse or beneficiary, new grandchildren, a child's marriage or divorce, a move to a different state.

Financial changes. Significant increase or decrease in assets, sale of a business, inheritance received, purchase or sale of real estate.

Law changes. Tax law changes can affect estate and gift tax thresholds, trust taxation, and retirement account rules. The 2026 gift tax rules are a current example — the estate tax exemption is scheduled to drop significantly, which could affect families who previously weren't concerned about estate taxes.

Health changes. A diagnosis that changes your life expectancy or care needs may require updates to healthcare directives, trustee selections, or distribution timelines.

At minimum, review your entire estate plan every three to five years, even if nothing obvious has changed. Laws shift. Relationships evolve. Assets grow or shrink. The plan you made at 60 may not fit at 75.

What about digital assets?

Your digital life has financial value. Email accounts, social media profiles, cloud storage with family photos, cryptocurrency wallets, online banking, subscription services, domain names, and digital businesses all need a plan.

Start by creating an inventory of your digital accounts, including usernames and instructions for accessing them. Store this securely — a password manager with a master password shared with your executor, or a sealed letter in a safe deposit box.

Name a "digital executor" in your will or power of attorney who has authority to manage online accounts. Some states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which gives executors limited access to digital accounts. But platform-specific policies vary widely. Google, Facebook, and Apple all have their own procedures for handling accounts after death.

How much does estate planning cost?

For a straightforward situation — married couple, adult children, no blended family, moderate assets:

Many estate attorneys offer packages that include all five documents together at a lower combined price than purchasing each separately.

You don't need a $5,000 estate plan if your situation is simple. A married couple with a paid-off home, retirement accounts with current beneficiary designations, and adult children may only need a will, powers of attorney, and advance directives — a $500–$1,000 package. Add a trust if you own property in multiple states or want to avoid probate on a valuable home.

The most expensive estate plan is no estate plan. Probate alone can cost 2–5% of your estate's value. A contested guardianship for a parent without a healthcare proxy can run $10,000–$50,000. The cost of planning is always less than the cost of not planning.

Not sure which estate planning documents you need — or whether your current plan still fits? Connect with a financial advisor who can review your situation and help you protect what matters most.