By Jared Snider, JD, Partner and Senior Wealth Advisor

Your estate plan serves as the roadmap for what happens to your assets, income and healthcare decisions while you are living and have capacity, in the event you are incapacitated and when you die. A great estate plan gives you and your loved ones the peace of mind that your wishes will be honored and your heirs receive your assets and values without unnecessary hassle.

Without an estate plan, the state steps in with default “intestacy” laws that decide who inherits what, and your family faces probate court,¹ potentially costly legal battles and emotional stress. While many people assume estate planning is only for the very wealthy or much older, in reality, anyone over 18 can start putting basic safeguards in place.

Below, we’ll explain the foundations of an estate plan, common pitfalls and why planning early can save headaches down the road.

Four Key Documents

Estate planning centers on four foundational documents: a pour-over will, a revocable trust, a durable financial power of attorney and a healthcare directive (with a healthcare proxy).

1. Pour-over Will: This acts as a safety net for your trust. It ensures any assets not transferred into your trust during your life are transferred into it upon your death, avoiding probate on those leftovers.²
2. Revocable Trust: This holds your assets during your life and distributes them after death. It helps your heirs avoid probate and gives you the flexibility to update terms at any time.³
3. Durable Financial Power of Attorney: A durable power of attorney lets someone you trust manage your financial affairs if you become unable to do so. If you lose capacity, it ensures your trusted agent can pay bills and keep finances on track.⁴
4. Healthcare Directive & Proxy: This lets you state your medical treatment preferences in advance. A healthcare proxy names someone to make real-time care decisions that align with your wishes, but only if you’re unable to make decisions for yourself.⁵

 Without these documents or a clear plan, probate court is the next step upon death. In an uncontested probate, costs and delays add up quickly. Families can typically rack up $3,000 to $10,000 in fees and face months or years of delay.⁶ If heirs end up disagreeing, costs can skyrocket even higher. People often think these disputes won’t happen because their family gets along, but grief and ambiguity around assets—a vacation home, grandma’s clock, dad’s shotgun—can trigger unforeseen arguments. Intentional planning lets you name the right people to the right roles in your plan, set rules for real estate and investments, and direct heirlooms so that emotional triggers don’t turn into lawsuits.

Why Starting Early Pays Off

Early planning lets you customize your estate strategy to your family’s unique needs and avoid rushed, costly decisions later. For instance, it can make sense to set up one distribution plan for one heir and a different plan for another based on their life circumstances or ability to handle money. We also often see people delay planning because they mistakenly believe they are too young or don’t have enough assets to need one. In reality, any significant assets warrant a plan, and an effective plan is not a set-and-forget exercise. Laws change, families change and your own wishes evolve, so you should review your plan every five years or so. Those discussions let you confirm that your chosen executor or healthcare proxy still makes sense and adjust for new circumstances, whether it’s a change in family dynamics or the passing of someone you named. The process to create and implement an estate plan can take anywhere from 30 to 90 days, depending on complexity.

 Beneficiary Designations and Tax Considerations

Some assume naming beneficiaries on accounts⁷ or using transfer-on-death deeds⁸ is enough. In reality, those tools give heirs immediate control without protections against divorce, bankruptcy or lawsuits. Transfer-on-death deeds must meet strict state requirements or they can fail entirely. If you later update your trust or will without revising those designations, conflicting instructions can send your family back to probate. Debt on real estate can be another complicating factor.⁹ While these shortcuts might avoid probate, they offer no guardrails for heirs and can prove to be a big headache. 

The four key documents we discussed above do not address taxes. There are a number of effective strategies that can meaningfully reduce or eliminate estate taxes and ensure your assets pass to the people and organizations important to you instead of to the government. If your combined net worth exceeds the current federal exemption (about $28 million for a married couple¹⁰), you’ll need advanced strategies and discussions with an advisor.

Ultimately, estate planning is similar to building a house. Without a solid blueprint and foundation laid out at the start, you end up patching leaky roofs, fixing broken plumbing and wrestling with sticking doors. By working with your advisor up front to identify and execute on your wishes, you can set your family up for success with an estate “house” that weathers the changes life brings.

Sources

1. Investopedia (7/30/24) – Probate Court: Definition and What Goes Through Probate
2. NerdWallet (3/7/24) – What Is a Pour-Over Will and How Does It Work?
3. Consumer Financial Protection Bureau (5/14/24) – What is a revocable living trust?
4. Nolo (2/8/23) – Durable Financial Power of Attorney: How It Works
5. National Institute on Aging (data as of 6/3/25) – Choosing A Health Care Proxy
6. Everything Probate (9/1/24) – Expected Fees and Costs to Probate
7. Business Insider (7/23/24) – Understanding Bank Account Beneficiaries
8. NerdWallet (6/19/24) – Transfer on Death Deed: Overview and Guide
9. The Wall Street Journal (5/10/25) – When Leaving the House to Your Heirs Backfires
10. Kiplinger (5/22/25) – The 2025 Estate Tax Exemption

Exencial Wealth Advisors is an SEC registered investment adviser. Any references to the terms “registered investment adviser” or “registered,” do not imply that Exencial or any person associated with Exencial has achieved a certain level of skill or training.