What estate planning actually means

• A will. Who inherits, who carries it out, and who raises your children. See What is a will?
• A durable power of attorney. Names someone to handle money and property if you cannot — paying bills, dealing with the bank. Without one, your family may need a court to appoint someone.
• A healthcare proxy (sometimes called a healthcare power of attorney). Names someone to make medical decisions if you can't speak for yourself.
• A living will or advance directive. Says what treatment you would and wouldn't want, so nobody has to guess.

The last three matter while you are alive. A will does nothing until you die, which is the single most common misunderstanding here.

Some of the largest assets pass outside your will entirely, straight to whoever is named on the account:

• Life insurance payouts
• Retirement accounts — 401(k), IRA, pensions
• Anything with a "payable on death" or "transfer on death" instruction
• Property owned jointly with right of survivorship

Check those beneficiary designations. They override your will, and they are frequently decades out of date — naming an ex-spouse, or a parent who has since died. It is the cheapest and most commonly skipped hour of estate planning there is.

Make a list of what you have and where it is. Accounts, property, insurance, debts, and the people involved — that alone puts you ahead of most families, and it is the part only you can do. Then get the four documents drawn up, and tell the people you have named that you have named them.

Review it after anything big: a marriage, a divorce, a birth, a death, a house, a move to another state.