Estate Planning Basics: Key Documents Everyone Should Understand

October 23, 2025

Estate planning is one of those topics people often put off. It feels complex, maybe even a little uncomfortable. But at its core, estate planning is simply about making sure your wishes are honored, your loved ones are cared for, and your affairs are handled smoothly if something happens to you. Whether you have significant assets or modest ones, a thoughtful plan can prevent confusion, reduce taxes, and give your family peace of mind.

Here’s a straightforward look at the essential estate planning documents everyone should understand.

The Will: The Foundation of Every Estate Plan

A last will and testament is the most familiar estate planning document. It directs how your assets (such as money, real estate, and personal belongings) should be distributed after your death.

In your will, you also name an executor, the person responsible for carrying out your wishes and managing the estate’s legal and financial process. For parents, the will is also where you designate a guardian for minor children, a crucial step many overlook.

One important note: a will must go through probate, a court-supervised process that validates it and oversees distribution. Probate can take months and involves public records and court fees. That’s why many people pair a will with a revocable living trust to streamline things.

The Revocable Living Trust: Avoiding Probate and Adding Flexibility

A revocable living trust is one of the most powerful estate planning tools available. It serves a similar purpose as a will, directing where your assets go, but it does so privately and often more efficiently.

Here’s how it works: during your lifetime, you transfer ownership of your assets (such as your home or investment accounts) into the trust. You remain the trustee, maintaining full control over everything. You can change, add, or remove assets at any time, hence “revocable.”

When you pass away, your successor trustee steps in to distribute assets according to your instructions, without court involvement. This avoids probate, reduces delay, and keeps your affairs private.

Trusts can also offer additional benefits, such as:

• Managing assets for minor children or beneficiaries who aren’t ready to handle an inheritance.
• Planning for blended families or second marriages.
• Providing for loved ones with special needs without disrupting public benefits.

Power of Attorney: Managing Finances if You Can’t

A financial power of attorney (POA) allows someone you trust, called your agent, to act on your behalf in financial and legal matters if you’re unable to do so.

Your agent can handle things like paying bills, managing investments, filing taxes, or selling property. Without a POA, your family might have to go through an expensive and time-consuming court process to gain control of your finances if you become unable to manage them yourself.

Healthcare Power of Attorney and Living Will

Estate planning isn’t just about what happens after you pass away; it’s also about what happens if you’re alive but unable to communicate.

A healthcare power of attorney lets you designate someone to make medical decisions on your behalf if you can’t. This person can discuss treatment options with doctors and ensure your medical care aligns with your values and preferences.

A living will (or advance directive) goes hand in hand with this document. It outlines your wishes for end-of-life care; for example, whether you want life support, artificial nutrition, or resuscitation if you’re terminally ill or in a persistent vegetative state.

Together, these documents remove the burden of tough medical decisions from loved ones and make your wishes clear.

Beneficiary Designations and Asset Titling

Not all assets pass through your will or trust. Many accounts—like retirement plans, life insurance policies, and payable-on-death bank accounts—transfer directly to named beneficiaries.

That means keeping beneficiary designations up to date is an essential part of estate planning. A mistake here (like an ex-spouse still listed as a beneficiary) can override what your will says.

It’s also important to review how your assets are titled. For instance, jointly owned property may automatically pass to the surviving owner, which could affect your overall plan.

Protecting Your Digital Assets

Many adults of all ages now have an extensive online presence, from social media accounts to email addresses. Including provisions for your digital assets in your estate plan can ensure their proper management after you’re gone. You can designate someone you trust to manage your accounts on your behalf in your will or through special designations in accordance with specific sites (notably, social media).

Final Thoughts

Estate planning isn’t only for the wealthy or elderly—it’s for anyone who wants to protect their loved ones and maintain control over what happens to their assets and healthcare decisions. If you’re in your 20s and 30s, you’re likely making some major life decisions such as buying a house, getting married, or starting a family. Drafting a plan will ensure your wishes are honored and minimize stress for loved ones during difficult times. With a well-crafted will, trust, and supporting documents, you can make a difficult time much easier for those you care about most.

Taking the time now to meet with an experienced estate planning professional can provide clarity, confidence, and lasting peace of mind. Please reach out to Iowa State Bank Trust & Wealth Management to discuss how we can assist as a fiduciary in your estate planning journey.

Get started today with our Assets & Liabilities Balance Sheet free download! This tool can help provide a clear snapshot of your financials in the early estate planning process.

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Dylan Dinkla, J.D., CFP®, VP and Trust Administration Manager