Estate planning is one of the most important financial steps you can take for your family, yet many people assume it only matters if you owe estate taxes. For 2026, the federal estate tax basic exclusion amount is $15 million per individual, up from $13.99 million in 2025, according to IRS inflation adjustments for tax year 2026. Portability lets a married couple combine their exclusions to shelter even more, so it is easy to conclude that estate planning is reserved for the ultra-wealthy. That conclusion is wrong, and it could leave your family exposed to unnecessary complications, costs, and conflict.
Estate taxes represent just one piece of a much larger puzzle. A sound plan addresses who inherits your assets, who makes decisions on your behalf if you become incapacitated, and who raises your children if the worst happens. These concerns apply to virtually every adult, regardless of net worth. For business owners in particular, coordinating an estate plan with tax advisory services helps protect both family and enterprise.
Why you need a will even if you owe no estate taxes
Surveys consistently find that most American adults do not have a will. In its 2025 Wills and Estate Planning Study, Caring.com reported that only about one in four adults had a will, meaning roughly three quarters had no plan in place. Many assume that joint ownership of bank accounts, brokerage accounts, and real estate will take care of asset transfers automatically. For certain assets, including retirement plans, life insurance policies, and jointly held property with right of survivorship, that assumption is partially correct. These accounts pass to named beneficiaries or surviving joint owners outside of the probate process.
A will covers everything else. Your ownership interest in a business, your vehicles, furniture, jewelry, collectibles, and any other personal property all need clear direction. If you die intestate, the legal term for dying without a will, the laws of your state of residence decide who receives these items. Most state intestacy statutes split assets between a surviving spouse and surviving children, which may not reflect your actual wishes.
Writing a will gives you control over asset distribution, lets you name an executor you trust, and ensures that your personal property goes where you intend. The cost and effort of creating a basic will are modest compared to the confusion and expense your family may face without one.
Choosing a revocable living trust over probate
Even with a valid will, the probate court in your state must approve the distribution of assets. Probate is a public legal process, which means your will, asset inventory, and beneficiary information become part of the public record. Neighbors, business competitors, and distant relatives can all access these details.
Probate also carries costs. The court and any administrators it appoints will charge fees, and those fees typically increase with the size of the estate. For families who want privacy and want to minimize administrative expenses, a revocable living trust offers a practical alternative.
A revocable living trust functions as a substitute for a will in many respects. You transfer ownership of your assets into the trust during your lifetime, name yourself as the initial trustee, and designate a successor trustee to manage and distribute assets after your death. Because the trust, not you personally, owns the assets, they pass to your beneficiaries without going through probate. Your attorney can help you determine whether a trust makes sense for your situation, and the estate planning documents involved are straightforward to set up with professional guidance.
Naming a guardian for minor children
For parents of young children, naming a guardian may be the single most important reason to complete an estate planning checklist. If both parents die in a common accident and no guardian is named in a will, the probate court makes that decision. A judge who has never met your family will choose who raises your children based on legal standards, not your personal knowledge of which family member or friend is the best fit.
Naming a guardian in your will eliminates that uncertainty. You select someone whose values, parenting style, and financial stability align with what you want for your children. You can also name an alternate guardian in case your first choice is unable or unwilling to serve. This decision alone justifies the time and expense of creating a will, even if you own very few assets.
Healthcare directives and power of attorney protect you while you are alive
Your plan is not only about what happens after you die. Two critical documents, an advance directive and a power of attorney, protect you during your lifetime if you become unable to make decisions for yourself.
An advance healthcare directive, sometimes called a living will, spells out the medical treatments you want, and do not want, if you are incapacitated due to illness or injury. Without this document, your family may face agonizing decisions with no guidance, and disagreements among family members can lead to court battles.
A durable power of attorney authorizes a person you trust to manage your financial and business affairs if you cannot do so yourself. This includes paying bills, managing investments, filing tax returns, and handling real estate transactions. The IRS even allows an agent to sign and file a return on your behalf when a properly executed power of attorney is on file, as described in IRS guidance on third-party authorizations. Without a power of attorney in place, your family may need to petition the court for a conservatorship, which is time-consuming, expensive, and public.
Both documents should be prepared by an attorney who understands your state’s requirements, and both should be reviewed whenever your circumstances change.
When to review and update your estate plan
Creating an estate plan is not a one-time event. Life changes such as births, deaths, marriages, divorces, retirement, and significant shifts in net worth can make your existing documents outdated or even counterproductive. At a minimum, you should review your estate planning documents every five years, and you should review them immediately after any major life event. Periodic exemption changes also matter: the IRS publishes the annual figures in its estate tax guidance, so confirm your plan still aligns with current law.
During each review, pay close attention to several key areas. First, confirm that the people you named as executor of your estate and guardian of your minor children are still the right choices. Are they willing and able to serve? Have your relationships changed? Second, check the beneficiary designations on every retirement account. These designations override your will, so an outdated beneficiary form can send retirement assets to an ex-spouse or a deceased relative’s estate instead of your current family. Third, review your life insurance beneficiary designations. If a primary purpose of your life insurance is funding the care and education of your minor children, confirm that the proceeds will reach the right people through your estate plan’s structure, whether that means naming a trust as beneficiary or coordinating with your guardian’s responsibilities.
Keeping your estate plan current costs far less than the legal disputes and family conflict that arise from outdated documents.
Estate planning is for every family, not just the wealthy
The rise in estate tax exemptions has been a positive development for families with substantial assets, but it has also created a dangerous misconception. Many people now believe that if they do not owe estate taxes, they do not need a plan. In reality, taxes were never the only reason, or even the primary reason, to plan your estate.
A comprehensive estate plan ensures your assets go to the people you choose, protects your children by naming a guardian, keeps your financial affairs private through trusts, and prepares for the possibility that you may need someone to make medical or financial decisions on your behalf. These protections matter whether your estate is worth $50,000 or $50 million.
If you have not started your plan, or if your existing documents have not been reviewed in several years, consult with a qualified attorney or CPA. The cost is modest, the process is manageable, and the peace of mind is significant. Pease Bell CPAs can coordinate the tax and financial pieces of your plan through our accounting services, working alongside your attorney to keep everything aligned.
Frequently Asked Questions
Do I need a will if I do not have many assets?
Yes. A will is not just about distributing wealth. It names an executor, directs how personal property is handled, and, most importantly, allows you to name a guardian for minor children. Without a will, state intestacy laws make these decisions for you, and the outcome may not match your wishes.
What is the difference between a will and a revocable living trust?
A will takes effect after you die and must go through probate, which is a public court process. A revocable living trust takes effect during your lifetime and allows assets to pass to beneficiaries without probate, providing greater privacy and often lower administrative costs. Many estate plans include both documents working together.
What estate planning documents does every adult need?
At a minimum, every adult should have a will, an advance healthcare directive (living will), and a durable power of attorney. Depending on your assets and family situation, you may also benefit from a revocable living trust, life insurance beneficiary reviews, and retirement account beneficiary updates.
How often should I update my estate plan?
Review your estate planning documents at least every five years and immediately after any major life event such as a marriage, divorce, birth of a child, death of a beneficiary, or significant change in your financial situation. Outdated documents can create unintended consequences that are expensive and emotionally painful to resolve.
What happens if I die without a will?
If you die intestate, your state’s laws determine who inherits your assets. Most states split property between a surviving spouse and children, but the exact formula varies. You lose control over asset distribution, the court appoints an administrator, and the process is typically slower and more costly than settling a will-based estate.
Why is a power of attorney important for estate planning?
A durable power of attorney allows someone you trust to manage your finances if you become incapacitated. Without one, your family must petition a court for conservatorship, a process that is public, expensive, and time-consuming. Having this document in place ensures your bills get paid, investments are managed, and financial decisions are handled according to your preferences.
