What Makes a Good Estate Plan?

Many people have a will and think that’s all they need for their estate planning. However, a will is only part of what makes a good estate plan. With proper estate planning, you can provide for your family members and loved ones without burdening them with estate taxes and the probate process. A good estate plan can include trusts, powers of attorney, and other estate planning documents.

For legal advice about what makes a good estate plan where you live, contact an experienced estate planning lawyer.

What Is a Comprehensive Estate Plan?

Of all the worries that can accompany the idea of setting up an estate plan, there’s one that Redwood City attorney Melissa R. Karlsten hears the most.

“Many of my clients will admit to worrying that if they don’t do an estate plan, it’s all going to go to the government,” she says. “In all my years of practice, that’s never happened. You have to basically die with no relations living on this planet.”

In fact, when she initially meets with prospective clients—which she always does in person—that’s something she’s sure to cover: “What’s the worst thing that could happen if you don’t have an estate plan when you die? If you’re married, it goes to your spouse. If you have kids, it might be divided between your spouse and your kids,” Karlsten says.

If you’re married and a property is jointly owned with right of survivorship, it passes to your spouse automatically. However, generally speaking, a will does not avoid probate; it serves as a guide for the court during the probate process. But if that real estate is just in your name, even with a will, the property will most likely have to go through the probate process.

“The way to avoid that is you create a trust,” says Alejandra Rodriguez, an estate planning attorney. “You transfer the property into the trust. And by doing that, now we avoid probate.”

Rodriguez estimates that 90% of estate-planning clients choose the trust option. She adds that it’s not the value of the assets that determines which way they go; it’s the type of assets, as well as the type of beneficiaries.

For someone with two minor children and a life insurance policy worth $200,000, she says, “having a trust would be beneficial because you want to make sure that your minor children are taken care of. And you do that by putting the proceeds of that life insurance policy into the trust for their benefit. 

On the flip side, if an unmarried person has a $10 million policy but no kids and just wants everything to go to charity, maybe that person is going to say, ‘Ah, I just want to keep it simple. I’m just going to do my will. I’ll just name the charity directly on that life insurance policy and be done with it.'”

Avoiding Probate Court

There are many reasons you want to avoid probate court, says Rodriguez. But two of the biggest are fairly simple to understand: time and money.

In San Diego, Rodriguez says, “it’s averaging a year, a year and a half [to go through probate], and that’s for really easy estates. It’s not that it’s an extremely difficult process; it’s just that—at least in San Diego—there are only three probate judges. So it does take a while to get a hearing date and work your way through the processes that need to happen.”

And then there’s the money. The probate code has a statutory fee schedule that determines the fees for the attorney and the executor, and it’s the same for both. “So it’s a double whammy. You’re paying it twice: a fee to an attorney and to the administrator,” Rodriguez says. “It’s really, really expensive.”

As an example, Rodriguez posits a home with a market value of $1 million going through probate. “Attorney fees would be $23,000, and executor fees or administrator fees would be another $23,000. So really it’s about $46,000 in fees for a million-dollar home,” she says.

This is regardless of how much equity is in the home. “If the fair market value is a million dollars, but you have a mortgage of 800,000, it doesn’t matter; the fees are still going to be based on the million-dollar fair market value. So that’s another hit to the family members that’s not so pleasant.”

Planning for Incapacity

A durable power of attorney is an important measure to protect assets at a time when an individual is incapacitated. When an individual becomes incapacitated due to a disease, accident, or other illness, they cannot handle their finances or make important healthcare decisions. With a power of attorney, you can designate someone to handle your financial affairs and get access to your bank accounts and other financial accounts.

A healthcare power of attorney can designate someone to make end-of-life, medical treatment, and life support decisions according to your wishes. Similarly, a durable power of attorney can designate someone to handle specific functions, like handling finances, when the individual is unable.

Setting Up a Trust

There are many different types of trusts, including special needs, charitable, revocable, and irrevocable trusts. But for most clients, Rodriguez recommends a living trust.

Within the legal document, she says, there are three different roles:

• The creator of the trust, or trustor
• The administrator of the trust, or trustee
• Beneficiary designations

When a person is creating a trust for the first time, she adds, “They’re going to be filling all three roles. They’re the trustee of their trust. They’re going to continue to be the trustee of their own trust. During their life, they’re going to continue being the beneficiary of all of their assets.”

You could say the trustor is also a casting director since they have to figure out who plays the other roles once they’re gone or incapacitated. Rodriguez recommends naming not just one successor trustee but several alternates in case anything happens to the first. Beneficiaries can be as simple or complex as you’d like them to be.

The trust is what Rodriguez calls the first pillar of the four pillars of a trust plan. Two of the others are: a financial power of attorney and an advance healthcare directive. These documents are for when you become incapacitated and can no longer manage your own affairs. The fourth is a pour-over will—in the event, Rodriguez says, you forget about an asset or acquire something after you created the trust and never got around to adding it. Since this asset will probably have to go through probate, the pour-over will “let the judge know this is just going to get transferred right into the trust,” Rodriguez says.

Generally, you want the successor trustee and the power of attorney (POA) agent to be the same person, Rodriguez says. “If you’re incapacitated, it makes it easier when the same person is managing things inside of the trust and things outside of the trust.” This is less true for the healthcare directive, she adds. “The qualities you’re looking for in someone to manage your financial decisions are very different than the qualities of a person you feel is best equipped to make medical decisions on your behalf.”

Estate Taxes and Tax Planning

For most people, federal estate taxes are not an issue. The current federal estate tax exemption is $13.99 million (in 2025). This means if the total value of your estate is under this amount, your estate is not subject to the federal estate tax. However, many states have estate tax, inheritance tax, or gift tax laws that could affect the estate planning process. Talk to a trusts and estates lawyer or financial advisor to minimize the income tax burden on your designated beneficiaries.

Why You Need a Qualified Estate Planning Lawyer

Once you have an estate plan in place, it is crucial to review it every three to five years. And with handy tools like an online calendar, it’s become quite breezy to set up recurring reminders. Karlsten also recommends pulling out your estate planning documents every time a major life event occurs. Major life events include when your children hit 18, if there’s been a divorce, a death, a birth, or even winning a lottery ticket.

What if you or a loved one has been diagnosed with Alzheimer’s or dementia, and you don’t have a plan in place yet?

“That doesn’t mean they don’t have the capacity to do an estate plan. Particularly a will, because it’s a very low-level standard of capacity,” Karlsten says. There are three things a person needs in order to sign a will:

• They need to know that the document they’re doing is a testamentary document, as opposed to a crossword puzzle, etc.
• They need to have a general sense of what their assets are.
• They need to know who the objects of their bounty are—meaning relatives, friends, etc.

Karlsten also recommends meeting with an experienced attorney to get the ball rolling on an estate plan before you may be in desperate need of one.

“It’s really important to get this stuff done before you’re at that precipice,” Karlsten says. “People don’t want to face their mortality; I don’t want to face my mortality. Whether it’s the money, or the conversation, or that I’m a stranger, it takes a lot for people to come in and see me. Imagine now that you also get a devastating diagnosis of dementia. Is this what you’re going to want to deal with? That’s why you should deal with this before it gets to that point.”

When you do decide to set up an estate plan, Karlsten can put one in place in four to six weeks. “I typically quote—for a will and a trust, and powers of attorney, including healthcare directives—for a married couple, somewhere between $3,000 to $3,500,” she says. “It’s less if you’re a single person—about $2,000 to $2,500. I bill by the hour, but there are plenty of attorneys who do fixed fees.”

Finding an Estate Plan Lawyer

Life planning includes more than just a retirement plan and a last will and testament. Estate planning can provide for your loved ones and give you peace of mind. For legal advice about what important documents you need for an estate plan, talk to an experienced attorney. Contact a local estate planning attorney for legal advice.