The 4 Essential Estate Planning Documents Everyone Should Have
No one likes to imagine a time when they might be sick or unable to make decisions for themselves. It ranks somewhere between cleaning out the garage and scheduling a long-overdue physical—important, but easy to postpone.
Yet planning for these possibilities can make all the difference.
Without a clear legal framework in place, the state may step in and appoint a guardian to make financial and medical decisions on your behalf. Someone you didn’t choose could ultimately decide where you live, how your money is managed or what medical treatments you receive.
That’s a situation most people would prefer to avoid.
Incapacity exists on a spectrum. It might involve cognitive decline from Alzheimer’s or dementia, physical incapacity after an injury or illness, a sudden medical event such as a stroke or a gradual decline over time.
Because these situations can unfold in many different ways—and at different stages of life—having the right legal structure in place is essential.
At a minimum, every adult should have four foundational documents in place:
Durable Power of Attorney
Health Care Proxy
Living Will
Will or Revocable Living Trust
You may already have one or two of these documents completed, but comprehensive planning requires all four. Together, they create a coordinated safety net. Without one, gaps can appear.
It’s a bit like living near a river and purchasing homeowner’s insurance while skipping flood coverage. You’re mostly protected… until you’re not.
1. Durable Power of Attorney
A Durable Power of Attorney (DPOA) authorizes someone—known as your agent or attorney-in-fact—to manage financial matters on your behalf.
The word durable is critical. It means the document remains valid even if you become mentally incapacitated.
Your agent may be authorized to handle:
Paying bills
Managing bank accounts
Overseeing investments
Handling business interests
Signing financial documents
Choosing the right person for this role is important. Look for someone who is:
Financially responsible
Trustworthy
Organized
Capable of navigating potential family disagreements
Many people select a spouse or adult child. If those options don’t feel appropriate, another trusted individual—or even a professional fiduciary—may be a better fit.
It’s also wise to designate a backup agent in case your first choice is unavailable when needed.
2. Health Care Proxy
A Health Care Proxy designates someone to make medical decisions on your behalf if you are unable to make them yourself.
This document typically becomes active when a physician determines that you lack the capacity to make decisions.
Your chosen agent may then make decisions regarding:
Medical treatments
Surgeries
Medications
Long-term care facilities
Rehabilitation care
In some states, end-of-life decisions
Ideally, these decisions are guided by your known wishes—or the agent’s best understanding of what you would want.
Spouses and adult children are common choices, but the most important qualities are:
emotional stability under pressure
ability to communicate with medical professionals
willingness to advocate for you when necessary
Some families choose different people for financial and medical decisions, which can provide helpful checks and balances and prevent one individual from carrying the entire burden.
3. Living Will
A Living Will works alongside your health care proxy by documenting your preferences for medical care in specific situations.
Rather than leaving decisions entirely to your agent, this document outlines your wishes regarding treatments such as:
Life-support measures
Resuscitation
Artificial nutrition or hydration
Care in case of a terminal condition
Treatment during a persistent vegetative state
You don’t need to name an agent in this document. Instead, it provides written guidance for both your health care proxy and your medical providers.
Many individuals find it helpful to prepare a living will in consultation with their physician and estate attorney. Frameworks such as “Five Wishes” can also help clarify personal values and priorities surrounding end-of-life care.
4. Will or Revocable Living Trust
Your estate plan should also include a Will or Revocable Living Trust to determine how your assets will be handled after death—and in some cases during incapacity.
A will outlines:
How property should be distributed after death
Who will serve as executor of your estate
Guardians for minor children
A revocable living trust goes a step further.
With this structure, you transfer assets into a trust during your lifetime while typically naming yourself as the initial trustee, allowing you to maintain full control.
If you become incapacitated or pass away, a successor trustee can step in and manage or distribute assets according to your instructions.
Trusts often provide several advantages:
Avoidance of probate
Faster asset distribution
Greater privacy
Potentially lower administrative costs
There are several types of revocable trusts. We often collaborate with estate attorneys to determine which structure best aligns with a client’s goals and family situation.
Planning That Stays Current
No single document covers every phase of incapacity or death. The goal is to have all four documents in place, kept current and accessible to the people who may need them.
One important area these documents do not address is beneficiary designations on retirement accounts and life insurance policies. These designations override instructions in a will, so it’s critical they remain aligned with your overall estate plan.
Finally, remember that life is dynamic. Laws evolve, financial circumstances change and families grow.
Your estate plan should be reviewed periodically—especially after major life events such as:
Marriage or divorce
The birth of a child or grandchild
Relocation to another state
Significant changes in wealth
Retirement
Keeping these documents up to date ensures your wishes remain clear and your family is protected.
Questions? We offer a complimentary 15-minute call to discuss your concerns and explore how we can assist you.
A Weekly Perspective on Planning and Markets
Each week, we share The Week in Review — a short collection of articles on
financial planning and wealth management, along with a brief overview for context.
One email per week. No promotions, no sales – just clarity.
This material was written in collaboration with artificial intelligence (ChatGPT) and derived from sources believed to be correct.
Stordahl Capital Management, Inc is a Registered Investment Adviser. This commentary is solely for informational purposes and reflects the personal opinions, viewpoints, and analyses of Stordahl Capital Management, Inc. and should not be regarded as a description of advisory services or performance returns of any SCM Clients. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advisory services are only offered to clients or prospective clients where Stordahl Capital Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Stordahl Capital Management unless a client service agreement is in place. Stordahl Capital Management, Inc provides links for your convenience to websites produced by other providers or industry-related material. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third-party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax, or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.