Estate planning: A values-first guide (2025-2026)

It's easy to postpone estate planning until an indefinite "someday," but taking control of your legacy is something you don't want to ignore. By communicating your wishes and clarifying who will receive your assets when you're gone, you're securing your family's future—and giving yourself peace of mind.

Getting a handle on the basics will empower you to make the best choices for you and the people you love. This guide will help you learn what estate planning is, why it matters and how to get started with confidence.

Estate planning is the process of organizing your assets and legal documents to ensure your wishes are honored after death or incapacity. The word "estate" may bring to mind wealthy families with mansions full of expensive belongings, but the reality is that everyone has an estate. The term simply refers to the collection of assets and debts you have when you pass away. These may include bank accounts, investments, real estate, life insurance, retirement accounts, digital assets, jewelry and other possessions.

A good estate plan clarifies your intentions and identifies who will receive your assets when you die, so your family and friends aren't left dealing with a financial mess during an already emotionally turbulent time. Without a plan, assets may go through probate court—a process that can be slow, costly and may lead to disputes among loved ones or even loss of privacy.

Proper estate planning also allows you to continue supporting the faith communities and charities that matter most to you, even after you're gone. By designating which recipients will receive assets and how, you can help solidify your legacy for years or even decades to come.

A solid financial plan allows you to manage and grow your wealth in a way that’s consistent with your values. But to ensure your money and possessions are protected and distributed according to your wishes when you’re no longer around, you also need careful estate planning.

One of the first steps in that journey is to create an asset inventory that gives you a clear picture of what you own. A complete list helps you:

• Make decisions about who will receive which of your assets
• Distribute your possessions equitably (if you have multiple beneficiaries)
• Provide for any taxes and debts that you owe
• Make the process of distributing your estate easier for the executor or trustee you appoint

There's no "best" way to take inventory of your assets. You may find that drafting an inventory on paper or with an electronic spreadsheet works well for you. Alternatively, your local probate court may have an online template that lists all the major asset groups and the information you should provide for each one. You even may consider using estate planning software that walks you through the process.

Being as thorough as possible when listing your assets can help your loved ones avoid delays in the probate process, not to mention unnecessary stress. Go through your records—paper and digital—and list every account, policy, property deed, retirement account, insurance policy and business ownership record. Include the financial institution, account type and last four digits of each account number. Also, pull out any property deeds, vehicle titles and business ownership records to see what's in your name and (in the case of a business) what the ownership structure is.

Alternatively, you could take a more gradual approach by adding accounts to your inventory list as you receive statements for them (either by mail or email). Then, do a more thorough check after six months or a year to make sure you've covered all your bases.

Your inventory also should include your digital estate—such as social media accounts, websites, email accounts, cryptocurrency wallets and online payment accounts. Specify who should have access to personal photos, videos and important digital files. Some of your assets, like cryptocurrency wallets and PayPal accounts, may have tangible value. But even personal photos and videos may continue to have emotional significance for your family members; stipulating who gets access can ensure the people you love will continue to enjoy them.

A complete estate plan includes multiple documents that clarify your intentions after you die—or when you're physically or mentally incapable of managing your estate on your own. A basic understanding of each of these estate planning documents will give you more control over future decision-making and help things run more smoothly.

A will is a legal document in which you name the executor who will manage the estate upon your death and explain how your property will be divided. Your will also can include your wishes for burial or cremation and what type of memorial service you would like. You may also name a guardian for any minor children and provide instructions for their care when you're no longer around.

A trust is a legal entity that, under the management of a trustee, holds and distributes your assets for the benefit of the beneficiaries you have chosen. A trust may stipulate, for example, that your minor children only receive assets when they're responsible enough to handle them—or provide for the long-term needs of a disabled child. These arrangements also can serve other estate planning needs, whether minimizing taxes for more affluent families or protecting assets from creditors.

There are two main types of trusts: revocable trusts, which can be changed by the grantor, and irrevocable trusts, which generally cannot be altered. Other trust options include charitable remainder trusts, special needs trusts, and spousal lifetime access trusts. Should you decide to create a trust, an estate planning attorney can help you choose whether a revocable trust or irrevocable trust best suits your needs.

A financial power of attorney (POA) is a document where you name a trusted adult to make financial decisions on your behalf if you experience a serious health ailment that impairs your mental faculties. This person has the authority to pay bills and manage your financial accounts while you're incapacitated. Without a POA, a court has to select a guardian to perform these functions, which can be expensive and time-consuming.

Generally, it makes sense to complete a financial power of attorney if you're an older adult or have serious medical issues that can result in temporary incapacitation. However, you also can use a financial power of attorney to provide for the management of your financial affairs in the short term if, for instance, you're an active-duty service member or otherwise won't be able to perform these functions for a significant length of time.

Similarly, a health care POA is a document where you identify the person who can make decisions on your behalf if you're incapacitated and unable to make a decision on your own. Health care agents, as they're sometimes called, can approve or decline medical procedures for you or carry out your wishes for end-of-life care.

You also may want to create a living will that provides instructions for medical care—whether you want to receive life-saving care like CPR in an emergency, for example—if you are unable to communicate those wishes at the time.

One of the most important parts of your estate plan is identifying the individuals who will be in charge of carrying out your wishes and distributing your assets to the correct people. Of course, select people you can trust to be faithful and keep things running smoothly, especially if there is potential for any family disagreements in the wake of your death. You can choose different people to handle any of these responsibilities—or have the same person take on multiple roles, if they're able.

Among the key players to name in your estate plan are the:

Also called a personal representative, the executor manages your estate after death—filing your will, paying debts, handling taxes and distributing assets according to your instructions.

For more complex estates, you may want to designate a professional who can oversee the process. (Many banks and trust companies offer these trust services.) Should you not have a valid will when you die, the probate court in the state where you resided will name an estate administrator to handle these tasks.

If you decide to establish a trust for your assets, you'll need to designate a trustee—the individual or entity responsible for managing your assets according to the written instructions within your trust. Your trustee should be someone who's capable and whom you have confidence in. If you have a more complicated estate, choosing a professional trustee can take some of the burden off your loved ones.

As mentioned, a power of attorney authorizes individuals (called "agents") to act on your behalf if you're cognitively or physically unable to manage your affairs. You'll need to name two POAs: one for finances and one for health care needs.

When you're incapacitated, your financial agent has the legal authority to pay your bills, manage your accounts and even sell your property if needed. Your health care agent, on the other hand, makes medical decisions that you can't make on your own.

Both your financial and health care agents should be capable and able to handle pressure well. They should be able to communicate well and understand (and be willing to act based on) your values.

A beneficiary is any person or organization whom you select to receive assets from your estate. Some assets, like jointly held bank accounts, investment accounts, retirement accounts and life insurance contracts, automatically will go to the named beneficiary or co-owner, bypassing probate.

But for everything else, it's important to name the people or charities you would like to receive your assets. If you have multiple beneficiaries, make sure to state the specific items or the percentage of your estate you would like them to receive.

You can choose to have your assets distributed "per capita"—that is, split evenly among living descendants in the same generation (typically your children). Or you may prefer them to be given per stirpes, which means they follow the branches of a family tree. In the latter approach, if a named beneficiary dies, their share of the assets are given to their next living descendants.

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While the terms "beneficiary" and "heir" are sometimes used synonymously, they're not actually the same. A beneficiary is someone you personally designate to receive assets—whether it be in a will, trust or other legal document. An heir, on the other hand, is a family member whom the probate court decides is entitled to an inheritance from you, even if you don't have an estate plan in place.

Having a will ensures your belongings go to the people you want them to. You may have a family heirloom that you know a specific child treasures, or perhaps you want a portion of your estate to go to a grandchild. Putting these details in writing, rather than relying on the probate process, is essential to ensuring your wishes are carried out.

When you're building an estate plan, developing a strategy to minimize the long-term tax burden on your heirs is critical. While most families don't have to worry about the federal estate tax, it's a major factor for substantial estates. Even if your estate isn't subject to federal tax, some states impose inheritance or estate taxes with lower thresholds. Understanding the difference between gift tax, estate tax and inheritance tax is key to effective planning.

The IRS allows you to gift a certain amount each year—$19,000 in 2025—to any number of individuals without it counting against your lifetime gift tax exclusion. It's a simple way to reduce the size of your taxable estate while helping those closest to you—such as children or grandchildren—meet their current financial needs.

Any amounts you give in excess of that annual amount will count against your lifetime gift tax exemption, which goes from $13.99 million to $15 million per person in 2026.

Certain trusts—including irrevocable life insurance trusts and spousal lifetime access trusts (SLATs)—can remove assets from your taxable estate, helping minimize the impact of estate or inheritance taxes. An experienced estate planning attorney can help you determine the benefits and potential drawbacks of creating a trust for your beneficiaries.

Donations to an eligible charity or religious institution can lower your taxable income now, and charitable bequests in your will or in a trust can reduce the size of your taxable estate later.

Several states have their own estate or inheritance taxes that have much lower thresholds than the federal one. If your primary residence is in a state with one of these taxes, you may want to consult with an estate planning attorney or tax professional about how you can limit the liability for your heirs.

Estate planning often starts with thinking about your loved ones' needs, but it also can ensure your legacy supports your values and the nonprofits you care about.

If giving to certain charitable organizations or to your church is important to you now, you may wish to continue supporting those entities after you're gone. Here are ways you can continue to make an impact:

• Charitable bequest. You can support nonprofits after your death by listing them as a full or partial beneficiary of a retirement account or life insurance contract. You also can name a charity in your will.
• Charitable trust. A charitable trust can help you support your favorite nonprofit in a tax-advantaged way. For example, a charitable remainder trust allows you or another beneficiary to receive income for a certain period of time, with any remaining assets going to a philanthropic organization or faith community. A charitable lead trust works in the opposite way: A charity receives income from the trust for a period, after which your heirs receive any assets left over.
• Donor-advised fund. A donor-advised fund is a special investment account that allows you to support the charities you're most passionate about while receiving potential income tax deductions on your contributions. You can get the fund started with a gift of cash, stocks, real estate, business interests or other assets. As the donor, you guide the fund by specifying which charities will receive grants and when those donations should be made.

While the basic principles of estate planning apply to everyone, certain situations require customized strategies that fit your unique needs. This is where a financial advisor can offer specialized guidance and give you confidence in your plan. Among the special circumstances that may require extra care are:

• Blended families. If you or your spouse has children from previous relationships, choosing how to distribute assets can become more complicated. Some couples choose to keep the assets they owned before the marriage separate from those they built together, while others opt to combine all their assets and split them evenly among all heirs.
• Families with no children. Even if you don't have kids, you still need an estate plan. Perhaps you want your spouse to receive all your assets when you pass on—or you'd like to support a charity that's particularly close to your heart. Be sure you name beneficiaries on any financial accounts you have and spell out your wishes in a properly signed will.
• Wealthy individuals. High-net-worth families have unique needs, whether it's reducing potential estate taxes or shielding assets from creditors. Typically, you need more advanced strategies, such as irrevocable trusts and charitable trusts, to best achieve your objectives.
• Special needs planning. If you have a loved one with special needs, making sure they're well cared for is one of your most important goals. Among the tools you may want to consider are ABLE accounts that provide a tax-advantaged way to save money for their future expenses. You also may explore a special needs trust to provide them with financial support after your death while preserving their eligibility for government benefits.
• Business owners. Estate planning is critical for business owners because it ensures continuity, protects assets, and minimizes tax burdens in the event of death, disability or retirement. A well-structured plan can facilitate smooth business succession—whether passing ownership to family members, key employees or external buyers—while safeguarding liquidity for estate obligations and equalizing distributions among heirs.
• Family farms. Planning how you'll transfer ownership of your farm can help provide business continuity and lead to greater financial stability for your family. You'll want a clear succession plan that addresses ownership and management of the farm. That can minimize internal conflicts and put future owners on a more solid footing.

Some assets aren't included in the probate process when you die. For instance, jointly owned accounts with rights of survivorship pass directly to your spouse or other co-owner.

Also, some financial assets are paid or transferred directly to your beneficiaries upon your death. These include:

• Retirement accounts such as IRAs and 401(k)s
• Life insurance contracts
• Annuities
• Payable-on-death and transfer-on-death accounts
• Trusts

To avoid any complications for your loved ones, make sure you designate a primary beneficiary (or beneficiaries) for these assets, as well as contingent beneficiaries who will receive the funds if the other beneficiaries have died or don't accept the bequest.

Having all your estate planning documents prepared and signed is a crucial step. But to make everything goes as planned when you die or you're incapacitated, communication is also vital.

Be sure to let your executor and other named agents know where they can find the latest version of these documents. If your will, trust or power of attorney is buried in a cabinet somewhere, the probate court might proceed as if you never had them. It also can lead to confusion and delays for your health care agent, who may have to make urgent medical decisions on your behalf.

How to talk to your parents about estate planning with compassion

You also should think about how to discuss your wishes with your beneficiaries—or loved ones who may assume they'll receive part of your estate. Sitting down with them while you're still in good health allows you to share the reasoning behind your bequests and compassionately listen to any thoughts they may have.

Life doesn't stand still, and neither should your estate plan. Important milestones can alter not only what you own, but also the people you'd like to protect with your wealth.

To ensure your estate documents reflect your current wishes, review them after major life events such as:

• Marriage or divorce
• Birth or adoption of a child
• Deaths in the family
• Major changes in wealth
• Changes to your health status

Outside of these types of life-changing events, consider reviewing your estate plan every five years or so. These periodic check-ups can help ensure your documents reflect your current assets and how you intend to provide for your loved ones.

Estate planning is about making sure your loved ones are cared for and your wishes are carried through when you're no longer able to make decisions yourself. By taking a thorough, systematic approach to your estate plan, there's a much better chance that your affairs will run smoothly when you experience a serious decline in health or pass on.

Putting together a comprehensive estate plan might seem overwhelming at first, but leaning on a team of professionals can help make the process manageable. Your estate planning attorney, tax professional and Thrivent financial advisor can help you navigate thornier areas—even those you aren't aware of—and make sure your plan achieves your specific goals.

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If you don't have a will—or the executor cannot find it—you legally die "intestate." That means state law determines who will receive your property (usually spouses and children are given priority), and the probate court has to select someone to manage your estate.

It's a good idea to review important documents—such as wills, trusts and financial beneficiary forms—after major life events like marriage, divorce or the birth of a child. You may be able to make minor changes to a will or trust by attaching an amendment, or you may need an entirely new document that effectively replaces any early versions. An estate planning attorney can ensure any revisions you make are done in accordance with state law.

A will is a legal document that allows you to name a guardian for a minor child, clarify your wishes for a funeral or memorial and specify who will receive assets belonging to your estate. A trust is an arrangement that gives you more control over how and when your assets are distributed, whether during your lifetime or after.

You want someone trustworthy and responsible to manage your estate when you pass on. Ideally, it should be someone with financial sense, as they may have to pay any outstanding bills and taxes that you owed at the time of your death. You can name a family member or friend—if they have the time and wherewithal to perform these duties—but you also can select an attorney or the trust department of a bank.

List digital assets—email and social media accounts, digital files and even cryptocurrency wallets—in a document known as a digital estate plan, or digital estate inventory. Be sure to mention in your estate planning documents that your executor and financial power of attorney have the right to access and manage your electronic files. You'll want to keep a list of usernames and passwords in a safe place and make sure your personal representatives know where to find them.

While federal estate taxes only apply to individuals with multimillion-dollar estates, some states have their own estate and/or inheritance taxes with much lower limits. If taxes are a concern for your family or business, you can use several strategies to limit the size of your taxable estate. These include taking advantage of the annual gift tax exclusion and transferring assets to an irrevocable trust—often funded with a life insurance contract.

Setting up a special needs trust allows you to provide for the long-term needs of a family member without affecting their eligibility for government benefits. You also may consider putting money into an ABLE account, a tax-advantaged savings and investment account that lets eligible individuals with disabilities save money for disability-related expenses.