Estate Planning Basics: Wills, Beneficiaries, and Powers of Attorney for Young Professionals
Jun 10, 2026
Did you know that no matter who you are, you already have an estate plan? “But wait,” you may be thinking, “I’ve never drafted a will; I’ve never even talked to an attorney!” That may be true, but you still have an estate plan. The fact is that, upon your passing, if you have not provided for your own will or other estate planning documents, your state has a plan that it will enact for you—and the terms of the state’s plan may or may not be what you would have chosen.
Perhaps you have young children who would need to be cared for in the event of your untimely passing; you may be worried about the decisions that would be made about your healthcare if you were to become incapacitated; or it may even be that you have a cherished cause or know of a charitable organization doing important work that you would like to assist for many years to come. Basic estate planning can help with each of these concerns, and many more. But each plan is as unique as the individual for whom it is designed. This, in fact, demonstrates the fundamental purpose of estate planning: to ensure that your wishes are carried out, even when you are no longer able to carry them out yourself.
What is my estate?
Especially for young professionals who may have never thought about it, it might be useful to consider the basic question of what constitutes an estate. Here are some categories you may not have considered that make up an estate:
- Real property: land, buildings, or residences you own or have a mortgage on
- Bank accounts: checking, savings, certificates of deposit, or money market accounts
- Digital assets: Frequent-flyer miles balances, credit card reward points, cryptocurrency, and even your log-in credentials to your accounts—all of these have value to your estate.
- Vehicles: automobiles, boats, airplanes
- Retirement accounts: IRAs (Roth or traditional), 401Ks or 403Bs (Roth or traditional) through your employer, simplified employee pensions (SEPs), health savings accounts (HSAs)
- Investments: brokerage accounts containing stocks, bonds, mutual funds, exchange-traded funds (ETFs), money market funds
- Life insurance and annuities: whole life, term life, variable life, group life insurance through your employer, variable annuities, fixed annuities
- Outstanding debts: Though they “subtract” from the amounts available to your heirs, your estate plan should also consider the effect of any indebtedness you have upon your death. Settling these debts typically takes place before any remaining assets can be distributed.
What documents do I need for a basic estate plan?
Let’s assume that at least one or two of the items above are in your possession; in other words, you have an estate. What documents do you need to ensure your estate is handled as you would wish in the event of your death or incapacity?
Will. A will is probably the most commonly used estate planning tool. This legal document lets you specify your wishes about what happens with a number of things, including your property and assets, following your death. It appoints a person or entity as the executor of the will—charged with seeing that the terms of the will are followed—and can also specify who should be appointed as the legal guardian of any minor children. Your will directs the probate court and other authorities as to how you want your property distributed, to whom, and when. The old word for will was “testament,” and a person who creates a will is still sometimes called a “testator.” Persons who die without a will are said to be “intestate,” meaning that the state will determine how the assets will be allocated.
Power of attorney (POA). This document appoints a person to act as your legal agent during your lifetime. Importantly, a POA remains in force even if you become incapacitated. The person holding your POA can sign contracts, open and close accounts, sell and purchase property, and conduct other legal and financial business on your behalf. POAs terminate upon your passing. In other words, a POA cannot substitute for a will.
Healthcare proxy (HCP). If you become incapacitated, no longer able to communicate your wishes or concerns to doctors or hospital personnel, who can make these determinations on your behalf? This problem can be solved by the use of HCPs. As long as you are able to handle this on your own, the HCP does not apply, but appointing someone as your proxy when you are clear-minded and capable of making your own decisions can relieve you and your family of significant stress in the event of an incapacitating accident or an unexpected illness. It’s important to note that your HCP can designate a different person than your POA. For example, if you have sibling who is a healthcare professional, you might want to have them hold your HCP, while you might prefer your best friend, who is a CPA, to hold your POA and handle your financial affairs if you become incapacitated.
Beneficiary designations. Many people don’t realize it, but when they designate a beneficiary for a life insurance policy, an IRA account, or their pension or 401(k) plan at work, they are creating an estate planning document. In addition, beneficiary designations bypass the probate process, which is the legal structure states use to determine who will own the property and assets of the deceased. This is why it is vitally important for you to periodically—ideally, annually—verify the beneficiary designations on your retirement accounts and insurance policies to make sure they reflect your current needs and wishes. More often than not, there may be an old, forgotten insurance policy or IRA account somewhere that names an ex-spouse, a former business partner, or some other entity as beneficiary that you would no longer intend to name. Nevertheless, if that name is listed as beneficiary, that person or entity will receive the assets specified in the contract at your passing, even if they have been excluded from all your other estate planning documents. In other words, beneficiary designations override the terms of wills, trusts, and other estate planning documents. This also applies to any accounts held in joint name or with survivorship rights. Frequently, spouses hold the title to their home as well as joint savings, checking, or investment accounts in such form, which means that upon the death of either spouse, the survivor would own the asset outright, bypassing the probate process.
Young professionals should have the basic estate planning documents in place, and after that, it’s important to review them periodically—ideally, annually. Also, when there are major life changes—marriage, divorce, birth of children, death of a family member, or acquisition/disposition of a business interest—your estate planning documents should be reviewed and adjusted as necessary (along with the beneficiary designations on insurance policies, retirement accounts, etc.).
At Glassy Mountain Advisors, we know how important it is for young professionals to get started “on the right foot”: career-wise, financially, and with a properly designed estate plan. We can help you build a financial plan that can help you establish your career with greater confidence. To learn more, please get in touch with us.
