The Financial Planning Process: Why and How to Include Estate Planning

Creating a solid personal financial plan involves more than just budgeting and saving money. It should also include some estate planning—starting with drawing up a will and going from there.

Get peace of mind with a comprehensive estate plan

Trustpilot star rating bar
the financial planning process why and how to include estate planning

Contents

Updated on: January 28, 2025
Read time: 4 min

You probably already know about financial planning—the importance of drawing up a budget, saving money, planning for retirement—as a way to manage your money, but did you know estate planning is an important component of the financial planning process, too?

Estate planning can give you great peace of mind, knowing that the people you choose will be in charge of your affairs after you're gone and that your wishes will be followed.

Moreover, a comprehensive estate plan can designate whom you would like to have making financial and health care decisions on your behalf, as well as specifying the types of medical treatment you do and don't want if you become incapacitated. Your loved ones also will appreciate not having to make difficult decisions during an already stressful time.

A solid estate plan, therefore, is actually an integral part of personal financial planning.

Below you'll find some financial planning tips regarding getting your estate in order, including brief descriptions of some of the most common legal documents you might want to draw up.

Why and how to include a financial process in estate planning.

Creating an estate plan

Estate planning doesn't have to be complicated, and, in fact, in just a few steps you can be off to a great start.

First, you should take an inventory of your assets and figure out whom you would like to get what. Think, too, about your personal preferences regarding medical care should you become incapacitated and about whom you would like to handle your affairs, in the event of either your death or incapacitation. If you have minor children, consider potential guardians for them.

Now it's time to decide which documents you should include in your estate plan. Here are some of the most likely candidates:

Wills and trusts

Wills and trusts give you a way to make your wishes known for after your death. A last will and testament allows you to name someone to handle your affairs after your death (executor) and state to whom you would like certain property to go. You also can name a guardian for minor children in a will.

Without a will, you will die intestate, which means that the government will distribute your assets according to your state's law—and things may not end up where you would have liked.

A living trust, on the other hand, allows you to place your assets in a trust for your benefit during your lifetime and then have those assets transferred directly—without going through probate—to your chosen beneficiaries upon your death. A living trust can typically make the transfer of assets faster and avoid the added expenses of probate.

Advance healthcare directives

A living will or advance directive gives you the chance to provide instructions regarding the medical care you wish to receive should you become unable to communicate your wishes yourself. In both, you can include instructions regarding life-sustaining measures such as breathing and feeding tubes. A living will generally does not include a healthcare power of attorney, while an advance directive functions as both a living will and a healthcare power of attorney.

Power of attorney

A power of attorney (POA) gives someone of your choice the authority to handle your affairs. A durable power of attorney gives that person the legal authority to do so even if you become incapacitated. A financial power of attorney would handle only financial matters, while a health care power of attorney would be in charge of health care decisions.

Life insurance

Life insurance can help make sure your loved ones are taken care of after your death. Parents of minor children, homeowners, and those who anticipate their estate's owing a large amount of estate taxes or having to pay off a large debt, in particular, should look into life insurance protection.

Drawing up the documents

Now that you have an idea of which documents you want in your estate plan, it's time to get down to business. In the same way that you may benefit from having a financial adviser or getting professional financial advice while coming up with your personal financial plan, it is a good idea to get professional guidance during estate planning.

The bottom line: your financial plan should include more than just provisions for budgets, savings, and retirement; it should also address estate planning concerns.

LegalZoom can help you set up an estate plan. If you're not sure which documents you need, our estate planning tool can help you decide. You can also talk to an attorney who can point you in the right direction when you sign up for our personal legal plan.

Get peace of mind with a comprehensive estate planStart my estate plan
Twitter logoFacebook logoLinkedIn logoReddit logo

This article is for informational purposes. This content is not legal advice, it is the expression of the author and has not been evaluated by LegalZoom for accuracy or changes in the law.

71 days ago
Trustpilot star rating bar

legal zoom is the way to go

The representative was very knowledgeable about how long it takes to transfer a deed from one person to the next he explained everything and he was very pleasant when speaking to him

Ross
71 days ago
Trustpilot star rating bar

I find that LegalZoom has all the…

I find that LegalZoom has all the answers if you're starting a business an LLC and incorporation or you're doing a trust or a Will. These are the people you want to trust don't go to an expensive attorney you're just throwing your money away. Legal soon gets five stars!

Sean Christopher
71 days ago
Trustpilot star rating bar

I spoke to the representative today about a Trust...

I spoke to the representative today regarding a question about an existing Living Trust. She was very helpful - told me exactly what I needed to know and how to accomplish it. As a representative in the Financial field I guide clients all the time on where to get documents done right - and its always LegalZoom - easy and effecient!

Gareth
80 days ago
Trustpilot star rating bar

We could not be more Pleased with the…

We could not be more Pleased with the help and service we had during the up dating of our Living Will and Advanced Directive

Richard Poulton
83 days ago
Trustpilot star rating bar

Legal Assistance for the rest of us

Legal Zoom has made it easy and affordable for us to create an LLC, a Will, and a Trust for our families.

K Chapman
86 days ago
Trustpilot star rating bar

pleasant and willing representatives…

pleasant and willing representatives ready to help me navigate through your system and supply attorney contact information for my legal questions for my last will & testament

Mark Impink
86 days ago
Trustpilot star rating bar

LegalZoom .com has exceptional, real, staff to help. I met one!

I purchased multiple accounts to update both our Living Wills and Estate Plans. After utilizing LegalZoom.com’s user-friendly and intuitive platform for these legal documents, I found it necessary to call for clarification on some information within our account. I spoke with Sandra Balderas, who expertly addressed the mistakes I had inadvertently made. Her professionalism and friendliness greatly enhanced the experience. I realized that LegalZoom is not only a straightforward website to navigate for such complex matters, but it also boasts exceptional employees. Thank you, LegalZoom.com, and especially Sandra Balderas, for guiding me through the process. I’m thrilled to have discovered LegalZoom.com.

Max -Phoenix, Arizona
86 days ago
Trustpilot star rating bar

Sarah was most helpful today regarding updating my estate plan

Sarah was most helpful today regarding updating my LZ docs created 3 years ago. She made sure I had all the information I needed, not just what I asked for. Thank you Sarah!

Diane Floyd
92 days ago
Trustpilot star rating bar

Quick and easy experience creating a…

Quick and easy experience creating a will package.

Kristin Steel
97 days ago
Trustpilot star rating bar

Used them past 10 years

Used them past 10 years. I needed another will and power of attorney.

MERLYN C
97 days ago
Trustpilot star rating bar

Tammy was wonderful and very…

Tammy was wonderful and very knowledgeable. It's because of her that I am going to open a living trust with legal zoom. She was great. Thank You

Erin
105 days ago
Trustpilot star rating bar

Pleasant Experience

Patience and weel given explanation about the process of how a "Living Trust" & "Deed" works after transitioning and guidance on how to contact an attorney whenever I need legal advice.

Sharron Martin
107 days ago
Trustpilot star rating bar

It was a breeze to deal with Legalzoom…

It was a breeze to deal with Legalzoom and finished my estate plan within an hour!! Thanks again

BT
111 days ago
Trustpilot star rating bar

Great team…

Mark and Legal Zoom make estate planning affordable and attainable.

Christopher Maginnis
143 days ago
Trustpilot star rating bar

Living Will & Forming my LLC

I have used Lega Zoom for several items, including my living will and items to form my LLC for my business. It's fast, easy, and thorough. The customer service is fantastic! I am working with David on a few items for my will,l and he has been a delight. He follows up when he says he will and is incredibly helpful. I highly recommend this company.

Kristen J
155 days ago
Trustpilot star rating bar

Nadia made it very easy for me to make…

Nadia made it very easy for me to make a decision to sign up and create my estate planning documents with legalsoom. She was very professional and knowledgeable about the package that I chose. She also offered her direct contact for any future questions I might have.

Melita D'Anna
164 days ago
Trustpilot star rating bar

Kylie helped me to review my history of…

Kylie helped me to review my history of trying to complete my estate plan and contacting a legal advisor that comes with my account. She was patient, knowledgable, and helpful.

Paula
168 days ago
Trustpilot star rating bar

I have worked with Mark Champ on… Last Will & Testament, Living Will, Quit Claim Deed

I have worked with Mark Champ on several documents I needed and every time he has provided me with every thing I needed and with so much graciousness and knowledge. It has always been such a pleasure working with Mark!!!!!!!!!!!!!

Cathy Donaldson
203 days ago
Trustpilot star rating bar

Most Dedicated Representative!

Patti Green was the most informative person in guiding me through the process of completing my estate plan . She was always there for me to answer my questions and give excellent advice . Also , she was very polite and considerate ! Legal Zoom is so fortunate to have Patti on their team . Thank you , Patti for all of your assistance and kindness !

Priscilla Page
281 days ago
Trustpilot star rating bar

Patti Green is GREAT!

Ms. Patti Green walked me through the Estate Planning process. She was very professional, patient and kind. Planning for when you are no longer here is very intricate and difficult. Working with Ms. Green helped give the assurance that I am doing the right thing for myself and loved ones.

TRINESSA
Rated4.6out of 5 based on23,946+ reviewson

Showing our favorite reviews