Your Plan Flagged Three Actions
Your MoneyOnFIRE plan identified that you have dependents and growing assets. That combination means three documents need your attention: a will, up-to-date beneficiary designations, and possibly a revocable living trust. Together, they ensure your wealth goes where you intend and your family is protected if something happens to you. This page walks through exactly how to complete each one.
1. Create or Update Your Will
A will specifies three things: who receives your assets, who serves as executor (the person responsible for carrying out your instructions), and — if you have minor children — who becomes their legal guardian. Without one, state intestacy laws make all of these decisions for you.
How to Do It
- Online services: Trust & Will, FreeWill, or LegalZoom can produce a legally valid will in 30–60 minutes for $100–$300. These work well for straightforward situations.
- With an attorney: Plan for 1–2 hours and $500–$1,500. Use an attorney if you have blended families, business ownership, assets over $1M, property in multiple states, or dependents with special needs.
What to Include
- Asset distribution: Who inherits your home, personal property, and non-retirement financial accounts
- Guardian for minor children: Name a primary and backup guardian. Discuss it with them before finalizing.
- Executor: Choose someone organized and trustworthy — they will manage your estate through probate, pay outstanding debts, and distribute assets
2. Review Beneficiary Designations
This Is the Most Commonly Missed Step
Beneficiary designations on your 401(k), IRA, life insurance, and bank accounts override your will. If your 401(k) still lists an ex-spouse, that is who receives the money — regardless of what your will says. If you never set a beneficiary, the account defaults to your estate, which forces it through probate and may delay access for months.
Log into each of the following accounts and verify that your primary and contingent (backup) beneficiaries are correct and current:
- 401(k) and 403(b) plans: Federal law requires your spouse as primary beneficiary unless they sign a written waiver
- Traditional and Roth IRAs: Set primary and contingent beneficiaries through your brokerage
- Life insurance policies: Proceeds go directly to the named beneficiary, bypassing probate entirely
- Bank and brokerage accounts: Add transfer-on-death (TOD) or payable-on-death (POD) designations so these accounts pass outside of probate
- HSA accounts: If your spouse is the beneficiary, they inherit it as their own HSA; anyone else receives a taxable distribution
Make a List
Write down every retirement account, every insurance policy, and every bank or brokerage account you own. For each one, record who is listed as primary and contingent beneficiary. This list takes 15–30 minutes to build and is the single most effective thing you can do to prevent your assets from going to the wrong person.
3. Consider a Revocable Living Trust
A revocable living trust holds your assets during your lifetime. You remain in full control as the trustee, and you can change or dissolve it at any time. When you pass away, assets in the trust transfer to your beneficiaries without going through probate — avoiding court fees, delays, and public disclosure.
When a Trust Makes Sense
- You own real estate: Property must go through probate in the state where it is located. If you own property in multiple states, a trust avoids multiple probate proceedings.
- You want to avoid public probate: Wills become public record during probate. A trust keeps your asset distribution private.
- Complex family situations: Blended families, minor children from a previous relationship, or dependents with special needs benefit from the control a trust provides over how and when assets are distributed.
When a Trust Is Probably Not Necessary
If you are under 40 with straightforward finances — no real estate, no blended family — a properly drafted will combined with correct beneficiary designations on all accounts may be sufficient. Retirement accounts and life insurance already bypass probate through their beneficiary designations, so a trust primarily helps with real estate and taxable accounts.
Cost is typically $1,000–$3,000 through an estate planning attorney. A trust does not replace a will — most estate plans include both. The trust handles your major assets, and a “pour-over will” catches anything that was not transferred into the trust during your lifetime.
Also Set Up: Power of Attorney and Healthcare Directive
These two documents protect you while you are alive, not just after death:
- Durable power of attorney (financial): Authorizes someone you trust to manage your finances — pay bills, file taxes, manage investments — if you become incapacitated. Without this, your family may need to petition a court for conservatorship.
- Healthcare directive (living will) and healthcare power of attorney: Specifies your medical treatment preferences if you cannot communicate them, and names someone to make healthcare decisions on your behalf.
Most online will services (Trust & Will, FreeWill, LegalZoom) include these documents as part of their standard packages. If you are working with an attorney, they should be part of the engagement.
When to Review Your Estate Plan
Review your documents and beneficiary designations after any of these events:
- Marriage or divorce
- Birth or adoption of a child
- Purchase or sale of a home
- Significant change in net worth, including reaching financial independence
- Death of a named beneficiary, executor, or guardian
- Moving to a different state (estate laws vary significantly)
Even without a triggering event, an annual check that beneficiary designations are current and your named agents are still appropriate takes only a few minutes.
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