A huge wealth transfer is coming — but most Americans don't have a will. 6 must-haves in your estate plan

Over the next three decades, American retirees will transfer a staggering $84.4 trillion in wealth to their loved ones and charities when they die. However, only 24% of Americans have a will in 2025, down from 33% in 2022, according to Caring.com.

Estate planning lawyers see the disconnect between a lack of preparedness and how grieving families face expensive legal battles and broken relationships.

"It's almost like a superstition that people have that if they start talking about their estate planning documents, they're going to get that terminal illness, because they've spoken it into existence," said Michael Zahrt, a business and estate planning attorney with Foster Swift Collins and Smith in Grand Rapids, Michigan.

The reluctance to discuss or write down your final wishes carries real-life consequences. Without proper estate planning, families can spend months — or years — entangled in costly, bitter probate battles over everything from funeral arrangements to who gets the house.

The high cost of doing nothing

Estate planning isn't just for the wealthy. In fact, middle-class families often have the most to lose when someone dies without a plan.

"Most people don't realize that if you pass away and you don't have a will, a portion of your estate could very well go to your children and your spouse," said Cheryl Fratello, an elder law and estate planning attorney based on Long Island, New York. "We've seen this happen, and it's a really tragic situation where a spouse now wants to sell the home, and it's not so easy, because minors are entitled to the house."

In New York, intestacy laws — the default rules when someone dies without a will — split assets roughly half to the surviving spouse and half to the children. For families with young kids, that can create nightmarish scenarios.

Without clear wishes spelled out, an 18-year-old could inherit hundreds of thousands of dollars from term life insurance policies with no guidance or protection — hardly what most parents envision.

6 documents you need in your estate plan

Estate planning goes far beyond simply writing a will with online software. Probate laws vary by state, so it’s best to consult with an estate planning attorney to see what forms you should include in your plan.

Here are the key documents attorneys say everyone should have:

1. Last will and testament

This is the foundation of any estate plan, directing how your assets should be distributed after death. In your will, you’ll name guardians who will raise your minor children after you pass, Zahrt noted.

"You don't name the guardian in the will, and something bad happens, and now your parents and your in-laws are fighting over who gets to take care of the grandkids,” he said.

2. Financial power of attorney

A financial power of attorney is a document that names someone to handle your financial affairs if you become incapacitated.

"If you have an illness down the road and you are unable to manage your affairs, and you do not have a comprehensive power of attorney in place, your family will have to go through a guardianship proceeding, which is something that is very expensive,” Fratello said.

She added that this is one document where online software just won’t cut it. "If you go online and download the basic form, it's not going to have everything you need,” she said. “It won't have powers to create trusts, to fund trusts, to do all the things.”

3. Healthcare proxy or patient advocate designation

This document appoints someone to make medical decisions on your behalf if you're unable to do so. In Michigan, it's called a patient advocate designation; in New York, a healthcare proxy. Different states have different terminology, but the function is the same.

Zahrt said he drafts these documents to be broad, avoiding overly detailed checklists. "If I use the laundry list and I encounter a diagnosis that's not on the laundry list, I don't want the treating physician to say, 'Well, gee, you contemplated all these things, but you didn't contemplate that thing.'"

And contrary to popular belief, you don't have to pick a family member as your healthcare proxy. "You want to pick the person that has the fortitude to make the right decision," Zahrt said.

4. Living will

A living will outlines your end-of-life care preferences, such as whether you want life-sustaining treatment in certain situations. Fratello keeps this document separate from the healthcare proxy. 

The living will typically includes broad language about comfort care and extraordinary means, giving your healthcare agent guidance without overly restricting their ability to respond to specific medical situations.

5. Trust (when appropriate)

Not everyone needs a living trust, which costs more than a will to prepare and needs to be funded with your assets, but they've become increasingly popular over the years. Trusts avoid probate, provide asset protection for long-term care planning, and allow for controlled distributions. Zahrt took a conservative approach with his own children's inheritance.

"I have a seven-year-old and a five-year-old. I assume they're going to be terrible with money, so they're not going to get a big check until they're 27,” he said.

For elderly clients with grown, responsible children and assets that already have beneficiary designations, however, a simple will might suffice.

6. Disposition of remains form

This newer document, available in states like New York, designates who will handle your burial or cremation arrangements — important because statutory default rules might give that authority to someone you wouldn't choose.

"We have special laws in New York that the individual who may have the statutory right to handle your burial may not be the person that you want to handle it," Fratello said. "For instance, it might be a sibling, and you haven't spoken to that sibling in 20 years."

Having the tough conversation

The biggest hurdle to getting your final affairs in order isn’t the documentation; it’s the emotional toll of facing and discussing your own mortality with family members.

"Failing to plan — that's the biggest mistake and most catastrophic mistake for your family," Fratello said, because it could eventually lead to hurt feelings and drawn-out court fights.

For adult children trying to broach the subject with aging parents, Zahrt suggests framing it around honoring their wishes rather than preparing for death.

And make sure you review your estate plan regularly. Zahrt recommends every four years or after major life events: births, deaths, divorces, disabilities or significant debt.