**Estate Planning** (noun) — The process of arranging and organizing one's financial and personal affairs to ensure the orderly management and distribution of assets during life and after death, typically involving wills, trusts, powers of attorney, and other legal instruments.
Estate planning is deciding what happens to your assets and affairs if you become incapacitated or when you die. It's about making clear plans now so that your wishes are followed later, and so the people you care about are taken care of without unnecessary complications.
At its most basic, estate planning means making a will. But comprehensive estate planning usually includes several documents: a will (directing what happens to your assets after death), powers of attorney (appointing someone to manage your finances if you can't), medical directives or guardian appointments (specifying who makes health decisions if you can't), and sometimes trusts or other arrangements for managing assets.
Good estate planning considers not just what you want to happen, but how to make it happen as smoothly as possible. This might involve structuring ownership of assets in certain ways, making gifts during your lifetime, setting up trusts, or organizing your affairs to minimize taxes or avoid disputes. The goal is to make things as straightforward as possible for the people who will handle your affairs.
⏱ When you'll encounter this term
Everyone needs some level of estate planning, not just wealthy people. If you have assets you want specific people to receive, if you have children who would need care, or if you want particular people making decisions for you during incapacity, you need estate planning.
Estate planning is not a one-time task. Your plan should be reviewed and updated as your life circumstances change. Marriage, divorce, having children, acquiring significant assets, starting a business, or moving to a different jurisdiction are all occasions to review your estate plan. Many professionals recommend reviewing your plan every three to five years even if nothing major has changed.
People often put off estate planning because it involves thinking about death and incapacity. But having a plan actually provides peace of mind. You know your wishes will be followed, your family will be provided for, and you've avoided creating unnecessary stress and expense for the people you care about. Good estate planning is a gift to your loved ones.
**Related terms:** [Will](/dictionary/will), [Trust](/dictionary/trust), [Executor](/dictionary/executor)
---
"Our estate planning included wills for both of us, enduring powers of attorney, advance care directives, and a testamentary trust for our kids. Everything's organized so there's clarity if something happens to either of us."