Wills and estate law govern how your property, money, and medical decisions are handled while you’re alive and after you die. The main tools are wills, trusts, beneficiary designations on financial accounts, and powers of attorney, and they work differently depending on which ones you set up and how carefully you keep them current. For 2026, the federal estate tax exemption is $15 million per person,1Internal Revenue Service. What’s New – Estate and Gift Tax so most families won’t owe federal estate tax. State taxes, probate costs, and simple paperwork mistakes still catch people. The goal of planning is to keep control over who inherits what and to spare your family avoidable expense and delay.
What Makes a Will Valid
Every state sets a minimum age for making a will, almost always 18. You also need testamentary capacity: the ability to understand what you own, who your close family members are, and what your will does with your property. Courts measure that capacity at the moment you sign, nowhere else. A diagnosis of dementia or another cognitive condition doesn’t automatically disqualify you if you had a clear window when you executed the document.
The signing rules follow a pattern drawn from the Uniform Probate Code, which most states have adopted in some form. The will has to be written, not oral. You sign it in front of at least two witnesses, who then sign themselves. The witnesses must have actually seen you sign or heard you acknowledge the signature as yours. They should also be disinterested, meaning they don’t stand to inherit under the will. A witness who is also a beneficiary can create grounds for a challenge or, in some states, lose their inheritance entirely.
Most people add a self-proving affidavit, which is a notarized statement signed by you and your witnesses confirming that the signing followed proper procedures. Without it, your witnesses may have to appear in probate court years later to confirm what happened. With it, the court accepts the will without that testimony. Notary fees for estate documents are modest, typically between $2 and $25 per signature depending on where you live.
If the technical requirements aren’t met, the entire will can be void, and your property then passes under your state’s default inheritance rules instead of your wishes. Getting the signing right is the cheapest insurance in estate planning.
Handwritten Wills
About 26 states recognize holographic wills, which are handwritten documents that don’t require witnesses. The important parts, including the property dispositions and your signature, have to be in your own handwriting. Typed text or someone else’s writing on the document can create problems or invalidate it. Holographic wills are better than nothing, but they’re far more vulnerable to challenge. Courts spend more time parsing handwritten instructions, and ambiguous language a lawyer would have caught becomes a magnet for litigation among heirs who disagree about what you meant.
Changing or Canceling a Will
A will isn’t permanent. You can change or revoke it anytime, as long as you still have capacity. There are three standard ways:
- Execute a new will. A new will with a clause revoking all prior wills replaces the old one cleanly. Most attorneys recommend this whenever changes are significant.
- Write a codicil, which is a formal amendment that modifies parts of an existing will without replacing it. It has to be signed and witnessed with the same formalities as the original. Codicils work for minor changes but can create confusion if you stack several of them over the years.
- Physically destroy the will. Burning, shredding, or tearing it up with the intent to revoke works in most states. If you ask someone else to do it, that person usually has to destroy it in your presence and in front of witnesses. If copies exist and the original can’t be found, a court might presume revocation, or it might not, depending on local law.
Crossing out a line or writing “void” on the page usually isn’t enough. And a major life event like divorce doesn’t automatically wipe out your entire will in most states, though it often voids provisions benefiting your former spouse. The safest practice after any big change (marriage, divorce, a new child, a major asset shift) is to execute a new will.
Assets Your Will Doesn’t Control
One of the most consequential rules in estate law is also one of the least understood: beneficiary designations on financial accounts override your will. If your will leaves your retirement account to your daughter but the beneficiary form on file names your ex-spouse, your ex-spouse gets the account. Financial institutions follow their own records, and courts enforce this consistently. The will only controls assets that don’t have a separate beneficiary designation or transfer mechanism.
The common assets that pass outside probate include:
- Retirement accounts (IRAs, 401(k)s, similar employer plans) transfer to whoever is named on the beneficiary form. For employer-sponsored plans governed by federal retirement law, a surviving spouse has automatic rights to the account unless they’ve signed a written waiver.
- Life insurance pays the named beneficiary directly, regardless of what any will says.
- Payable-on-death bank accounts pass to the named person on your death. The beneficiary presents a death certificate and ID, and the bank releases the funds without court involvement.
- Transfer-on-death investment accounts work the same way for brokerage assets.
- Transfer-on-death deeds, allowed in roughly 30 states, let you name a beneficiary for real estate. The property transfers automatically at death, and you can revoke the deed anytime during your life.
- Property owned as joint tenants with right of survivorship passes to the surviving owner automatically.
Because these assets skip probate, they also skip whatever plan your will sets up. This is where estate plans quietly fall apart. People update their wills but forget the beneficiary forms on their retirement accounts and insurance policies. Reviewing those designations every few years, and after every major life event, prevents the most common estate planning failure there is.
Trusts and When They Help
A trust is an arrangement where you transfer ownership of assets to a trustee who manages them for your chosen beneficiaries. You can set one up during your lifetime (a living trust) or have one created through your will (a testamentary trust). The trustee can be you, another person, or a professional institution, and the rules for how and when beneficiaries receive distributions are whatever you write into the trust document.
The most popular version, a revocable living trust, lets you keep full control during your lifetime. You can change the terms, swap out beneficiaries, add or remove assets, or dissolve it entirely. The trade-off is that a revocable trust doesn’t shield assets from creditors or reduce your taxable estate while you’re alive, because you still effectively own everything in it. Irrevocable trusts do offer those protections but require you to permanently give up control, which is why they’re used more strategically for high-value estates or specific goals like protecting assets for a beneficiary with special needs.
Funding and Privacy
Creating the trust document is only half the job. The trust doesn’t control anything until you retitle assets into it. For real estate, that means recording a new deed naming the trustee as the property owner. Financial accounts have to be retitled to reflect the trust’s name and creation date. Any asset you forget to transfer stays outside the trust and may still need to go through probate. An unfunded trust is essentially an expensive stack of paper.
Unlike a will, which becomes a public court record once it enters probate, a trust document stays private. No one outside the trustee and beneficiaries has a right to see it. That privacy, plus the ability to transfer assets without court involvement, is the main reason many families use trusts even when their estates aren’t large enough to trigger tax concerns. Setting up and funding a trust costs real money, but for many people it’s less than the combined expense and delay of probate.
Stepped-Up Basis
Whether assets pass through a will, a trust, or another mechanism, inherited property generally gets a stepped-up basis. Under federal tax law, the cost basis of inherited property resets to its fair market value on the date the owner died, not what they originally paid.2Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If your parent bought a house for $80,000 and it was worth $400,000 when they died, your basis is $400,000. Sell it for $410,000 and you owe capital gains tax on $10,000, not on the $330,000 of appreciation during their lifetime. This is one of the most valuable tax benefits in estate law, and proper documentation of fair market value at the date of death is essential to claim it. Without an appraisal or other evidence of value, the IRS can treat your basis as zero.
Planning for Incapacity, Not Just Death
Estate planning isn’t only about death. A serious illness or injury can leave you unable to manage your finances or make medical decisions, and without the right documents in place, your family has no automatic legal authority to step in.
A durable power of attorney names someone you trust as your agent for financial matters. “Durable” means it stays in effect even if you become mentally incapacitated, which is precisely when you need it most. You can make it broad, covering everything from paying bills to selling property and managing investments, or limit it to specific tasks like filing tax returns. Some people make it effective immediately; others use a “springing” version that activates only when a physician certifies they can no longer manage their own affairs.
A separate document, usually called an advance healthcare directive or medical power of attorney, handles medical decisions. It designates a healthcare agent to make treatment choices when you can’t communicate, and it typically includes your preferences on life-sustaining treatment, pain management, and end-of-life care. Most states require one or two physicians to formally certify that you lack decision-making capacity before the agent’s authority kicks in.
For digital accounts, nearly every state has adopted legislation based on the Revised Uniform Fiduciary Access to Digital Assets Act, which gives your executor, trustee, or power-of-attorney agent the legal right to access your digital accounts after death or incapacity. Platform terms of service can still complicate access without explicit instructions, so listing your digital accounts and including specific authorizing language in your power of attorney and will is the simplest fix. Cryptocurrency wallets deserve special attention, because there’s no institution that can restore access if the private keys are lost.
If you don’t have these documents and become incapacitated, your family’s only option is petitioning a court for a guardianship or conservatorship. These proceedings are public, slow, and expensive. Attorney fees and court costs for even an uncontested guardianship commonly run several thousand dollars, and contested cases cost far more. The court, not your family, decides who takes charge, and that person reports to the court on an ongoing basis. A durable power of attorney and healthcare directive together cost a fraction of a guardianship proceeding and prevent the whole scenario.
What Probate Actually Involves
Probate is the court-supervised process of validating a will, paying debts, and distributing what’s left to heirs. It starts when someone (usually the person named as executor) files a petition with the probate court along with the original will and a death certificate. Initial filing fees typically run in the hundreds of dollars.
Once the court accepts the will, it issues Letters Testamentary, giving the executor legal standing to act for the estate. If there’s no will, the court appoints an administrator and issues Letters of Administration instead. The executor then notifies known creditors directly, publishes notice in a local newspaper, and inventories estate assets, sometimes with professional appraisals. Creditors generally have four to six months to file claims, depending on the state. Before any money moves to heirs, the executor files a detailed accounting of income, expenses, and what remains, and the court has to approve it. The whole process commonly takes between six months and two years. Contested estates or complex assets can run much longer.
The two largest expenses, beyond filing fees, are attorney fees and executor compensation. Probate attorneys charge either by the hour or as a percentage of the estate’s gross value, with percentage-based fees commonly between 2% and 5%. Those percentages are usually calculated on the total value of assets before subtracting mortgages or other debts, so a house worth $500,000 with a $300,000 mortgage counts as $500,000 for fee purposes. Executors are also entitled to compensation in a similar range. About half the states set executor pay by statute on a sliding scale; the rest leave it to “reasonable compensation” as set by the court.
Small Estate Shortcuts
Most states offer a simplified process for smaller estates, usually through a small estate affidavit that lets heirs collect assets without full probate. The dollar threshold varies dramatically, from a few thousand dollars in some states to well over $100,000 in others. The affidavit process typically requires waiting a set period after death, then presenting the affidavit and a death certificate directly to the institution holding the assets. For estates under the threshold, this can reduce months of court proceedings to a single document.
If You Die Without a Will
Dying without a valid will triggers your state’s intestate succession rules, a default formula for distributing property based on family relationships. These rules exist in every state and follow a predictable hierarchy, but they ignore your actual wishes, personal relationships, and anyone who isn’t a legal relative.
The surviving spouse generally gets the largest share, though the exact amount depends on whether you also have surviving children. With a spouse and children, many states split the estate in some proportion. With no spouse, children inherit everything. If there are no children, the hierarchy moves to parents, then siblings, then more distant relatives. When a child dies before the parent, most states let that child’s share pass down to their own children, so a branch of the family isn’t cut off because of the order in which people happen to die. A related rule, drawn from the Uniform Simultaneous Death Act, requires an heir to survive you by at least 120 hours to inherit, which avoids running the same assets through probate twice when spouses die close together.3LII / Legal Information Institute. Uniform Simultaneous Death Act
Intestate succession has blind spots that surprise people. Unmarried partners, stepchildren who were never legally adopted, close friends, and charities receive nothing. Property with no identifiable heir eventually passes to the state government through escheat, though that’s uncommon. Legal fees for administering an intestate estate also tend to run higher, because the court spends more time identifying and verifying heirs. A basic will eliminates virtually all of these problems.
Federal Estate and Gift Tax in 2026
For 2026, the federal estate tax exemption is $15 million per individual.1Internal Revenue Service. What’s New – Estate and Gift Tax Estates below that owe no federal estate tax. Estates above it face a top marginal rate of 40% on the amount over the exemption. The exemption is now permanent and will be adjusted annually for inflation starting in 2027.4Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax
Married couples can effectively double the exemption through portability. When the first spouse dies, any unused portion of their $15 million exemption can transfer to the surviving spouse, potentially shielding up to $30 million. The catch: the executor of the first spouse’s estate has to file a federal estate tax return (Form 706) and elect portability, even if the estate owes no tax. The deadline is nine months after death, with an automatic six-month extension available.5Internal Revenue Service. Frequently Asked Questions on Estate Taxes Missing it can forfeit millions in tax protection. For estates that missed the deadline and were below the filing threshold, a simplified relief procedure allows filing up to five years after death, but there’s no safety net for estates otherwise required to file.
You can also give up to $19,000 per recipient per year in 2026 without touching your lifetime exemption or filing a gift tax return.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill A married couple giving jointly can transfer $38,000 per recipient. Gifts above the annual limit aren’t immediately taxed but reduce your remaining lifetime exemption dollar for dollar. Payments made directly to educational institutions for tuition or to medical providers for someone else’s care don’t count toward these limits at all, which makes them a useful way to move money out of a taxable estate.
State-level estate or inheritance taxes apply in roughly a dozen states, often with much lower exemption thresholds than the federal level. An estate that owes nothing federally may still face a significant state tax bill, so planning around both layers matters for families in those states.