Estate planning lets you determine how you want your assets distributed upon your death. Not to be morbid, but for those under 40, be advised that dying doesn't just happen to old people. In many instances, young people believe that's the case, which is an impediment to getting this last piece of the financial plan completed.
As noted in the CBS Boston article, titled "The Boomers' Kids: Estate Planning," if you die without a will, your state laws will provide one for you—and it won't be what you want. The state will dictate the order in which your assets will be distributed. Along the same lines, if you are married with young children and both parents die, then your failure to appoint guardians means the court system will decide this for you.
Your estate plan doesn't need to be fancy, expensive, or complicated. You begin with a will through which you designate an executor/executrix to carry out your wishes and distribute your assets. Again, if you have minor children, you can name a guardian for them. However, appointing a guardian can be done less formally in some states.
Speak with the people you are considering to raise your children. Ask them if they are comfortable with that responsibility. Make certain you understand their values and their patience level.
A durable power of attorney is also needed while you're still alive. This document lets you appoint someone to act on your behalf legally and financially if you're not able to do so.
A health care proxy allows you to choose someone to make medical decisions for you if you are unable to make them. Like those you ask to be your children's guardians, talk to the individual you've asked to be your proxy. Tell them how you feel about death, dying, and life support. This person will need to be the one to carry out your wishes if you cannot do so for yourself.
Reference: CBS Boston (June 3, 2016) "The Boomers' Kids: Estate Planning"