Everyone should consider preparing a Will and the other documents that establish an estate plan. A Will generally covers the disposition of property at death by making specific gifts of cash or property, directing the distribution of the remainder of your estate, designating an individual to carry out your wishes and setting forth trust provisions if a trust will be established (i.e. to hold property for a child or to protect property from a beneficiary's financial troubles, divorce or incompetency). A Will can also include a provision naming a guardian for your minor children. Essentially, estate planning provides assurance in knowing where your assets will go and how your loved ones will receive care. Because each state's probate and succession laws are different, there is no blanket solution. There are several issues to review to properly prepare your affairs.

As a basic part of the estate planning process, you should review your assets and liabilities, your family situation (i.e., marriage, divorce, second marriages, children, whether a parent is supported or will need support in the future), the nature of your property (separate or community property), and the type of property (real estate, securities, property held in joint tenancy with right of survivorship, life insurance, pension benefits, etc.). In addition, one of the crucial influences on your estate plan is your state's marital property law. Before meeting with an attorney, consider how you would like your property distributed and who you trust to administer your estate. Once you have reviewed this information with an attorney, you can outline a plan for dividing and distributing your property.

Will Forms
A number of products are marketed under the concept that you may prepare your will without an attorney's advice. These products may be effective in some cases, but they may not comply with your state's laws or meet specific state requirements. In addition, you may fail to benefit from state-specific planning techniques that could save time and money in probating your Will. Lastly, these products may not fit your family and asset situation as well as customized estate planning documents. Consider these caveats when deciding whether to retain an attorney.

Handwritten or Holographic Wills
A Will written wholly in your handwriting and signed by you may be valid (depending on your state's laws). There are, however, many potential problems with this type of Will; it may be invalid, may not dispose of all your property, or may not employ time and money-saving techniques. For these reasons, handwritten Wills drafted without an attorney's advice are not recommended.

Is a Will Necessary?
You should consider a Will even if you think you do not have "enough" assets. You can never know what property you may be entitled to at your death or what your family circumstances might be. At a minimum, ask an attorney about your situation.

Ancillary Documents
There are several other estate planning documents that most individuals should consider. First, a Durable Power of Attorney allows you to name an individual to act for you with respect to your finances if you become incapacitated. Many individuals sign a Living Will (or Directive to Physicians), which includes a statement regarding your wish to be (or not to be) kept alive by artificial means. You may also execute a Power of Attorney for Health Care to name the individual(s) authorized to make health care decisions if you are incapacitated or unconscious.

Living Trusts
A Living Trust may be used as an alternative to a Will. Living Trusts are frequently marketed as a way to "avoid probate." However, the cost and complexity of probate varies - in some states, probate avoidance is generally not a money-saver and the use of a Living Trust may result in more expense and hassle. In addition, the use of a Living Trust to avoid probate requires that almost all of your property be titled in the name of the Trust, which may complicate the daily management of your assets.
There are, however, several other reasons to create a Living Trust, including the avoidance of a court-supervised guardianship, ownership of real property outside of your state of residence, more seamless management of assets upon incapacity and privacy (a Will is a public document whereas a Trust is generally not).

Taxes
Under current federal law, you are entitled to give away $1,500,000 at death without any federal estate tax (this amount will increase to $2,000,000 in 2006 and $3,500,000 in 2009). Every individual is also entitled to give away $1,000,000 during life without any federal gift tax; however, such lifetime gifts reduce the $1,500,000 estate tax exemption. In addition, every individual is entitled to give up to $11,000 to any number of individuals each year without any gift or estate tax consequences.

Most states have inheritance taxes that are imposed only if there is a federal estate tax. Thus, a married couple will generally not be concerned about estate taxes unless their combined estates exceed $3,000,000. In order to take full advantage of both $1,500,000 exemptions, it is necessary that your Wills be prepared in proper form. It is possible that a couple could own less than $3,000,000 in assets but owe estate tax because of the way in which the property is held or titled, or because of state marital property laws.

You may leave any amount of property to your spouse without the imposition of estate taxes, whether your estate is $10,000 or $10,000,000. However, when your surviving spouse dies, his or her entire estate, less his or her $1,500,000 exemption, will be subject to tax. This defers estate tax until both spouses die. Again, to take advantage of this tax deferral (known as the unlimited marital deduction), your Wills must be in proper form.

Beneficiary Designations
It is also important to coordinate beneficiary designations on your various accounts with your estate plan. Assets with beneficiary designations, such as life insurance, some bank accounts and retirement plans, do not pass under your Will, but rather according to your designation.

Insurance
An important part of the estate planning process is a review of all types of insurance, including life insurance, disability insurance, personal liability insurance, and health insurance. Life insurance is generally carried for one of two reasons - to provide for a surviving spouse and/or children, or to provide liquidity. It is also important to consider at what time employer- provided insurance will be lost, such as upon retirement, disability, or termination of employment.

Retirement Planning
It is not only important to plan for the disposition of property upon death, but also to plan for your family's needs upon disability or retirement. This involves a review of your estate, income, and retirement plans and benefits. Circumstances under which the benefits will be paid should be reviewed.

Keeping Your Estate Plan Current
Your Wills and other estate planning documents should be periodically evaluated. From time to time Congress and state legislatures make changes that may greatly affect the consequences of death.

Cost
Fees for Wills and estate planning documents vary greatly because of a number of factors (region, legal market, complexity, attorney experience, etc.). Some attorneys bill on a flat fee basis, while others bill hourly. When investigating estate planning, be sure to be comfortable with and to understand the fee arrangement.