By Jeffrey R. Wolfe, Vice President, Estate Planning Associate

October 20-26, 2014 is National Estate Planning Awareness Week. In 2008, prompted by the estimate that over 120 million Americans were without up-to-date estate plans to protect themselves or their families in the events of sickness, accidents or untimely death, Congress passed a resolution so recognizing the third week of October every year.

Contrary to what you may think, estate planning is not a process reserved only for those nearing retirement or for the wealthy. It’s an important component of your overall financial plan that determines who will inherit your assets and who will control the process.

If you don’t have an effective estate plan in place your assets may pass per your state’s default rules. This could be costly to your beneficiaries and may cause friction if the assets pass to unintended individuals. If you’re procrastinating on setting up your estate, here’s some information to get you going in the right direction.

Estate Planning is for Everyone  No matter your net worth, you have an estate. Your estate is comprised of everything you own — your car, home, checking account, personal possessions, etc. Caring for loved ones is also an important estate consideration. If you have minor children, for example, a will is the only way you can name a guardian for them.  Having an estate plan will ensure that your loved ones know your wishes, and that they’re cared for in the event of your death. Estate planning is one of the most thoughtful and considerate things you can do for yourself and for those you love.

Understand the Essential Estate Planning Documents  There are certain basic estate planning documents that enable you to more easily transition assets upon your death and help manage your finances and health care decisions in the event that you are unable to do so. The five basic planning documents — a will, durable power of attorney, health care power of attorney, living will, and revocable living trust — can help formalize your wishes while you are alive, as well as after your death.

Start to Inventory Your Assets  Classify your assets into categories and assign a value for each category. These categories can include life insurance, investments, residence and savings. Having an inventory will make it easier for you to organize and distribute your assets. Begin to think about the individuals you would like to have inherit your assets and to make medical decisions if you cannot for yourself.

Discuss Your Wishes with Your Loved Ones  While you do not have to discuss your estate plan with anyone, it is often wiser and easier on the emotions of your family later on if you discuss it with your family. Having this conversation about your wishes can also clear up confusion and reduce tension after your death.

Trusts Aren’t Just for the Rich  Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They may also help you to reduce your estate and gift tax liability and distribute your assets to your beneficiaries without the cost, delay and publicity of probate court.

The Best Time to Plan Your Estate is Now None of us really likes to think about our own mortality or the possibility of being unable to make decisions for ourselves. This is exactly why so many families are caught off-guard and unprepared when incapacity or death does strike. You can put something in place now and still have the ability to change it later — which is exactly the way estate planning should be done.

Remember to Review  The only thing certain in life is change. Remember that once you have your documents in place, you may still need to update them due to changes in your personal circumstances or the law. You should also periodically review these issues with your financial advisor, your CPA and your attorney to better ensure your strategy remains aligned with your goals, keeping you in control of your legacy planning.