Many people think that estate planning is simply the writing of a will. They plan their estate because they want to control who will receive their assets after they die, preferably with as little as possible going to legal fees and taxes. As you will see, for most of us, estate planning encompasses much more than the simple writing of a will or what happens after you die. A good estate plan will also protect you in the event of your incapacity. It will let you -- not the courts -- keep control of your assets, as well as control of decisions about your medical care when you can no longer handle your own affairs.

The best time to plan your estate is now -- while you can and before you need it. With estate planning, there is no second chance.

None of us likes to think about our own mortality or the possibility of becoming incapacitated. That is exactly why so many families are caught off guard and unprepared when incapacity or death strikes.

Keep in mind that estate planning is a dynamic process. Just as people and assets and laws change, it may well be necessary to adjust your estate plan on occasion to reflect those changes.

Your estate consists, simply of everything you own -- your home, other real estate, bank accounts, investments, retirement benefits from your employer, IRAs, your insurance policies, collectibles, and personal belongings.

When you start adding it up -- especially when you add in the death benefits from your insurance policies -- you may find, like most people do, that you actually own a lot more than you think.

Now, perhaps, you understand why people should do estate planning.

If you die intestate (without a will), then California's laws of descent and distribution will determine who receives your property by default. Contrary to popular belief, if you die without a will, everything you own does not automatically pass to the state. Typically, the distribution will be to your spouse and children and then to other family members (including half-siblings and potentially, step-children). The state's plan reflects the legislature's guess as to how most people would dispose of their estate and establishes protections for certain beneficiaries, particularly minor children. The rules of "intestate succession" may or may not reflect your actual wishes. Estate planning affords you the opportunity to alter the state's default plan to suit your personal wishes and desires.

It is important to understand that the transfer of your property after your death may be determined by something other than the laws of intestacy, even where you die without a will. Title to certain categories of property may pass outside your probate estate. Generally, upon your death, in the absence of a will, your half of any community property presumptively belongs to your surviving spouse. Additionally, if you own property with another person as joint tenants with right of survivorship, the property will pass directly to the remaining joint tenant upon your death and will not be a part of your probate estate (it will, however, be a part of your taxable estate). Effective planning requires the knowledge of the consequences of each property interest and type of ownership.

Whatever the size of your estate, you should consider the benefits associated with designating a person who, in the event of your incapacity, will have the responsibility for the management of your assets and your care, including the authority to make health care decisions on your behalf.

If your estate is small in value, you may focus simply upon who is to receive your assets after your death and who should be in charge of your estate's management and distribution.

If your estate is larger, you will also want to consider various ways to preserve your assets for your beneficiaries and to reduce or postpone the amount of estate tax which otherwise might be payable at your death.

A will is a traditional written document naming who you want to handle your final affairs (your executor) and who you want to receive your assets after you die (your beneficiaries).

Unfortunately, your will only controls the assets that are titled in your name alone. It will not affect assets which are titled in joint ownership, such as joint tenancy. Additionally, it does not control assets with beneficiary designations, like your IRA, retirement benefits or life insurance policies. With respect to assets that are controlled by your will, these assets will have to go through a court-controlled process called "probate".

Probate is the name given to the court-supervised process developed under California law which handles the administration and subsequent distribution of your assets pursuant to the terms and desires expressed in your will. In short, probate means the process by which your assets are gathered, applied to pay debts, taxes and expenses of administration, and distributed to those designated as beneficiaries in your will. To initiate the probate of a will, an individual, typically the person named as executor in your will, files the original will with the local Superior Court along with a petition asking the court to "admit" the will to probate. After notice is given, and a hearing is held, and if all is in order, your will is admitted to probate and your executor is formally appointed by the court.

While probate is a clear and orderly process, it can, in many situations, be unnecessarily time-consuming and expensive. In larger counties, such as Los Angeles County, the process will customarily consume at least six months, if not longer, and legal and executor fees may well be greater than comparable services rendered in the administration of a revocable trust.

A revocable trust (sometimes referred to as a "living trust") is a written agreement between the person creating the trust and the person named to manage the assets of the trust (typically yourself during your lifetime). The revocable trust will also name the person and/or financial institution who would handle your assets in the event of your disability and their distribution in the event of your death.

A revocable trust may be amended or revoked by you at any time during your life, as long as you are competent. The terms of the trust become irrevocable (not subject to change) after your death. Because a revocable trust contains provisions which direct the distribution of your assets on or after your death, the trust acts as a "will substitute" and eliminates the need for the probate of your will with respect to those assets which were held in the name of your trust at the time of your death.

The use of a revocable trust can, if implemented properly, eliminate the need for the probate of your assets held in the name of your trust, thus avoiding additional legal and probate fees as well as unnecessary delays in the administration and distribution of your estate. Additionally, a revocable trust allows you to control the disposition of your assets long after your death, as well as preventing the court from controlling your assets in the event of your incapacity. Even with a revocable trust, however, a will (often referred to as a "pour-over" will) should be executed in order to be certain that any assets not in your trust at the time of your death will be distributed in accordance with your wishes as expressed in your revocable trust.

As you can see, trusts are not only for the wealthy. Anyone desiring to control when or how their assets are distributed, following their death, should consider a revocable trust. In summary, a revocable trust can avoid probate at death, prevent court control of assets in the event of incapacity, provide privacy (since a revocable trust is not a public document), allow speedy distribution of assets or control the distribution of assets following your death, as well as the potential reduction of estate taxes.

Estate taxes are imposed upon an estate which has a net value in 2000 of $675,000 or more. Under current law, that amount will increase to $1,000,000 in 2002. For estates which approach or exceed these amounts, estate tax savings can be realized by proper estate planning. Such planning, however, must generally be implemented before death. Estate planning for taxation purposes needs to take into account not only estate taxes, but also income, gift, property, and generation-skipping taxes as well.

When considering issues dealing with planning to avoid or potentially eliminate estate taxes, professional guidance from lawyers, accountants and other qualified financial advisors should be considered.

While considering planning for disposition of your property at your death, it is advisable to consider other personal objectives that can be accomplished through related estate planning documents. Other documents that are often considered in the preparation of an estate plan include Advance Health Care Directives (which replace what was formerly included in Durable Powers of Attorney for Health Care and "Living Wills"), Powers of Attorney, Nomination of Guardians for Minors, Irrevocable Insurance Trusts, and other grantor and charitable trusts.

It is possible to prepare ones own estate plan using do-it-yourself software or fill-in-the-blank forms. It is unlikely, however, that these methods will result in a suitable solution that accomplishes all of your objectives. It is generally advisable to consult with a qualified attorney who can interpret the various laws dealing with property rights, taxes, wills, trusts, and probate.

If you do decide to consult with an estate planning attorney, you can save time and money by preparing thoroughly for your meeting. You can organize information regarding your assets, liabilities, disposition, desires and other objectives as well as gather important documents such as prior wills or trusts, powers of attorney, life insurance policies, employment benefits, and other related documents and information.