WHAT WOULD HAPPEN IF YOU DIED TOMORROW?

The answer to that big question is a composite of your responses to a range of smaller questions. Mull over the following questions, and if the answers or implications are not clear, or if they trouble you, make a note of them--a real note, not just a mental one. You will then have a list of issues on which to focus, and the simple act of writing things down is invaluable in clarifying the thought process. Many people who have been uneasy for years thinking about this find it improves their peace of mind just to make themselves spell out exactly what bothers them.

Look over this list. Of course, not all questions will be pertinent to everyone.

Would there be mistrust, uncertainty, and bickering among your survivors in deciding how to handle your property and wrap up your affairs? Is there anybody who, if not prevented, might actually take your property or funds without authority? Do you have a will that reflects your current wishes? If so, is all your property actually subject to probate court and the terms of the will--or is it instead set up to pass another way at death--e.g., through a beneficiary designation form, as with a 401(k) account, or to a co-owner, as with a joint bank account? If you do have property subject to probate (e.g., furniture, a house, or an account in your name alone), but do not have a will, what does your state's law of intestacy say about who takes property after a person's death? What are the needs, abilities, and weaknesses of your survivors, especially your spouse and children, if any? Are your survivors responsible individuals, capable of managing and using an inheritance wisely if they receive it outright? Or will they need protection from their own youth, financial inexperience, or bad habits? What about the influence of others? Would your bequest to a child need protection from his or her spouse? If your current spouse is not the parent of your children, how--and when--would your estate be divided among them? What kinds of property do you own, e.g., real estate, mutual funds, a family business, etc.? Can your property get along without your active management, at least for a while? How much of it could easily and quickly be converted to cash, if necessary, at reasonably good prices? Is the net worth of all your property--or of the combined property of you and your spouse--more than the amount at which the federal estate tax begins to bite, and tax planning is called for ($1.5 million in 2005 and $2 million in 2006)? What are your responsibilities to your survivors? Would you be leaving young children and the surviving parent, for example, with sufficient assets to maintain the family's standard of living? Or, in contrast, do you have grown children with good jobs, and a spouse with his or her own adequate retirement plan account? If your children are under age eighteen, have you found a suitable guardian for them in case their other parent also dies? Do you have a disabled child or family member who must be provided for separately, for life? If you have an IRA or retirement plan account, have you selected the appropriate beneficiary and distribution options?

When people get around to reflecting upon these kinds of questions, problematic scenarios and "what ifs" often come to mind. It is then that the need for an estate plan typically becomes apparent. Perhaps that is why you are reading this.