If you have not done any basic estate planning, there is no time like the present. The reasons to plan your estate exist no matter what the state of the economy. If you have already planned your estate, you should revisit your plan every several years, and whenever there is a significant change in your family (birth, death, divorce) or financial circumstances. Just pull out the documents and give them a thorough read, and make sure they still accomplish what you want. If they do not, see an attorney about updating the documents.

WHAT ABOUT THE ECONOMY?

You may feel as though you have nothing left to plan in this economy, but whatever you do own at the time of your death must go somewhere. Maybe you are comfortable with the idea that state law will take care of it – that it will all get to the right people if you do nothing. Wouldn't you rather have some input as to how your property is distributed? Do you want your children to receive inherited property when they turn 18? If you think this is too young, you can make sure the property is held in trust until they reach a specific age. Who should serve as guardian, trustee, and executor? These are some of the basic decisions you make when you design your estate plan.

"I already have a will." Does it still do what you want it to do?

In this economy, assets may have decreased in value, so you should re-familiarize yourself with the provisions in your will with your priorities have not changed. Consider how your will would operate in light of your overall net worth.

A fairly typical estate plan for a married couple with children is for the first spouse who dies to fully fund a "bypass trust" (sometimes known as a "credit shelter trust," a "family trust," or an "A-B trust"). This means that the first spouse leaves all of his sole-name property to the bypass trust up to an amount equal to the available "applicable exclusion amount" (which is the amount an individual may pass free of federal estate tax at his death). Currently, that amount is $3.5 million (less any taxable gifts made during life). The rest of his sole name property may pass to the surviving spouse – either outright or in trust.

This may be a sensible estate planning strategy; however, with asset values fluctuating, your net worth may have changed since you signed your will. If your net worth at or below $3.5 million, you need to consider whether you want all of your sole-name assets passing to a bypass trust (for the benefit of your children and maybe your spouse) rather than some portion of these assets passing to your spouse outright or to a trust for her sole benefit.

Being a beneficiary of a trust is very different than being the outright owner of property. It may be that most of a couple's property is jointly owned, and that the surviving spouse will receive such property outright no matter what the deceased spouse's will directs.

You may wish to alter the terms of a bypass trust to provide for greater distributions to the surviving spouse during her life, or to make the surviving spouse the primary or sole beneficiary of the bypass trust during her life. At her death, any remaining trust property will be distributed to your children and grandchildren according to provisions of the bypass trust.

It is important to review your estate plan periodically. If your net worth changes, or if the "applicable exclusion amount" changes, your current estate plan may no longer accomplish your objectives. During tough economic times, it is more prudent to take charge of your planning than to ignore it.