I received this question from L.F., of Glen Cove, N.Y., who wrote:

My husband and I are in our thirties. Is Estate Planning for us?

Dear L.F.:

Estate Planning can be as simple as having a properly drafted will. Yet, experts estimate that only a third of all Americans have a will. What the remaining two-thirds don't realize is that they also have a will, "drafted" according to their state's laws of intestacy, which will determine the distribution of their assets.

Under the laws of intestacy, assets may be split between a spouse, children, parents and maybe even siblings. In New York, if you're married with children, your spouse takes $50,000 plus one-half of the residue; your spouse does not get everything. In addition, in your case, the Surrogate of Nassau County, most likely a stranger to your family, will appoint the Administrator who manages the disposition of the estate. If your spouse was also deceased, the judge may also appoint a guardian for any minor children.

A will is not the only way property can be transferred to heirs. Many individuals own their home jointly with their spouse, in joint tenancy with right of survivorship. This arrangement allows the property to pass directly to the survivor when one owner dies. In addition, many assets, such as IRA's, company retirement plans, life insurance policies and annuity contracts, allow for beneficiary designations.

A trust is a legal entity that also can be used to transfer assets to heirs. A trust is established by a grantor who transfers assets into the trust. A trustee owns and manages the assets according to the trust's instructions, for the beneficiary's benefit. Living trusts, established while the grantor is alive, allow assets to avoid the expense of probate and are generally not a matter of public record. A testamentary trust is established at death according to instructions in a trust or will. Trusts are excellent tools to provide for heirs with special needs, to reduce estate taxes or to manage money for those without the expertise to manage it themselves.

For larger estates, estate planning also involves minimizing and offsetting the effects of estate taxes. Currently, federal estate taxes are imposed on estates worth more than $600,000. Rates start at 37%, and can quickly climb to 55%. State inheritance taxes and other administrative expenses can further erode your estate. You may be surprised how substantial your estate is (it includes home, savings and other investments, retirement plan benefits, life insurance and any business interests); and even more surprised by the amount of taxes and expenses your estate might pay.

A complete estate plan includes arranging your trusts, will, property ownership and beneficiary designations, to make sure assets are distributed to the people you select, while reducing taxes and expenses. It can actually be more important for people with small estates to plan properly, to make sure all their assets go to the people they desire.

Estate planning is an ongoing process. Changes in your personal situation, residency, or tax laws require that your estate plan be reviewed. For more information on estate planning, contact an attorney or other professional in your area who specializes in estate planning.