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Photo: Robert Trachtenberg

Have you ever wanted to make life harder than it needs to be for your family and dear friends? Wished upon them a legal labyrinth to navigate or a steep tax bill to pay? Do you dream about the day your kids will have to anxiously wait for finances to get sorted out?

I imagine you think these are absolutely absurd questions. But now consider this: Do you have your estate planning in place? If not, you might want to think again.

The fact is, most Americans don't have a will, let alone a revocable living trust. Yet ask anyone who has dealt with the estate of a deceased family member who didn't have solid plans in place, and they'll tell you how frustrating, time consuming, and expensive it is to get everything sorted out.

If you die with no will or trust in place (a.k.a. intestate), the courts will follow state law to disburse your assets—no matter what you may have once promised your sister or told your spouse. If you die with only a will in place, the courts will have to give the document a stamp of approval before divvying up your estate. This is known as probate, and the cost of this necessary judicial step can eat up more than 5 percent of your estate's value and ensnare your heirs for a year or longer in a legal tangle.

You can avoid bequeathing that heartache and headache to your loved ones by setting up the essential documents so that when you die, your assets go exactly where you want, as quickly as you want, with the least amount of expense. I realize that the very mention of estate planning can be daunting and unsettling. But let's reframe this: Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn't as hard as you might think.


1. Create a revocable living trust.

This isn't a tool reserved for the very wealthy: A revocable living trust allows your heirs to avoid probate entirely and keeps you in complete control of your finances while you're alive. You can always make changes to what's in the trust and to how you'd ultimately like it managed or disbursed. When you die, the person you designate as your successor trustee simply takes over and follows your wishes.

Hiring an estate attorney to review your finances and set up a revocable living trust can cost $1,500 or more, though it can certainly be money well spent. Another, far less costly, option is to fill out the forms on your own. (A Will & Trust Kit is available on suzeorman.com, with state-specific trust forms and other estate documents; use code OWN.) For added peace of mind, you can then hire a lawyer for an hour or so to review the documents and make sure they address all your needs.