When Pablo Picasso died in 1973 he left an estate worth $300 million, but no will specifying how it was to be distributed. The ensuing family dispute lasted four years and consumed 10% of the fortune - and it all could have been avoided with some simple estate planning.

Although you may not want to think about what will happen after you are gone, an estate plan is a way to help make sure that your assets are distributed to your intended heirs - family members, friends, or even charitable institutions - according to your instructions.

A well-crafted plan will not only help eliminate confusion for your heirs, it can also help protect them - and you - from estate tax burdens, so that your assets are transferred at the lowest possible cost.

A sound estate plan may include several of the following elements:

A well-crafted plan will not only help eliminate confusion for your heirs, it can also help protect them - and you - from estate tax burdens, so that your assets are transferred at the lowest possible cost.

A sound estate plan may include several of the following elements:

• A professionally drafted will outlines how your property will be distributed after your death. It can also address issues such as the future care of minor children and can help limit probate costs. A living will spells out your wishes for your own health care.
• A trust can provide security for you and your beneficiaries, and it may help protect assets from taxes. With a living trust, for example, you maintain control of your assets while benefiting from a tax shelter during your lifetime. Upon death, the remaining assets can be managed by the trustee and distributed to your beneficiaries according to terms you set.
• Insurance can help your heirs meet survivor and estate-settlement expenses. The appropriate type and level of insurance will vary according to your personal circumstances.
• Qualified executors and trustees can help ensure that your wishes are carried out. You may choose an individual, such as an attorney or accountant, or an entity that has expertise in taxation, estate law, or money management.

An estate plan may help to preserve the wealth you've worked so hard to build. Don't put off completing an essential step in the financial planning process that can benefit you as well as your heirs. Speak to a qualified legal professional about the role he or she can play in creating a flexible plan to address your unique needs.

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